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Business News/ Markets / Stock Markets/  Top Stock Recommendations: Dharmesh Shah of ICICI Securities suggests buying SBI, Bharat Dynamics on April 22
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Top Stock Recommendations: Dharmesh Shah of ICICI Securities suggests buying SBI, Bharat Dynamics on April 22

The Nifty made a sharp recovery (400 points) on Friday, as buying demand emerged near key support of 21700, despite weak sentiments, as prices approached oversold readings.

Buy or sell stocks: Dharmesh Shah of ICICI Securities recommends buying SBI and Bharat Dynamics this week.Premium
Buy or sell stocks: Dharmesh Shah of ICICI Securities recommends buying SBI and Bharat Dynamics this week.

Indian stock market: The Sensex and the Nifty 50, key domestic equity indices, wrapped up Friday's trading session positively after four consecutive days of losses, amidst ongoing tensions in the Middle East.

The BSE Sensex, comprising 30 shares, concluded the session with a gain of 599.34 points or 0.83%, reaching the level of 73,088.33. Similarly, the Nifty 50 achieved a closing level of 22,147.00, up by 151.15 points or 0.69%. However, the broader market lagged behind the benchmark indices, with the Nifty Small Cap 100 edging up by 0.10%, and the Nifty Midcap 100 closing 0.61% higher.

Also read: Week Ahead: Q4 Results, Iran-Israel conflict, global cues among key market triggers this week

“Indian markets staged a recovery as the week drew to a close, fuelled by strong performances in large cap amid global uncertainties. Optimism prevailed with hopes of limited prospects of escalation in Iran-Israel tensions. However, the domestic market failed to offset the losses sustained throughout the week. Globally, caution persisted as the situation in the Middle East remains fragile. Further, the potential delay of a US rate cut due to higher-than-expected inflation, robust retail sales, and elevated oil prices invoked subdued sentiments. This was evident through notable upticks in the dollar index, US bond yields, and the price of yellow metal. Sectors like banking and IT witnessed profit booking," said Vinod Nair, Head of Research, Geojit Financial Services.

He further added, “Mid- and small-cap stocks also corrected, highlighting concerns over premium valuations. Muted Q4 earnings expectations and weak IT results could extend the consolidation. FIIs continued to remain risk-averse, a trend seen since last week. Large caps could offer solace for investors, given earnings stability. GDP, PMI, and jobless claims data from the US next week will provide further insights into the Fed's policy. Additionally, Indian PMI data and Q4 results are anticipated to shape market trends in the coming week."

Market Outlook by Dharmesh Shah, Vice President, ICICI Securities

The Nifty made a sharp recovery (400 points) on Friday, as buying demand emerged near key support of 21700, despite weak sentiments, as prices approached oversold readings. Easing geo-political worries, lower crude prices and recovery in global indices helped sentiments.

Also read: Dividend Stocks: ICICI Securities Ltd, Aster DM Healthcare, among others to trade ex-dividend next week; check full list

In the coming week, Nifty holding Friday’s panic low of 21700 will keep pull back options open, followed by a gradual recovery towards last week’s high of 22400 which remains important resistance. Meanwhile, stock specific action will be in focus amid progression of Q4 earnings

Going ahead, bouts of volatility amid geo-political tensions, earnings and elections and monthly expiry may not be ruled out. However, investors should not panic, rather continue to invest in good companies during episodes of volatility.  We reiterate our structurally positive stance, as we have seen in the past that once anxiety around such events settles down, markets tend to resume their primary up trend

Key observation has been that, Nifty’s two corrections since January 2024 has been 5% each and even last week index maintained this price behaviour, by recovering post 5% correction from life highs and also held lower band of past three-month rising channel, despite geo-political worries 

Also read: FPIs offload 5,254 crore in Indian equities on high US bond yields, turn net sellers in debt markets

Bank Nifty

Index held it’s rising 100-day ema for third time since Feb 2024 as buying demand emerged from oversold readings. Bank Nifty, holding Friday’s panic low of 46500, will keep pull back options open with gradual recovery towards last week’s high of 48200 levels. Buy the dips.  

Top Stock Recommendations

Buy SBI in the range of 735-755 for the target of 840 with a stop loss of 698.

Buy Bharat Dynamics in the range of 1810-1840 for the target of 1970 with a stop loss of 1730.

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 12/04/2024 (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.

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Published: 21 Apr 2024, 03:46 PM IST
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