Buy or Sell: Dharmesh Shah of ICICI Securities recommends buying TCS and V-Guard today

Stock Market News: After a four-week storm surge, domestic benchmark equity indices, the Sensex and the Nifty 50, had their worst week in more than four months on Friday's session. With the sole exception of the information technology (IT) sector, all sectoral indices witnessed losses by the end of the week, according to analysts. 

The 30-share BSE Sensex ended lower by 453.85 points or 0.62% at 72,643.43 level while the Nifty 50 closed at 22,023.35 level, down 123.30 points or 0.56%.

Also Read: Stock market today: Sensex falls over half a per cent, Nifty 50 ends near 22k; smallcaps outperform

Investors will be keen to participate in the stock market ahead of general elections, according to market experts, as India gets ready for its elections in 2024. Elections for the Lok Sabha will take place in seven phases in 2024, beginning on April 19 and results would be out on June 4.

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Also Read: Lok Sabha Election 2024 schedule out : 10 key highlights of seven-phase voting

Monetary policy will be a major topic this coming week as the US Federal Reserve (Fed) will start its two-day policy meeting on March 19 and the interest rate decision will be out on March 20. Analysts predict that the US Fed will maintain its benchmark overnight interest rate unchanged, based on reports.

The Bank of Japan (BoJ) will declare its interest rate decision on March 19, while China will release the loan prime rate for loans with terms of one year and five years on March 20. On March 22, Japan is scheduled to release its inflation rate.

According to Pravesh Gour, Senior Technical Analyst at Swastika Investmart Ltd., other macroeconomic factors will be crucial in determining the tone of the market in the near future. The movement of the rupee versus the dollar, US bond yields, and crude oil prices will all continue to be of major interest.

Market Outlook by Dharmesh Shah, Vice President, ICICI Securities

The index witnessed profit taking ahead of the closure of the financial year, leading Nifty 50 to close 2% lower. Price action for the week formed a sizeable bear candle that engulfed the past two weeks’ gains, indicating a pause in upward momentum. Nifty mid- and small-cap indices witnessed capitulation during the middle of the week, leading prices to extreme oversold readings after 9% and 16% declines, respectively, said Dharmesh Shah, Vice President, ICICI Securities.

In the upcoming week, we expect Nifty 50 to extend consolidation in the 21,700–22,400 zone with a positive bias amid stock-specific action as prices undergo a healthy retracement of the recent rally. Such consolidation over the next few weeks would set the stage for the next leg of up move, supported by Nifty 50 heavyweights, as we expect Nifty 50 to head towards a target of 22,700 in April 2024. Use dips as a buying opportunity. Meanwhile, we expect Nifty midcap and small cap indices to undergo base formation over few weeks, explained Shah.

The Bank Nifty snapped a four-week winning streak amid profit taking on all five sessions. We expect Bank Nifty to consolidate in the broad range of 46,200 and 47,200 in the coming week, highlighted Dharmesh.

Also Read: FPIs continue buying streak in March, pump ₹40,710 crore in Indian equities; Will the inflows continue?

Stock Recommendations by Dharmesh Shah

On stocks to buy on Monday, Dharmesh Shah recommended two stocks:

Buy Tata Consultancy Services Ltd (TCS) in the range of ₹4,170-4,230 for the target of ₹4,530 with a stop loss of ₹3,990.

Buy V-Guard Industries Ltd in the range of ₹310–320 for the target of ₹375 with a stop loss of ₹302.

Also Read: Dividend Stocks: Oil India, PFC, TVS Motor Company, among others to trade ex-dividend next week; check full list

Disclaimer: The Research Analyst or his relatives or I-Sec do not have actual/beneficial ownership of 1% or more securities of the subject company, at the end of 15/03/2024 (preceding date) or have no other financial interest and do not have any material conflict of interest.

The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.