Stocks to buy or sell: Dharmesh Shah of ICICI Securities recommends buying Tata Motors, Deepak Nitrite on September 30 | Stock Market News

Stock Market News: On Friday, the domestic benchmark indices, Nifty 50 and Sensex, closed slightly lower as investors took profits after a week during which the blue-chip indexes achieved record highs daily.

In the end, the Sensex fell 0.3% to 85,571.85, while the benchmark Nifty 50 finished 0.14% lower at 26,178.95 points. For the third week, the indices saw advances of 1.5% and 1.2%.

Due to an oversized reduction in US interest rates last Wednesday, capital flows into emerging markets have increased, and Indian benchmarks have reached record highs for seven straight sessions.

The Fed’s rate cut and steady economic data points, according to Vinod Nair, Head of Research at Geojit Financial Services, caused the market to react positively, accelerating foreign inflows and igniting momentum in domestic markets. Furthermore, the announcement of China’s economic stimulus has increased investor confidence, which has led to a noticeable upswing in global markets, especially in Asian indexes.

There is a clear pattern here: large-cap stocks, which are priced more reasonably than mid- and small-cap equities, which are beginning to show symptoms of fatigue, have been the main drivers of this advance.

Investor attention will be on Q2 earnings going forward, as they hope for an improvement in the profits outlook, highlighted Nair.

Going forward, market analysts anticipate that changes in commodity prices, the US dollar index, and important macroeconomic indicators from the US will play a crucial role in determining the market’s trajectory. Furthermore, geopolitical events will remain influential on the international platform. On the home front, forthcoming monthly automobile sales figures and quarterly reports from businesses could impact specific stock movements in the short run.

Market Outlook by Dharmesh Shah, Vice President, ICICI Securities

The equity benchmark extended record setting spree over third consecutive week aided by Chinese stimulus wherein large caps relatively outperformed the broader market. For the next week, we expect markets to consolidate in the 25,800 and 26,500 range with stock specific focus as earnings cues would kick in which would provide further directional bias. Key point to highlight is that, past 3 weeks Nifty 50 has rallied >1,500 points that hauled daily stochastic oscillator in overbought territory (placed at 91), indicating possibility of temporary breather at higher levels can not be ruled out. Only a decisive close below previous session low would result into pause in upward momentum till then continuation of upward momentum. Our positive bias is further validated by following observations:

a) The sturdy price structure of Banking and IT (which carries 50% weightage in Nifty 50) stocks signifies that broader positive structure remains intact. Meanwhile, recently underperformed Metal index has seen rejuvenation of upward momentum as it has given a breakout from four-month trading range with faster pace of retracement backed by rally in base metals aided by Chinese stimulus.

b) Brent prices declined sharply as supply sides concerns have eased and crude prices are expected to remain under pressure with downside target of 67-65 levels. Falling crude oil prices usually have inverse correlation with the domestic market.

Sectorally, we expect PSU banks, IT, Metals to remain in focus. Declining yields and recent correction would act as catalyst for PSU banks.

The buying demand at elevated support base highlight inherent strength that makes us revise support base at psychological mark of 25,800 as it is 38.2% retracement of recent up move (24,753-26,277) coincided with last weeks low of 25,847.

Stocks To Buy Next Week – Dharmesh Shah

On stocks to buy next week, Dharmesh Shah recommended two stocks – Tata Motors Ltd, and Deepak Nitrite Ltd.

1. Buy Tata Motors in the range of ₹970-990 for the target of ₹1,065 with a stop loss of ₹945.

2. Buy Deepak Nitrite in the range of ₹2,830-2,900 for the target of ₹3,275 with a stop loss of ₹2,668.

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 27/09/2024 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.