A strong first quarter from Tata Consultancy Services (TCS) and growing optimism about a US Fed rate cut in September lifted the benchmark indices to record highs at close.

The 30-share Sensex rallied 622 points or 0.78 per cent to end at 80519.34. During the day, it jumped over 996 points or 1.24 per cent to touch an all-time high of 80893.51.

On the NSE, the Nifty zoomed 186.20 points or 0.77 per cent to settle at 24502.15 after rising 276.25 points to hit a peak of 24592.20.

On a weekly basis, the BSE benchmark jumped 522.74 points or 0.65 per cent, while the Nifty climbed 178.3 points or 0.73 per cent.

IT shares were the star performers as expectations of a recovery in the sector rose after TCS beat Street estimates.

Though the IT services giant refrained from committing on the revival of demand momentum, its top management reiterated growth in this fiscal will be better than 2023-24.

“The management remained cautious about calling out a demand recovery, but was confident of a revenue-growth pickup in 2024-25, driven by a recovery in BFSI and North America,” Kumar Rakesh, an analyst at BNP Paribas India, said in a note.

“With recovery visible in key verticals and geographies, and confidence in driving margin through productivity gains, we see TCS delivering strong earnings growth and benefiting from an overall demand recovery,” he said.

A cooling of US inflation
in June provided an additional catalyst to TCS and its other peers as it lifted hopes of
the Fed starting to reduce interest rates beginning September.

Shares of TCS vaulted 6.68 per cent or ₹262.20 to end at ₹4,184.90 on the BSE after rising more than 7 per cent during intra-day trades to touch a high of ₹4,199.

Infosys, HCL Technologies, Tech Mahindra, Axis Bank, Reliance Industries, JSW Steel, Bajaj Finance and Larsen & Toubro were the other major gainers rising up to 3.57 per cent.

``TCS has provided a much needed boost to the IT sector, where the sentiment has
been sluggish and valuations appear reasonable. PSUs are currently leading the market, particularly those in the railways, defence, shipbuilding, power financing and industrial sectors,’’ Krishna Appala, analyst at Capitalmind Research, said.

Appala said the budget is expected to deliver more incentives to the PSUs.

In the broader market,
the BSE midcap gauge declined 0.22 per cent, while the smallcap index dipped 0.13 per cent.

Among the indices, IT surged 4.32 per cent, teck zoomed 3.29 per cent, energy (0.13 per cent), bankex (0.10 per cent) and services (0.06 per cent).