Indian Stock Market Ends Lower for Second Straight Session
Following weak global cues, the Indian stock market registered losses for the second consecutive day on Wednesday. The Nifty 50 index dropped 148 points to close at 21,517 levels, while the BSE Sensex plummeted by 535 points to reach the 71,356 mark. The Nifty Bank index also saw a decline of 56 points, finishing at 47,704 levels. Despite the bearish trend, the broader market indices closed in the positive, with the advance-decline ratio at 1.26:1.
Siddhartha Khemka, Head of Retail Research at Motilal Oswal, commented on the market performance, stating, Domestic equities continued to witness profit booking on the back of weak global cues and a fall in India’s PMI manufacturing to an 18-month low at 54.9 for December. Nifty declined for the second consecutive day and closed with a loss of 140 points at 21,526 levels. Khemka also noted that sectors such as realty, PSU banks, and pharma witnessed buying activity. The impressive Q3FY24 updates from PNB and Bank of Maharashtra contributed to a 2% rise in the PSU Bank Index. Railway stocks also rallied following the government’s announcement of plans to scale up production of Amrit Bharat trains. However, investors remained cautious globally after US manufacturing data indicated contraction.
Looking ahead, Nagaraj Shetti, a Senior Technical Research Analyst at HDFC Securities, provided an outlook for Nifty 50, stating that the short-term trend remains negative. A decisive move below 21,500 levels could lead to further downside, with potential next targets at 21,255 (20-day EMA) and 20,980 levels in the near term. Immediate resistance for Nifty today is placed at 21,670 levels.
Ashwin Ramani, a Derivatives & Technical Analyst at SAMCO Securities, offered insights on the outlook for Bank Nifty. Ramani noted that Bank Nifty showed resilience, with put writers building aggressive positions at the 47,500 Strike, preventing the index from falling below that level. The support at 47,500 has become stronger after the recent trading session. Additionally, Bank Nifty formed a hammer candle on the daily chart, indicating buyer interest at lower levels. Ramani cautioned that an intraday fall could occur if put writers exit and call writers enter at the 47,500 Strike.
In terms of stock-specific recommendations for the day, stock market experts suggested six stocks to consider:
1. IRCTC: The stock has exhibited robust performance above its short-term (20 Day), medium-term (50 Day), and long-term (200 Day) Exponential Moving Averages (EMA). With a Relative Strength Index (RSI) at 70 levels, signalling strength, IRCTC shows positive sentiment. A minor resistance is noted near ₹915 levels, and a breakthrough could lead to an upward movement towards the target of ₹935 levels and beyond.
2. Trent: Buy at ₹3058, target ₹3210, stop loss ₹2980. Trent’s share price is currently trading at ₹3058. On the daily chart, a morning star candlestick pattern has formed with good volume, suggesting a target price of ₹3210 in the short term.
3. Hindustan Petroleum: Hold support level of ₹412. Hindustan Petroleum’s share price has a bullish reversal pattern in the short term, indicating a possible retracement to ₹440. Holding the support level of ₹412, the stock may rebound towards the ₹440 level.
4. CESC: Buy at ₹135, target ₹142, stop loss ₹130. CESC has shown a bullish reversal pattern in the short term, holding the support level of ₹130. The stock could potentially reach the ₹142 level in the short term.
5. Greaves Cotton: The stock has given a breakout of resistance and closed stronger with increased volume, indicating bullishness. Close above the fast (20) EMA and trading in the higher zone suggest further upside potential.
6. Borosil Renewables: Buy at ₹466 to ₹477, target ₹500, stop loss ₹444. Borosil Renewables has experienced a breakout of the rising channel pattern on a daily timeframe, indicating an uptrend. Increased buying interest at current price levels and the breakout in the Relative Strength Index (RSI) support the upside move.
In other market news, foreign institutional investors (FIIs) sold shares worth ₹666.34 crore in the cash segment and ₹618.54 crore in the F&O future index. Domestic institutional investors (DIIs) also sold shares worth ₹863 crore in the cash segment and ₹79,382.77 crore in the F&O index future.
Lastly, seven stocks have been put under the F&O ban list, including Balrampur Chini Mills, Delta Corp, Hindustan Copper, IEX, National Aluminium, SAIL, and ZEEL.
Please note that the views and recommendations mentioned above are those of individual analysts or broking companies and not of Mint. Investors are advised to consult certified experts before making any investment decisions.
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