Stocks to buy: The key benchmark indices of the Indian stock market ended higher on Monday, extending the recovery after a strong gap-up opening as easing expectations of an immediate Federal Reserve rate hike and a pullback in crude oil prices improved risk appetite. The advance was notable for its breadth, with mid- and small-cap stocks participating alongside the benchmark indices, suggesting that the session was driven by broader buying rather than a narrow rebound in heavyweight stocks. Healthcare was the notable laggard, underperforming an otherwise constructive market.
The global backdrop also turned more supportive. Expectations of an October Federal Reserve rate hike eased sharply, reducing some of the pressure that higher US rates have placed on emerging-market assets. Crude oil prices also moderated as rising exports from West Asia and the prospect of a G7 release of strategic reserves eased concerns over supply disruptions, providing additional relief to oil-importing economies such as India.
Stock market outlook by Sumeet Bagadia
Sumeet Bagadia, Executive Director at Choice Broking, believes the Indian stock market bias is weak, although the stabilisation from lower levels is encouraging. He said that a doji-like candle reflects indecision, with buyers defending lower levels but supply still evident near the highs.
Speaking on the outlook for the Nifty 50 index, Sumeet Bagadia said, “Immediate support is placed at 22,350–22,400, while 22,600–22,650 remains the key hurdle. RSI at 28.15 continues to indicate weak momentum, although the stabilisation from lower levels is encouraging. PCR at 0.99 suggests a balanced derivatives setup, while a higher VIX at 14.775 points to increased volatility. A sustained move above 22,650 could strengthen the recovery attempt.”
On the outlook for the Bank Nifty index, Bagadia said, “The setup remains cautious as the index is yet to overcome the overhead supply zone, while RSI at 36.31 remains below its average of 37.38 and signals subdued momentum. The recovery in PSU Banks supported the broader banking space. Holding the recent support zone and sustaining above the intraday high would be important for the rebound to gain further strength.”
Sumeet Bagadia’s stock recommendations
Regarding stock recommendations for Tuesday, Sumeet Bagadia recommended these five breakout stocks to buy: AU Small Finance Bank, Poonawalla Fincorp, Groww, Graphite India, Usha Martin.
1] AU Small Finance Bank: Buy at ₹1029 | Target ₹1130 | Stop Loss ₹980;
2] Poonawalla Fincorp: Buy at ₹452 | Target ₹500 | Stop Loss ₹430;
3] Groww: Buy at ₹187 | Target ₹205 | Stop Loss ₹178;
4] Graphite India: Buy at ₹816 | Target ₹890 | Stop Loss ₹780; and
5] Usha Martin: Buy at ₹511 | Target ₹555 | Stop Loss ₹485.
Disclaimer: This story is for educational and informational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified financial experts before making any investment decisions.
