Stock market today: Indian benchmark indices opened lower on Tuesday, 26 May, as investors adopted a cautious stance following fresh US military strikes in southern Iran, targeting boats allegedly involved in laying naval mines and missile-launch sites.
While Washington described the operations as defensive, the developments raised concerns about a potential escalation in the conflict, even as the U.S. and Iran continue negotiations aimed at ending the three-month-long war.
Reflecting the cautious sentiment, the Nifty 50 slipped 0.11% to 24,004.1, while the Sensex declined 0.35% to 76,224.14 in early trade as of 9:15 IST.
The pullback comes a day after both benchmark indices touched two-week highs on optimism that the US and Iran were nearing a peace agreement. However, renewed geopolitical uncertainty pushed Brent crude futures up nearly 2% to around $98 per barrel, tempering investor expectations of an imminent breakthrough and weighing on market sentiment.
Nifty 50 Outlook by Sagar Doshi, Senior Vice President- Research, Nuvama Professional Clients Group
Nifty 50
Nifty 50 ended over 300 points higher on Monday to start this truncated week as it breaks out from its 2-week-long consolidation. Target for this breakout is 500 points from the breakout zone of 23,750, which implies an additional 250 points upside even after Monday’s strong up move. Lower oil prices and positive advancement on the geopolitical front are fuelling this tailwind. The level of 23,760, which acted as resistance for 2 weeks, has now turned into support.
Bank Nifty
Bank Nifty continued its outperformance mentioned last week in our view; the index is up 3.5% in the last week v/s a 1.5% gain on Nifty 50. Given the ongoing strength and sloping trendline breakout over the past 1 month, the index is likely to head further higher towards 56,300/56,850, with Monday’s 54,500 acting as intermediate support.
Stocks To Buy on Tuesday
On stocks to buy on Tuesday, Sagar Doshi of Nuvama recommended three stocks – Bandhan Bank Ltd, Metropolis Healthcare Ltd, and CESC Ltd.
Bandhan Bank Ltd (BUY): LCP: ₹196; SL: ₹190; TGT: ₹212
The stock broke out of a bullish cup-and-handle pattern in late April, and a successful retest has been completed; the counter has now added more legs to march towards a fresh swing high of 212. Undercurrent appears strong, given that the retest is complete.
Metropolis Healthcare Ltd (BUY): LCP: ₹524; SL: ₹504; TGT: ₹565
The stock has broken out of its 4-year consolidation zone on the weekly charts, indicating a structural trend reversal. Sustained higher lows and bullish channel breakout on daily charts reflect strong momentum. METROPOLIS is sustaining above its 200 DMA, while demand is re-emerging around the 500-510 (buy on dip) zone, positioning the stock favourably for potential upside towards 565 levels.
CESC (BUY): LCP: ₹185; SL: ₹177; TGT: ₹200
After an 18-month trendline breakout last month, CESC has been in strong hands, and a quick retest of this breakout has been underway since last week. The stock appears to have resumed momentum once again, given the underlying strength of this huge breakout. Another 7-9% upside unfolds from CMP, and even a 1% lower dip can be used to add longs in the existing set-up.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.
