Sensex gives up 200 pts from day's high as TCS-led rally loses steam; Nifty holds above 24,150

Indian benchmark indices traded firmly higher on Friday but surrendered a part of their early gains as investors turned cautious after a strong opening rally led by Tata Consultancy Services (TCS), with elevated crude oil prices and lingering geopolitical tensions keeping sentiment in check.

The Sensex, which surged to an intraday high of 77,588.08, pared nearly 200 points from its peak to trade at 77,385.57, up 643.75 points, or 0.84%, at around 11:55 am. The Nifty 50 also slipped from its day's high of 24,226.05 but remained firmly in the green at 24,157.75, higher by 194.95 points, or 0.81%.

The benchmark indices extended gains for a second straight session after Thursday's modest rebound, although Friday's rally lost momentum as investors booked profits at higher levels despite encouraging earnings and broad-based buying.

TCS earnings lift IT stocks

Information technology stocks emerged as the biggest support for the market after TCS surged nearly 4% following its June-quarter earnings, boosting sentiment across the sector. The company reported a robust $9.5-billion order book and said its annualised AI revenue had reached $2.6 billion, reinforcing hopes that enterprise technology spending remains resilient despite an uncertain global environment.

Reflecting the optimism, the Nifty IT index climbed 1.66%, making it the top-performing sector during the session. Infosys, Wipro and Tech Mahindra also traded with healthy gains.

Buying extended beyond technology stocks, with the Nifty Metal index rising 1.67%, followed by Consumer Durables (1.32%), Financial Services Ex-Bank (1.25%), Housing (1.23%), Private Bank (1.18%), Bank (1.11%) and PSU Bank (1.07%).

Defensive sectors, however, underperformed. Nifty FMCG slipped 0.14%, while Healthcare and Pharma were largely flat, suggesting investors were rotating back into cyclical sectors.

Among the Nifty gainers, Jio Financial Services, HDFC Life, Adani Enterprises, Adani Ports, InterGlobe Aviation (IndiGo), Reliance Industries, Infosys, BEL, JSW Steel and Wipro led the advances. On the flip side, Eternal, Dr. Reddy's Laboratories, Bharti Airtel, Nestle India and ITC were among the notable laggards.

Oil, geopolitical risks cap gains

Despite the positive undertone, investors remained cautious as Brent crude continued to hover around $76 a barrel, with markets closely monitoring the evolving conflict in the Middle East. While oil prices have eased from this week's highs, persistent geopolitical uncertainty has prevented a stronger risk-on rally, as higher crude prices could stoke inflation and weigh on oil-importing economies such as India.

Meanwhile, the India VIX, often referred to as the market's fear gauge, fell 7.25% to 12.39, extending its decline after Wednesday's sharp spike. The drop in volatility indicates improving investor confidence, although traders remain watchful ahead of more June-quarter earnings and further developments on the geopolitical front.