Stock market recap: India's benchmark equity indices ended little changed on Tuesday as gains in information technology (IT) stocks, aided by a stronger dollar, were offset by weakness in banking shares, while investors awaited greater clarity on the prospects of a US-Iran deal.
The Nifty 50 fell 0.14% to close at 23,618, while the BSE Sensex slipped 0.15% to 75,200.85.
Nine of the 16 major sectors advanced. Broader markets outperformed, with the small-cap index rising 1.2% and the mid-cap index gaining 0.9%.
Here are three stocks to buy or sell as recommended by Raja Venkatraman of NeoTrader for 20 May:
Best stocks to buy today (All Buy trades are rates of Equity & Sell rates are based on F&O)
GSFC: Buy above ₹179, stop ₹168 target ₹198(Multiday)
VBL: Buy above ₹518, stop ₹490 target ₹570 (Multiday)
POWERGRID: Buy above ₹301, stop ₹285 target ₹337 (Multiday)
Stock Market Recap
Indian equities extended their decline on 19 May, as continued selling in metal, oil-linked, PSU bank and realty stocks weighed on sentiment, while persistent rupee weakness added to market pressure.
The Sensex fell 160.73 points, or 0.21%, to close at 75,237.99, while the Nifty declined 46.10 points, or 0.19%, to settle at 23,643.50.
Market breadth remained weak, with 2,381 shares dclining against 1,631 advances, signalling broad-based pressure across sectors.
The Nifty Metal index dropped nearly 2%, while PSU Bank, Realty and Oil & Gas indices also ended sharply lower. Mid- and small-cap indices underperformed the benchmarks, underscoring weakness in the broader market. India VIX rose nearly 1%, pointing to heightened volatility ahead.
A few pockets of the market offered some support. IT, Media and FMCG stocks ended in the green, though gains were insufficient to offset the broader risk-off sentiment driven by currency concerns and sectoral weakness.
Outlook for Trading
Market trends continue to show a positive undertone, although the inability to sustain momentum ahead of weekly expiry made trading conditions choppy and directionless. While broader bullish trends remain intact, a lack of clarity continues to keep investors cautious. Over the past few sessions, hesitation has become more visible, with the 24,000 mark on the Nifty emerging as a key resistance level that is triggering intermittent selling pressure.
That said, the week did witness a degree of bullish resilience, with broader indices showing signs of stability and participation. Although a recovery appears to be underway, markets are not entirely out of the woods yet, and the current upmove could still prove to be an intermittent rally rather than the start of a sustained trend.
Sentiment in the coming week is likely to be shaped by a mix of domestic and global triggers. Recent market moves have largely been driven by short covering rather than strong institutional buying, especially amid limited clarity on global cues and intermittent market closures overseas. Volatility is therefore expected to remain elevated and may take time to ease.
Corporate earnings are also clouding the outlook for what was initially expected to be a strong quarter. Technically, the daily charts indicate that the earlier range-bound pattern has started to break, but stronger momentum will be needed for the market to move decisively higher. The bullishness seen on Wednesday appeared to be driven more by news-led short covering than by broad-based buying interest.
On the derivatives front, option positioning remains constructive. Open interest concentration is gradually building a stronger base at lower levels while shifting higher towards the 24,200 zone, suggesting that traders are positioning for a gradual upward move.
Even so, volatile conditions continue to create turbulence, although the earlier bearish outlook has begun to recede. With geopolitical tensions increasingly being treated by markets as a non-event, bearish sentiment appears to be gradually fading, potentially forcing short sellers to unwind positions over the coming sessions.
Three stocks to trade, recommended by NeoTrader’s Raja Venkatraman:
GSFC (current market price ₹176.44)
- Why it’s recommended: Gujarat State Fertilizers & Chemicals Ltd (GSFC) is a leading Indian publicly-traded manufacturer of fertilizers and industrial chemicals. A V-shaped recovery seen over the last few days have invited some steady buying interest that has led to some steady consolidation and a strong long body candle seen on Tuesday augurs well for the prices. The Relative Strength Index too is showing a new uptick indicating a potential to move higher. With the midcap index doing well we could look to go long.
- Key metrics:
- P/E: 10.41
- 52-week high: ₹220.59,
- Volume: 1.46M
- Technical analysis: Support at ₹166, resistance at ₹210.
- Risk factors: Subsidy policy dependence, working capital & liquidity stress and global price fluctuations.
- Buy : above ₹179.
- Stop loss: ₹168.
- Target price: ₹198 (2 Months)
VBL (current market price ₹514.80)
- Why it’s recommended: Varun Beverages Ltd (VBL) is one of the largest franchise bottlers of PepsiCo in the world outside the US. VBL produces, bottles, and distributes a wide range of carbonated soft drinks, non-carbonated beverages, and packaged drinking water. With the IPL season in full flow we can see that the positive impact is showing in the move. This also prompted the company to offer dividend. As the Relative Strength Index is crossing above 60, we can see that the opportunity to go long has now arisen.
- Key metrics:
- P/E: 62.50,
- 52-week high: ₹534.65,
- Volume: 5.13M.
- Technical analysis: Support at ₹900, resistance at ₹1250.
- Risk factors: Commodity inflation, regulatory challenges, and extreme weather disruptions.
- Buy : above ₹518
- Stop loss: ₹490
- Target price: ₹570 (2 Months)
POWERGRID (current market price ₹298.60)
- Why it’s recommended:Power Grid Corp. of India Ltd (POWERGRID) is an Indian central public sector undertaking under the Ministry of Power, headquartered in Gurugram. The last few days the selling pressure persisted to push the prices lower to test the cloud support region. With a set of disappointing numbers, the price action is indicating that the negative newsflow is priced in. As the sector is in prominence the lower levels could be a could point to enter as the support and some hint from the Relative Strength Index suggests that we could be looking at some upside.
- Key metrics:
- P/E Ratio: 14.82
- 52-week high: ₹301.75
- Volume: 12.58M
- Technical analysis: Support at ₹290, resistance at ₹375.
- Risk factors: Closely monitored by rating agencies for vulnerabilities such as asset quality deterioration, narrowing margins, and macroeconomic downturns.
- Buy : above ₹301.
- Stop loss: ₹285.
- Target price: ₹337.
Raja Venkatraman is co-founder, NeoTrader. His Sebi-registered research analyst registration no. is INH000016223.
Investments in securities are subject to market risks. Read all the related documents carefully before investing. Registration granted by Sebi and certification from NISM in no way guarantees performance of the intermediary or provide any assurance of returns to investors.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.