Stocks to buy or sell: Dharmesh Shah of ICICI Securities suggests buying Tata Power today - 17 March 2025

Stock Market news: The Indian stock market began the week on a robust note on Monday, with both main indices reporting gains. The Sensex soared by 290.59 points, starting the day at 74,138.49, while the Nifty 50 rose by 82.35 points to kick off the session at 22,479.55. 

Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, indicated that the short-term market trend is expected to be stable with a positive inclination. Contributing factors include a gradual decrease in FII outflows and India's superior performance compared to the US last week. 

This favourable trend is supported by a rebound in FY25 Q3 GDP growth to 6.2%, an increase in January IIP to 5%, and a drop in February CPI inflation to 3.61%. While this encouraging macroeconomic environment can bolster the market temporarily, it is unlikely to sustain a prolonged rally.

Nifty 50 and Sensex, were closed on Friday, March 14, in celebration of Holi. On Thursday, the stock markets finished on a low note, with Nifty 50 closing at 22,397.20, down 73.30 points or 0.33 percent.

Similarly, the Sensex mirrored Nifty 50's trend and ended at 73,828.91, dropping over 200 points or 0.27 percent.

Throughout the week, market sentiment was mixed as investors responded to various global and domestic economic indicators.

The US inflation data (CPI) came in lower than anticipated, offering a slight boost to the US markets, which in turn affected some other emerging markets. It also provided support for the US stock market, which had dropped three percent.

On the domestic front, Indian inflation cooled off due to falling food prices, and the Index of Industrial Production (IIP) surpassed expectations. As time moves forward, investors will attentively monitor global events and domestic economic data to assess market direction, according to market analysts.

The broader market also showed signs of weakness, with the Small-cap and Mid-cap indices dropping by almost 4% and 2%, respectively. In terms of sectors, the IT index was at the forefront of the decline, followed by the banking and new-age industries. At the same time, consumer confidence continued to diminish in light of increasing inflation and economic uncertainty.

From an institutional perspective, foreign institutional investors (FIIs) registered net outflows of ₹5,729 crore in the cash segment, whereas domestic institutional investors (DIIs) invested ₹5,499 crore, which helped bring some stability to the market.

The week ahead promises to be eventful for both global and Indian markets, propelled by important macroeconomic data releases. The mood of the market will largely depend on key events such as the US Federal Reserve's Interest Rate Decision, India’s WPI Inflation, US Core Retail Sales (MoM) figures for February, US Initial Jobless Claims, US Existing Home Sales figures for February, as well as the UK Bank of England's Interest Rate Decision for March and UK Unemployment Rate for January, as noted by Puneet Singhania, Director at Master Trust Group.

Market Outlook by Dharmesh Shah, Vice President, ICICI Securities

1. Equity benchmark took a breather and concluded volatile week on a subdued note at 22,397, down 0.7%. Sectorally, financials, power outshone while IT extended correction amid fear of US recession. Meanwhile, softer-than-expected inflation data in both the US and India coupled with strong IIP data boosted the market sentiment. The weekly price action formed a small bear candle with shadow on either side, indicating breather amid elevated volatility.
2. The lack of follow through strength above last week’s high signifies prolonged consolidation in the broader range of 23,000-21,800 range. In the process, volatility would prevail tracking tariff related development and US Fed meet outcome wherein key support is placed at 21,800 levels. Meanwhile, suitability above 20 days EMA (placed around 22,650) would lead to extended pullback towards 23,000.
3. Structurally, the index has corrected >16% over past five months which hauled index to long-term rising trend line (adjoining Cy22-23 lows). We believe, ongoing consolidation would help index to form a stage for next leg of pullback while absorbing tariff related anxiety.
4. The bearish extreme reading on momentum as well as sentiment indicator resulted into slowdown in downward momentum that augurs well for base formation in coming weeks. Meanwhile, the ratio chart of Nifty 50 / Dow Jones has recorded breakout from 6 months falling channel, indicating domestic market could relatively outperform the US equities going forward.
5. Meanwhile, the cool off in US Dollar index and 10-year bond yield and decline in brent crude oil prices bodes well for emerging markets.
6. On the sectoral front, Banking, NBFC, Power, Consumption while beaten down Capital Goods, PSU offers favourable risk-reward set-up.
7. On the broader market front, the Midcap and Small cap indices relatively underperformed the benchmark while sustaining above last week’s low, suggesting that the midcap index could witness extended consolidation.
8. Over past three week’s, Nifty 50 has been facing stiff resistance around 21,650. Hence, for a meaningful pullback to materialise, index need to decisively sustain above 21,650, else continuation of consolidation wherein strong support is placed at 21,800 being confluence of following observations:

a. 61.80% retracement of the Oct-23 and Sept-24 rally (18,837-26,227).

b. A rising trendline drawn adjoining subsequent major lows off Jun-22 (15,183) is placed at 22,000.

c. The 24-month EMA support is placed in the vicinity of 22,000.

Stock To Buy This Week - Dharmesh Shah

Dharmesh Shah of ICICI Securities recommends buying Tata Power this week.

Buy Tata Power in the range of ₹346-357 for the target of ₹398 with a stop loss of ₹324.

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 14/03/2025 or have no other financial interest and do not have any material conflict of interest.

The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.