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Stock Market News: Domestic benchmark stock indices Sensex and Nifty 50 began Wednesday’s trading session with modest gains driven by ITC stocks, positive global cues and stable inflation data.
ITC posted its biggest one-day gain since September 2021, up more than 6% amid reports of a block deal in the company, with British American Tobacco Plc (BAT) most likely acting as a seller of ITC shares .
However, the broader market continued to decline as Nifty Small Cap hit its lowest intraday level since December 2023.
Also Read: ITC share price rises over 8% as BAT sells 3.5% stake in block deal, posts biggest single-day gain since September 2021
“In the near term, investors should focus on sustained weakness in the broader market, especially in the small-cap segment. Excessive valuations in these segments driven by the irrational exuberance of retail investors have been a concern for many months. But it took regulator SEBI’s strong message to trigger a correction in the Nifty Smallcap index of 10% from the February 8 peak,” said Dr VK Vijayakumar, chief investment strategist at Geojit Financial Services.
On Wednesday, the 30-share BSE Sensex opened higher by 325.44 points or 0.44% at 73,993.40, while the Nifty 50 opened at 22,432.20, up 96. 50 points or 0.43%.
Also read: February inflation remains stable at 5.1%, but food inflation increases
According to data released by the Ministry of Statistics on Tuesday, inflation in India, as indicated by the Consumer Price Index (CPI), fell one basis point to 5.09% in February 2024 from 5.1 % in January 2024. Based on the Index of Industrial Production (IIP), India’s manufacturing production fell to 3.8% in January 2024, according to government data.
Due to rising gasoline costs, US inflation rose in February for the second consecutive month. Government statistics released on Tuesday showed that the core consumer price index (CPI), which does not include spending on food and energy, rose 0.4% in January from February, up from 0.3% in January .
Also read: US inflation rises again in February
With significant profit booking from Monday’s session, trading on Tuesday in the domestic market was range-bound. However, experts said concerns over overvalued valuations continued to put pressure on mid- and small-cap companies.
On Tuesday, the 30-share BSE Sensex ended marginally higher by 165.32 points or 0.22 per cent at 73,667.96, while the Nifty 50 closed flat at 22,335.70, up 3.05 points.
Also Read: Nifty 50, Sensex with flat end; mid- and small-cap companies suffer deep cuts; investors lose $4 crores in one day
Nifty 50 Outlook by Sagar Doshi, Senior Vice President of Research, Nuvama Professional Clients Group
The Nifty 50 closed at all-time highs on the weekly charts during the past truncated week, while some pressure on the upper side was seen on a daily basis. The charts suggest that so far the index is above 22,200 and remains open to climbing to new all-time high levels of 22,700+. With no major events around the corner, markets are taking their time to digest the current regulatory concerns for the broader markets. And therefore, we believe that over the next week, large and mega cap stocks will likely outperform the broader markets and micro cap names, said Sagar Doshi, senior vice president of research at Nuvama Professional Client Group.
Ingenious bank insights
Bank Nifty is on track to trade with a 1,000-point band of 47,000 to 48,000 for next week as it completed its short-term rally in last week’s trades without managing to regain its all-time highs; Therefore, consolidation is expected for a couple of business days, Doshi noted.
Sagar Doshi Stock Recommendations
As for stocks to buy on Wednesday, Sagar Doshi recommended two stocks:
HDFC Bank (Buy): LCP: $1459.55; Stop loss of: $1,408.00; Target price: $1,560.00
According to Sagar, HDFC Bank has shown early signs of revived momentum as the stock broke above its 1,450 consolidation zone on the upper side. The volumes recorded on the swing breakout are above average, indicating strong participation.
Tata Consultancy Services (TCS) (Buy): LCP: $4,192.25; Stop loss of: $4,045.00; Target price: $4,485.00
Doshi stated that TCS recorded another record close for itself. This closure represents a new breakout, which marks the end of its consolidation since February 24. Above average volumes on the breakout are indicative of strong participation.
Also Read: Indian Stock Market: 8 Key Things That Changed For The Market Overnight – Gift Nifty, US Inflation To Oil Prices
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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