Stock market today: The domestic benchmark indices, Nifty 50 and Sensex, started the day lower on Wednesday following a rise in retail inflation, which weakened expectations for an interest rate cut by the Reserve Bank of India (RBI) in the coming month, alongside worries about lackluster earnings and ongoing foreign fund withdrawals. The Sensex fell by 239.69 points to 78,435.49 in early trading, while the Nifty 50 dropped 103.15 points to 23,780.30.
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, pointed out that a notable aspect of this year's market trends is the considerable differences among various countries and regions. The US stands out as the top-performing market, achieving a 26.17% year-to-date return in the S&P 500. In contrast, India is lagging with only a 9.85% year-to-date return in the Nifty 50.
Meanwhile, the Euro Zone index, Stoxx 50, has recorded a mere 5.14% year-to-date return. The variations in performance are primarily influenced by the economic conditions and expectations surrounding earnings growth.
Nifty 50 is back to a 4 month low closing with the index losing over 600 points in the past 4 trading days. With these underlying weakness is visible on the index. The index is on its way to test the 200 DMA which it has not tested in the past 18 months of trade. Nifty 50’s 200 DMA currently stands at 23,550 and is moving higher. Hence, the ongoing sell off could continue to the point wherein Nifty 50 hits 23,550 – 23,600 odd zone. Any rise northwards of 24,000 is likely to get sold into for lower targets.
Bank Nifty has been trading in an ascending triangle formation for the past 5-6 weeks now. The index is holding on to the lower end rising trendline of this pattern which stands at Tuesday’s low of 51,000. This 51,000 level is currently acting as a strong support on the index while a break of the same on closing basis is likely to open downside doors to the tune of 1,200-1,500 points on the index. For now, 51,000 is a make or break level for the index to reverse or breakdown further in the ongoing sell off in leading indices.
On stocks to buy or Sell on Wednesday, Sagar Doshi of Nuvama recommended three stocks - L&T Technology Services Ltd, Indus Towers Ltd, and Indian Hotels Company Ltd.
L&T Technology Services Ltd (BUY) LCP : ₹5,278.85; Stop Loss : ₹5,020; Target Price : ₹5,810
Stock has given a breakout from sloping trendline which was in place all through the past 10 weeks of correction on daily charts. With this breakout, it has also reclaimed back above its 200 DMA reversing from its 61.8% Fibonacci retracement. On such a setup, stock is likely to march forward to 5,580 and there after for 5,810 on the upside.
Having corrected nearly 30% in the past 10 weeks of trade, Indus Tower is now showing signs of reduced selling pressure on rises. This signifies presence of buyers at current levels as the stock is not correcting in line to other broader market selloff. A retest of 200DMA on the upside allows a fair chance of bounce back on the stock in this correction. 200DMA currently stands at 345 on the upside.
Indian Hotels Company is back to record highs as the stock has once again picked up momentum after a sideways consolidation for 2 quarters. A fresh 6 weeks sideways trend has also ended with stock moving northwards in a time when broader markets are facing heat. This relative strength in the stock is likely to continue going forwards as well for targets of 777 on the upside on the counter.
Disclaimer: 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.
