Buy or sell: Dharmesh Shah of ICICI Securities recommends buying Gail India and Gujarat Pipavav Port stock this week

Stock Market News: For the fourth consecutive session on Friday, the domestic benchmark indices, the Sensex and Nifty 50, ended higher. The previous week saw benchmark indices rise by more than 1% as Wipro and Mahindra & Mahindra (M&M) shares soared by about 11%. Amid an upbeat trend in global markets, the Nifty 50 finished over the 22,000 mark, tracking advances in blue chips like Larsen & Toubro (L&T), Infosys, and M&M.

With the exception of Metals, Media, and fast-moving consumer goods (FMCG),  most sectoral indices indices witnessed weekly advances.

The 30-share BSE Sensex ended higher by 376.26 points or 0.52% at 72,426.64 level while the Nifty 50 closed at 22,040.70 level, up 129.95 points or 0.59%.

Also Read: Stock market today: Nifty 50, Sensex rise over 1% this week as focus shifts to fundamentals; Wipro, M&M, SBI shine

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As Q3 earnings season draws to a close, market experts believe that the majority of companies Q3 results were in-line with the Street's estimates. This quarter saw continued demand and earnings growth, and expectations for the commercial performance of Indian corporations remained high. Rising expenses and input costs placed pressure on margins for a few companies.

"The overall earnings grew 34% YoY as compared to the estimate of 28% YoY. The star sectors of the Q3 earning season were Energy, Metal, BFSI, and cement with the highest YoY surge in net profit, driven by an upswing in the capex cycle, robust demand, and healthy margins. The major laggards were IT and FMCG," explained Arvinder Singh Nanda, Senior Vice President, of Master Capital Services Ltd.

Also Read: Wall Street week ahead: Nvidia, Walmart earnings and Fed minutes in focus

In particular, foreign institutional investors (FIIs) continued to be net sellers, offloading shares valued at ₹6,200 crore, while domestic institutional investors (DIIs) adopted a positive stance, purchasing shares valued at ₹8,700 crore, according to Santosh Meena, Head of Research, Swastika Investmart Ltd.

“With few definitive signals this week, market focus remains on the trajectory of the dollar index and US bond yields. Heightened crude oil prices pose a potential risk, although prevailing bullish sentiment largely overshadows negative developments. Additionally, attention is directed towards the recent RBI policy and US FOMC meeting minutes,” said Meena.

Share Market Tips For This Week

The index has formed a higher base above the 50-day EMA while absorbing a host of negative news, highlighting its inherent strength. Going ahead, we believe the Nifty 50 is poised for a breakout from five weeks of consolidation and gradually head towards 22,700 in the month of March as seasonal correction in election year approaches maturity (historically, the election year index tends to bottom out in February/March, followed by a pre-election rally). Thereby, bouts of volatility should not be construed as negative; instead, adopt the buy on dips strategy, which has been faring well. In the process, strong support is placed at 21,400, advised Dharmesh Shah, Assistant Vice President (AVP), ICICI Securities.

The Bank Nifty has resumed its uptrend after formation of a strong base above the 200-day EMA. We expect Bank Nifty to lead the next leg of the up move and head towards 47,500 in the coming weeks, where strong support is placed at 45,000.

Also Read: Week Ahead: Macro data, FII mood, global cues among key market triggers as Nifty 50 eyes 22,150+ this week

Stock Recommendations by Dharmesh Shah

On stocks to buy this week, Dharmesh Shah recommended two stocks:

Buy Gail (India) Ltd in the range of ₹178–183 for the target of ₹202 with a stop loss of ₹170. 

Buy Gujarat Pipavav Port Ltd in the range of ₹194–200 for the target of ₹228 with a stop loss of ₹184.

Also Read: Market Cap of six most valued firms slump by ₹71,414 crore, LIC and TCS biggest laggards

Disclaimer: The Research Analyst or his relatives or I-Sec do not have actual/beneficial ownership of 1% or more securities of the subject company, at the end of 16/02/2024 (preceding date) or have no other financial interest and do not have any material conflict of interest.

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 decisions.