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Stock Market News: Domestic benchmark stock indices Sensex and Nifty 50 ended the day higher for the third straight session on Friday amid mixed global cues.
In Friday’s session, the 30-share BSE Sensex ended up 190.75 points or 0.26% at 72,831.94, while the Nifty 50 closed at 22,096.75, a increase of 84.80 points or 0.39%.
Also Read: Stock Market Today: Nifty 50 and Sensex End Higher for Third Consecutive Session; investors earn more $2 crores
Stocks rallied last week, recovering from an earlier decline. Dovish comments from the Federal Open Market Committee (FOMC) helped most sectors gain momentum, said Santosh Meena, head of research at Swastika Investmart Ltd. With gains of nearly 5%, real estate, auto and metals were the ones that gained the most. The information technology (IT) sector, for its part, reversed the trend and fell more than 6% when Accenture lowered its forecasts.
The broader market provided comfort as small and mid-cap indices also saw notable rallies. The Nifty Midcap index, in particular, recovered significantly from its 100-day moving average (DMA), Meena explained.
Next week will be a truncated trading week as the national stock market will be closed on Monday for the Holi festival and on Friday for Good Friday.
Also Read: Stock market holidays in March 2024: BSE and NSE to remain closed on Holi and Good Friday
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Market Outlook by Dharmesh Shah, Vice President, ICICI Securities
In line with our view, support efforts emerged near 21,800 coinciding with the 50-day EMA which helped the index recover intra-week losses and closed the session above the 22,000 mark. Looking ahead, we expect the index to gradually recover and approach all-time highs of 22,500 in the coming months. In the process, bouts of volatility would offer incremental buying opportunities. Therefore, buying on dips would be the prudent strategy to adopt as strong support is placed at 21,700, which we expect to hold, advised Dharmesh Shah, Vice President, ICICI Securities.
Also Read: Dividend stocks: REC, SBI Cards & Payments, CRISIL, among others to trade ex-dividend next week; consult complete list
Shah’s positive bias is further validated by the following observations:
A) BankNifty has shown resilience against recent volatility as it has seen a healthy pullback where it retraced 50% of the previous four-week upward move and closed above the 20-day EMA, suggesting a revival of the bullish momentum that makes us believe that The index would head towards 48,000 in the next month, where strong support lies at 46,000. The strong price structure of heavyweight banking components signifies inherent strength that bodes well for the next leg of upward movement.
B) Since fiscal year 2018, on nine out of eleven occasions, the mean reversion towards the 50-day EMA, along with the market breadth approaching bearish extremes, has offered new entry opportunities. Even in the current scenario, the percentage of stocks above the 50-day SMA of the Nifty 500 universe bounced from 20 levels (oversold zone).
C) The dynamism of global peers bodes well for positive momentum in the domestic market, as the Nikkei hit new all-time highs despite the first rate hike in 15 years. US and European indices gained >2% each to hit new highs.
Also Read: 50+ Small Cap Stocks Post Double-Digit Growth as Broader Indices Gain 1.5%; Reliance Infra and BEML among the winners
Dharmesh Shah Stock Recommendations
On stocks to buy next week, Dharmesh Shah recommended two stocks:
Buy Life Insurance Corporation of India (LIC) in the range of $888–908 for the purpose of $1,030 with a stop loss of $824.
Buy ABB India Ltd in the range of $5,900–5,960 for the target $6,550 with a stop loss of $5,560.
Read also: FPI Pump $38,098 crore in Indian equities, debt inflows in $13,223 crore; Will the trend continue in FY25?
Disclaimer: The research analyst or his/her family members or I-Sec do not have beneficial/beneficial ownership of 1% or more of the securities of the subject company, as of the end of 03/22/2024 (previous date) or do not have no other financial interest and have no material conflict of interest.
The opinions and recommendations above are those of individual analysts, experts and brokerage firms, not those of Mint. We advise investors to consult certified experts before making any investment decisions.
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