Nifty 50 hits new high close as IT sector offsets rising oil prices
Indian benchmarks swung to weekly gains and closed at new highs as strong IT earnings and financial sector rotation overshadowed a 12.5% surge in Brent crude driven by US-Iran tensions.
Indian equities closed higher on Friday, with the Nifty 50 advancing 1.09% to 24,334.30 and the Sensex climbing 1.25% to 78,151.45. The gains pushed both benchmarks into positive territory for the week, up 0.5% and 0.8% respectively. Notably, this occurred while trading within the narrowest 368-point band of 2026, bounded between 24,000 and 24,368.
The rally was anchored by the IT and financial sectors, which provided a counterweight to broader macroeconomic risks. The IT index added 1.8%, fueled by a 4.1% surge in Tech Mahindra following strong revenue growth. Tata Consultancy Services soared nearly 10% for the week, marking its best performance in six years, as softer U.S. inflation eased interest rate concerns and attracted buyers to a sector that had fallen sharply year-to-date.
Financials gained 1.3%, led by a 3.1% jump in Jio Financial after a profit beat. Reliance Industries rose 2.4% ahead of its June-quarter results, supported by the promoter group increasing its stake to 50.48%. This steady sector rotation into IT, banks, and pharma offset weakness in small- and mid-cap stocks, which broke a recent winning streak as some lenders failed to meet earnings expectations.
These domestic moves defied significant external pressures. Brent crude climbed 12.5% this week to $86 a barrel amid escalating U.S.-Iran tensions. This spike threatens to complicate India's inflation outlook alongside monsoon-related price pressures, making the market's resilience notable for institutional investors.
Technically, the market is drawing strength from forced short-covering by traders who anticipated a downturn following early July geopolitical jitters. After holding the 23,800 support level, the Nifty's recovery above 24,300 has reinforced a bullish outlook, with analysts pointing to a possible move toward 25,000.
Positioning for the Breakout
Active traders are leveraging specific corporate and policy trends to play this momentum. Raja Venkatraman of NeoTrader recommends Exide Industries, with a two-month target of ₹480, citing positive momentum from customs duty exemptions on lithium-ion cell manufacturing components. He also points to Aptus Value Housing Finance, targeting ₹340 on a technical breakout, and Titan Company, targeting ₹5050 as revived buying interest offsets recent profit-taking in the consumer discretionary space.
