FINAL TRADE: IT stocks lift Sensex 234 points higher, Nifty settles at 18,314

Buying in Top 5 IT services counters, Tech Mahindra, Wipro, TCS, HCL Tech, and Infosys helped benchmark indices settle in the green on May 22. At close, the S&P BSE Sensex stood at 61,963.68, up 234 points, or 0.38 per cent while the NSE's Nifty ended at 18,314.40, up 111 points, or 0.61 per cent.

"The domestic market inched higher in anticipation of possible progress in US debt ceiling negotiations. Despite a weak fourth-quarter performance, IT stocks rebounded on account of bargain opportunities and pent-up demand. Investors remain watchful ahead of the release of US FOMC minutes on Wednesday, as the minutes may give some indication of a pause on rate hikes," said Vinod Nair, Head of Research at Geojit Financial Services.

In the broader market, the S&P BSE MidCap index gained 0.73 per cent to 26,342.32 levels while the S&P BSE SmallCap index ended at 29,868.97, up 0.41 per cent. India VIX, the volatility index, rose over 2 per cent to 12.57 levels. Among sectoral indices, the Nifty PSU Bank index gained 0.5 per cent to 3,991.55 points while the Nifty Private Bank index lost 0.26 per cent to 22,257.25. Realty, healthcare, consumer durables and oil & gas stocks, too, traded with decent gains.

TECH VIEW

After a reversal on the previous Friday, the market continued its positive momentum and formed a bullish candle on the daily charts, which is largely seen as a positive signal. It is believed that the index has completed one leg of a pullback rally and is currently trading near an important retracement resistance zone. Overall, the market has shown positive signs with a strong bounce back, supported by the performance of specific sectors. However, caution is advised around the important retracement resistance zone, and traders should monitor the levels mentioned for potential market movements. Nifty has strong support at the 18,200 range while having resistance on the higher side at the 18,375 to 18,400 range, says Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd.