Sensex Gains 277 Points, Nifty Above 25,700 as Infosys Earnings Boost IT Sector

Indian equity markets opened on a positive note on Friday, with both benchmark indices gaining momentum driven by strong performance in the information technology sector. The rally came after Infosys delivered better-than-expected quarterly results and raised its full-year revenue growth guidance, boosting investor sentiment across IT stocks. Market Performance Overview The market performance on Friday reflected broad-based optimism, particularly in the technology sector: Index Opening Level Gain (Points) Gain (%) BSE Sensex 83,660 277 0.33% NSE Nifty 50 25,731 66 0.26% Broader market indices also participated in the upward movement, with mid-cap shares advancing 0.2% and small-cap stocks adding 0.1%, indicating widespread investor interest across market segments. Top Gainers and Sector Performance The 30-share Sensex witnessed strong gains across multiple sectors, with technology stocks leading the charge: Stock Performance Range Infosys Up to 5% Tech Mahindra 1% - 5% Mahindra & Mahindra 1% - 5% Kotak Mahindra Bank 1% - 5% Power Grid 1% - 5% The IT index surged approximately 2%, with Infosys emerging as the standout performer after the company surprised investors by raising its fiscal 2026 revenue outlook. Market experts highlighted that the software exporter is well-positioned to gain market share, citing stronger artificial intelligence partnerships and deeper client engagement. Institutional Investment Activity Institutional trading patterns on January 14 showed contrasting trends between foreign and domestic investors: Investor Category Activity Amount (₹ Crore) Foreign Institutional Investors Net Selling 4,781 Domestic Institutional Investors Net Buying 5,217 Global Market Context Asian markets provided a supportive backdrop for Indian equities, with MSCI's broadest index of Asia-Pacific shares outside Japan rising 0.5%. The positive sentiment was driven by renewed enthusiasm around artificial intelligence following strong earnings from Taiwan Semiconductor Manufacturing Co. Overnight, U.S. markets closed higher, led by gains in technology and financial sectors. Nasdaq futures added 0.22% in Asian trading, while S&P 500 futures edged up 0.15%. Currency and Commodity Updates The Indian rupee weakened at the open on Friday, slipping 0.1% to 90.3725 per dollar, following hawkish remarks from Federal Reserve officials that lifted the U.S. currency. However, traders indicated that losses may be limited by signs of a narrowing trade deficit and expectations of central bank support. In commodity markets, oil prices remained relatively stable with Brent crude slipping 3 cents to $63.73 per barrel, while WTI edged up 4 cents to $59.22 per barrel. Gold prices declined 0.16% to $4,607.50 per ounce. Infosys shares are expected to witness strong buying interest following the company's mixed third quarter results and upward revision to full-year guidance. The IT services giant's American Depositary Receipts have shown remarkable momentum, gaining 7.4% over two sessions despite reporting a decline in net profit. Financial Performance Overview The company's Q3 results presented a mixed picture, with revenue growth offset by margin pressures and declining profitability: Metric Q3 Results Previous Period Change Market Expectations Net Profit ₹6,654.00 cr ₹6,806.00 cr (YoY) -2.0% Below estimates Revenue (YoY) ₹45,479.00 cr - +9.0% Above estimates Constant Currency Growth 0.6% QoQ - - vs flat expected Adjusted EBIT Margin 20.80% - -20 bps QoQ Below estimates Operating Margin Guidance 20-22% - Maintained - ADR Performance and Market Reaction Following the Q3 announcement, Infosys ADRs demonstrated strong volatility and overall positive momentum: Parameter Details Initial Surge 11.5% to $19.45 intraday high Settlement Price $19.35 (up 10.4%) Thursday Close $18.82 (down 2.7%) Two-Day Performance +7.4% overall gain Guidance Revision and Growth Outlook Infosys surprised the market by raising its FY26 constant currency revenue growth guidance to 3-3.5% from the earlier range of 2-3%. This upward revision of 75 basis points at the mid-point reflects management's confidence in demand recovery. The guidance raise was supported by strong deal wins of $4.85 billion in Q3, with 57% classified as net new deals, indicating expanding client relationships. Comprehensive Brokerage Analysis Nomura: Buy Rating with ₹1,810 Target Nomura reiterated its Buy rating, highlighting the upward revision of FY26 revenue growth guidance. The brokerage noted that management indicated the lower end assumes sustained macro uncertainty, while the upper end factors in gradual demand improvement. Nomura estimates implied Q4 FY26 growth between -1.6% and +0.3%. Elara Capital: Accumulate Rating with ₹1,770 Target Elara Capital retained its Accumulate rating and raised its target price to ₹1,770. The brokerage noted Q3 revenue exceeded expectations, aided by the NHS deal, while margins came in ahead of estimates. To achieve revised guidance, Q4 growth needs to be between -1.7% and +0.2%, which Elara believes is comfortably achievable. Emkay Global: Buy Rating with ₹1,750 Target Emkay Global maintained its Buy rating with a ₹1,750 target price, describing Q3 performance as mixed. The brokerage noted revenue exceeded expectations due to 0.6% sequential growth in constant-currency terms, while adjusted EBIT margin declined 20 basis points quarter-on-quarter to 20.8%. Sector Dynamics and AI Strategy The results reflect improving sentiment in the IT services sector, with management expressing particular confidence in BFSI and Energy, Utilities, Resources and Services (EURS) verticals for FY27. Infosys outlined six key AI value pools, including AI engineering services, data for AI, agents for operations, and AI-led software development, positioning itself for future growth opportunities driven by artificial intelligence adoption. 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