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Top Stock Recommendations: ICICI Securities’ Dharmesh Shah Suggests Buying SBI, Bharat Dynamics on April 22

Vaseline 1 month ago

Indian stock market: The Sensex and the Nifty 50, major domestic equity indices, ended Friday’s trading session on a positive note after four straight days of losses amid ongoing tensions in the Middle East.

The 30-share BSE Sensex ended the session with a gain of 599.34 points or 0.83% to touch the level of 73,088.33. Similarly, the Nifty 50 closed at 22,147.00, up 151.15 points or 0.69%. However, the broader market lagged the benchmark indices with the Nifty Small Cap 100 up 0.10% and the Nifty Midcap 100 closing 0.61% higher.

Also Read: Week Ahead: Fourth Quarter Results, Iran-Israel Conflict, Global Signals Among Key Market Triggers This Week

“Indian markets staged a recovery as the week came to a close, fueled by strong performance by large caps amid global uncertainties. Optimism prevailed with hopes of limited prospects for escalation of tensions between Iran and Israel. However, the domestic market failed to compensate for the losses incurred last week. Global caution persisted as the situation in the Middle East remains fragile. Furthermore, the possible delay in a US interest rate cut due to higher-than-expected inflation, robust retail sales and high oil prices dampened sentiments. This was reflected in notable increases in the dollar index, US bond yields and the price of yellow metal. Sectors like banking and IT witnessed profit bookings,” said Vinod Nair, head of research at Geojit Financial Services.

He added: “Medium and small company shares also corrected, underlining concerns about premium valuations. Muted fourth-quarter earnings expectations and weak IT results could extend consolidation. FIIs remained risk averse, a trend that has been visible since last week. Large caps could provide investors with relief, given their earnings stability. GDP, PMI and unemployment figures from the US will provide further insights into Fed policy next week. Moreover, Indian PMI data and fourth quarter results are expected to determine market trends in the coming week.”

Market Outlook by Dharmesh Shah, Vice President, ICICI Securities

The Nifty staged a sharp recovery (400 points) on Friday as buying demand emerged near the key support of 21700 despite weak sentiments as prices neared oversold levels. Easing geopolitical concerns, lower crude oil prices and recovery in global indices helped sentiment.

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

In the coming week, Nifty will hold Friday’s panic low at 21700 and keep pullback options open, followed by a gradual recovery towards last week’s high at 22400, which remains a key resistance. Meanwhile, the focus will be on stock-specific action amid the rise in fourth-quarter earnings

In the future, periods of volatility amid geopolitical tensions, earnings figures, elections and monthly expirations cannot be ruled out. However, investors should not panic and continue investing in good companies during times of volatility. We reiterate our structurally positive stance as we have seen in the past that once concerns about such events subside, markets tend to resume their primary uptrend

The key observation was that Nifty’s two corrections since January 2024 were 5% each and even last week’s index maintained this price behavior, recovering from a 5% correction from lifetime highs and also hitting the lower band of the ascending channel for the past three months despite geopolitical concerns

Also read: Relieving FPIs 5,254 crore worth of Indian equities due to high yields on US bonds are becoming net sellers in the debt markets

Bank Handy

The index held its rising 100-day ema for the third time since February 2024 as buying demand came from oversold values. Holding Friday’s panic low at 46500, Bank Nifty will keep pullback options open with a gradual recovery to last week’s high at 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 1970 target with a stop loss of 1730.

Disclaimer: The research analyst or his family members or I-Sec do not have any actual/economic ownership of 1% or more securities of the relevant company at the end of 12/04/2024 (previous date), or have no other financial interest and do not have any material conflict of interest.

The above views and recommendations are those of individual analysts, experts and brokerage firms, not those of Mint. We advise investors to contact certified experts before making investment decisions.



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