Mumbai (Maharashtra) [India], October 9 (ANI): Indian stock markets opened higher on Friday, with IT stocks witnessing strong buying despite the US government's decision to suspend some of the world's largest IT outsourcing firms from the Permanent Labor Certification Program.
The Nifty 50 opened at 22,303.35, gaining 70.55 points or 0.32 per cent, while the BSE Sensex was trading at 71,747.82, up 154.5 points or 0.22 per cent.
The Nifty IT index jumped 2.73 per cent, while most other sectoral indices on the NSE also traded in positive territory after losses on Thursday.
Among sectoral indices, Nifty FMCG rose 0.96 per cent, Nifty Private Bank gained 0.56 per cent, Nifty PSU Bank advanced 0.47 per cent, Nifty Metal increased 0.26 per cent, Nifty Pharma rose 0.22 per cent and Nifty Auto gained 0.12 per cent.
The gains in IT stocks came despite a major regulatory development in the United States involving several large technology and outsourcing companies.
US Labour Secretary Keith Sonderling announced on Thursday that the government was suspending some of the world's largest IT outsourcing firms from the Permanent Labor Certification Program. The companies named included Cognizant, Infosys, Tata, Wipro, HCL and Capgemini. US technology companies Microsoft and Adobe were also suspended from the programme.
The US Labour Department attributed the suspensions to multiple active federal investigations.
Sumit Singhania, Head of Research at Bajaj Broking, said the development had added another layer of uncertainty for Indian IT companies, which were already facing pressure.
He said the immediate impact could come through higher hiring and compliance costs, particularly if affected companies had to depend more on local talent and subcontracting.
Singhania added that the development could put further pressure on operating margins in the near term and lead to volatility in IT stocks as investors assess the extent and duration of the regulatory impact.
Meanwhile, elevated crude oil prices and high US bond yields continued to weigh on the broader market outlook.
Brent crude oil prices declined 1.13 per cent to USD 103.10 per barrel at the time of filing this report.
V K Vijayakumar, Chief Investment Strategist at Geojit Investments, said these two factors had pushed the near-term market structure towards a "sell on rally" approach.
He said sustained foreign institutional investor (FII) selling had also weakened the market, with investors selling even fundamentally strong blue-chip stocks.
According to Vijayakumar, FIIs are likely to continue selling in the near term as long as crude prices remain elevated and US bond yields stay high, despite favourable valuations, particularly among large-cap stocks. FIIs have sold equity worth Rs 36,210 crore through exchanges in October so far, he said.
In other Asian markets, Japan's Nikkei was trading 0.58 per cent lower at 68,640. Singapore's Straits Times gained 0.16 per cent to 5,385, while Hong Kong's Hang Seng rose 0.96 per cent to 24,015. Taiwan and South Korea's markets were closed for a holiday. (ANI)
Nifty, Sensex open higher, IT stocks jump 2.73% despite US action against outsourcing firms
