According to Santosh Meena, Head of Research at Swastika Investmart Ltd, due to their significant net sales in the Indian stock market this month. ₹35,000 crore, foreign institutional investor (FII) activity continues to be a focal point. Global variables, such as changes in US bond yields, the dollar index and crude oil prices, as well as geopolitical events, will also have an impact on the market in addition to domestic ones.
Also read: Week Ahead: Interim Budget 2024, US Fed Policy, Q3 results, auto sales among key market triggers this week
Nifty 50 and Sensex saw a spike in trading and volatility during the previous truncated trading week, resulting in a second straight week of losses largely due to weakness in the banking sector. While other sectors showed resilience, profit booking impacted some mid-cap and small-cap stocks.
The Nifty 50 ended 101 points, or 0.47%, lower at 21,352.60, and the Sensex ended 360 points, or 0.51%, lower at 70,319.04.
Also Read: Stock market today: Nifty 50, Sensex end with losses; banking, IT stocks among top drags; hats buck the trend
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“The benchmark indices closed on a negative note taking cues from the global market as the positive upside coming from the US economy delayed the optimism of a tax cut. FIIs are in sell mode as US benchmark bond yields rise. The broader market . is unable to hold on to gains as concerns over high valuations, underperforming results and continued geopolitical tension in the Middle East, followed by F&O expiry, are weighing on the market,” said Vinod Nair, Head of Research, Geojit Financial Services.
Wall Street closed mixed on Friday, with the S&P 500 ending at a record high as a result of inconsistent corporate earnings and soft inflation statistics.
The Dow Jones Industrial Average barely missed setting a new high, rising 0.2% to 38,109.43. However, the Nasdaq Composite Index fell 0.4% to 15,455.36, while the S&P 500 fell 0.1% to 4,890.97, ending a four-day record high.
Also read: Wall Street week ahead: Investors’ main focus on Fed rate decision, big tech earnings
Share Marketing Tips For This Week
The weekly price action resulted in a bearish candle bearing a lower high low, indicating the extension of a corrective bias. In the eventful week ahead, we expect volatility to remain high due to the Union Budget, the US Fed meeting and the progress of earnings. We expect the index to consolidate in the broader range of 22,000-20,800 amid a positive bias with stock-specific action. The key point to highlight is that, with the 4.5% correction of the past two weeks, the index enters the budget week on a lighter note, as support efforts seen from the lower band of consolidation coincided with the 50-day EMA. Thus, stocking up on quality stocks on dips would be a fruitful strategy to adopt, advises Dharmesh ShahAssistant Vice President (AVP), ICICI papers.
Bank Nifty approached the key support threshold of 200-day EMA amid oversold conditions, indicating an imminent pullback that would fuel the pullback in the Nifty 50 (as Bank Nifty carries a 35% weightage in the Nifty 50). Thus, we expect bank Nifty to hold 44,000 and stage a pullback to 46,400 in the coming weeks.
Stock Recommendations by Dharmesh Shah
On stocks to buy this week, Dharmesh Shah recommended two stocks:
Buy Reliance Industries Ltd (RIL) in the range of ₹2,680-2,715 for the purpose of ₹2,850 with a stop loss of ₹2,638.
Buy Steel Authority of India Ltd (SAIL) in the range of ₹114-117.50 for the purpose of ₹132 with a stop loss of ₹107.
Also Read: Market cap of 7 of top 10 most valuable firms declines ₹1.16 lakh crores; HDFC Bank biggest delay
Disclaimer: The Research Analyst or his relatives or I-Sec does not have actual/beneficial ownership of 1% or more securities of the subject company, as of 01/25/2024 (earlier date) or has no other financial interest and does not have any material conflict of interest.
The views and recommendations above are those of individual analysts, experts and second-hand companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.
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Published: 29 Jan 2024, 07:12 IST