Stocks to buy or sell: Dharmesh Shah of ICICI Securities suggests buying United Spirits tomorrow – 30 December 2024 | Stock Market News

Stock Market News: The domestic benchmark indices, Nifty 50 and Sensex, rose on Friday, showing gains in a week marked by reduced trading activity, primarily driven by auto stocks after last week’s significant fall made valuations more appealing.

The Nifty 50 climbed 0.27% to close at 23,813.4 for the day, while the Sensex rose by 0.29% to reach 78,699.07. Both indices recorded approximately 1% gains this week, following a 5% decline last week, which was the largest drop in 30 months.

Analysts pointed out that the markets have struggled to maintain the initial rally in recent sessions due to selling from foreign investors, a trend that is likely to persist until stronger earnings signals are observed.

Vinod Nair, Head of Research at Geojit Financial Services, noted that the absence of major catalysts led to the market closing flat with a slight positive inclination this week. Robust performances in key sectors like banking and pharmaceuticals helped counterbalance declines in the IT sector, providing support to the major indices. Likewise, mid and small-cap stocks also ended with little change.

Ongoing worries regarding Foreign Institutional Investor (FII) outflows and a weakening rupee, along with potential negative tariffs and lowered expectations for interest rate cuts in 2025, led to a subdued market trend.

The strengthening US dollar and rising US bond yields are causing FII outflows, although the reduced magnitude of these outflows offers some reassurance. In the near future, the market is anticipated to closely monitor the upcoming Q3 results, which will be critical in determining the direction of the market.

Market Outlook by Dharmesh Shah, Vice President, ICICI Securities

1. Indian equity benchmarks taken a breather after last week’s sharp decline and concluded truncated week at 23,815, up 1%. The weekly price action resulted into small bull candle confined within last week’s sizable bear candle, indicating breather after >1,200 points decline amid oversold conditions. In the process, trading activity remained muted as weekly turnover ( ₹79,000 cr.) remained below one-month average turnover of ₹100,000 cr., indicating lower participation.

2. Amidst lackluster week, Nifty 50 traded in 300 points range, highlighting supportive efforts above 200 days EMA after approaching oversold territory. Going ahead, a decisive close above 23,900 would fuel the upward momentum towards 24,400 in coming weeks as it is 61.8% retracement level of the recent decline (24,857–23,537) and 50 Days EMA levels. Failure to close above 23,900 would lead to prolongation of consolidation in 23,900-23,300 range wherein stock specific action would continue. Hence, accumulating quality stocks on dips would be the fruitful strategy to adopt.

3. Key point to highlight is that, in the month of January, we expect volatility to remain elevated tracking new policy measures from Trump government, Q3FY25 earning season and Budget expectation which would have bearing on the market sentiment. Despite such an elevated volatility, Nifty 50 holding above 52 weeks EMA placed around 23,300 would showcase strength and that would set the stage for extended pullback. The key support threshold of 23,300 is based on following observations:

A) 61.80% retracement of Jun-Sept rally (21281-26277)

B) 52 weeks EMA placed at 23,350

4. Mirroring the benchmark move, broader market has been consolidating over past four sessions while sustaining above 100 days EMA. Further, the formation of higher peak and trough would be necessary on the weekly chart to resume uptrend. In the process, stock specific activity would continue while witnessing sector rotation.

Stocks To Buy This Week – Dharmesh Shah

Buy United Spirits in the range of 1,540-1,580 for the target of 1,698 with a stop loss of 1,508.

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 27/12/2024 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.