Tata Communications shares rally 15%. What’s driving the frenzy? – News Air Insight

Shares of Tata Communications surged as much as 14.8% to Rs 1,948 on Friday, emerging among the top gainers on the NSE, as investors piled in on heavy volumes amid growing optimism around the stock. The rally marks a nearly 21% gain over the past six sessions.

The trading momentum was evident, with 35.86 lakh shares changing hands and generating a turnover of Rs 657.42 crore. On the BSE, nearly 3 lakh shares were traded by noon, the highest in almost two months and well above the 20-day average of 65,000 shares. Tata Communications’ market capitalisation stood at Rs 53,722.50 crore, reflecting growing investor confidence in the large-cap telecom and cloud solutions provider.

Technicals indicate bullish momentum

From a technical perspective, Tata Communications is trading above all eight of its key simple moving averages (5-day, 10-day, 20-day, 30-day, 50-day, 100-day, 150-day, and 200-day SMAs), signalling strong bullish undertones across short-term to long-term charts.The Relative Strength Index (RSI) is at 62.9, suggesting the stock is neither overbought nor oversold, while the Moving Average Convergence Divergence (MACD) at 10.1 remains above the center and signal lines, reinforcing the ongoing uptrend.

Synergy buzz fuels optimism

The surge follows TCS’ announcement of plans to develop 1 GW of AI-driven data center capacity over the next five to seven years. Market experts say Tata Communications, with its robust data connectivity and cloud infrastructure network, could be a major beneficiary.The stock could also see a boost in its DC-to-DC (data center-to-data center) connectivity business, aligning with Tata Communications’ existing global data solutions portfolio. TCS management, during its Q2 earnings call, hinted at synergies with other Tata Group companies, reinforcing expectations that Tata Communications may play a pivotal role in the emerging AI and data center ecosystem.Meanwhile, TCS shares fell nearly 2% on Friday after reporting a weaker-than-expected September-quarter profit. Despite the miss, several brokerages maintained bullish views, highlighting long-term strategic positioning and new growth levers that could lift the stock by as much as 21% from its last close.

Also read | Explained: Reliance Industries is India’s most valuable company but why isn’t it No.1 in Nifty50 weight?

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)