Stock market today: The domestic benchmark indices, Nifty 50 and Sensex, opened little changed on Wednesday, following four consecutive sessions of gains, as financials took a pause after a rally fueled by optimism from strong pre-earnings updates and the Reserve Bank of India’s recent lending reforms.
The Nifty 50 saw a minor dip of 0.01%, settling at 25,105.15, while the BSE Sensex rose slightly by 0.06% to reach 81,977.69 as of 9:16 IST. Last week, the RBI’s decision to allow banks to fund acquisitions and increase the cap on loans for purchasing shares in IPOs was part of various measures aimed at enhancing bank lending.
This, combined with encouraging pre-earnings updates from banks for the September quarter, had a positive impact on the benchmark indices, resulting in both the Nifty 50 and the Sensex rising approximately 2% over the last four sessions.
Nifty 50 Outlook by Sagar Doshi, Senior Vice President- Research, Nuvama Professional Clients Group
Nifty 50
Nifty 50 has gained for past 4 consecutive days fuelling the recovery from its consolidating range of past week. Majority of short covering above 24,850 to 25,220 has been played out and the balance of this week can be seen between 24,750 – 25,250 given the chart structure. Index has seen some profit taking after it hit a 2 week high in yesterday’s session.
Bank Nifty
On the Bank Nifty – having continued its outperformance against the Nifty 50 since the start of last week, the index has ended at a 2 month high. Bank Nifty has recovered nearly 2,000 pts from its last week’s low as momentum increased after RBI policy. Some profit taking can be seen at current level after a fast run up, however the index needs to close above 56,160 this week for continued buying stance into next week.
Stocks To Buy on Wednesday
On stocks to buy on Wednesday, Sagar Doshi of Nuvama recommended three stocks – Amber Enterprises India Ltd, BSE Ltd, and Hindustan Zinc Ltd.
Amber Enterprises India Ltd (BUY): LCP: ₹8,417; SL: ₹8,130; TGT: ₹9,050
After breaking out above its cup and handle formation on weekly charts in September, stock has done a retest on the same. Fresh momentum for a 8-10% rally can commence now, given that it has given second highest daily closing yesterday and is on track for highest ever weekly closing on charts.
BSE (BUY): LCP: ₹2,231; SL: ₹2,100; TGT: ₹2,500
Having reclaimed back above its 200 DMA, BSE has also given a breakout from its sloping trendline which was in place for the past 16 weeks – from the start of this correction. Capital market stocks are facing tailwinds which could also support the ongoing technical reversal on the stock.
Hindustan Zinc Ltd (BUY): LCP: ₹489; SL: ₹468; TGT: ₹530
A 16 month sloping trendline breakout has been witnessed last week on the counter on daily and weekly charts, while a retest on the same has been met. Upmove for another 8-10% upside can now resume given the sectoral flavour in the current series being played out in this market.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
