Buy or Sell: Dharmesh Shah of ICICI Securities recommends buying SBI and V-Guard Industries today

Stock Market News: The beginning of the new financial year saw new highs for the domestic equities benchmark indices, the Sensex and Nifty 50, driven by metal stocks following positive data from China. An improvement in a crucial US inflation figure also helped the overall sentiment. 

The BSE Sensex rose by 0.81% to reach an all-time high of 74,254.62, while the blue-chip NSE Nifty 50 index climbed by up to 0.91% to a new record high of 22,529.95.

Bullish sentiment is underlying the market, and it is moving forward. Even though the market has been consolidating, the Nifty's recent 2 trading day spike of 322 points suggests that the upward trend can continue. Dr. V K Vijayakumar, Chief Investment Strategist, Geojit finance Services, advised investors to keep an eye on largecap stocks in selected pharmaceutical, capital goods, automotive, and finance companies as they are expected to report strong Q4 results.

On the last trading day of the fiscal year 2024, the domestic stock benchmark indices, the Sensex and Nifty 50, concluded the day strongly upbeat amid favourable global cues. Sensex increased by over 25% and Nifty 50 by almost 29% during FY24.

The Nifty 50 ended the day at 22,326.90, up 203.25 points or 0.92%, while the 30-share BSE Sensex closed higher by 655.04 points or 0.90% at 73,651.35 level. Also, the small- and mid-cap groups wrapped in significant gains on a broader front. The BSE Midcap index had a 0.62% boost, while Smallcap finished 0.33% higher.

Also Read: Stock market today: Nifty 50, Sensex jump almost 1% each; investors earn nearly ₹3 lakh crore in a day

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Analysts believe that the market will be influenced by the Reserve Bank of India's (RBI) Governor-led Monetary Policy Committee (MPC), which is scheduled for April 3 and will end on April 5, auto sales figures that will kickstart from April 1, and macroeconomic data the following week.

Global markets are presently in a fantastic mood, according to Pravesh Gour, Senior Technical Analyst at Swastika Investmart Ltd. The Dow Jones is up 2.08% and the Nasdaq is up 1.17% in March 2024. The dollar index and US 10-year bond rates are also down, which supports the market. All of these factors will be thoroughly watched since they may impact the mood of the market.

The US ISM services PMI for March will be released on April 1, while US Fed Reserve Chairman Jerome Powell's address is set for April 3. Job openings for the US JOLTS will be announced on April 2. Further, April 5 will see the release of US non-farm payroll statistics along with the March unemployment rate. These variables will be attentively watched since they can affect the mood of the market.

Also Read: FY24 share market review: Sensex jumps 25% past year. Can it go beyond 84,000 in fiscal 2024-25?

Market Outlook by Dharmesh Shah, Vice President, ICICI Securities

On expected lines, Nifty 50 managed to hold the key support threshold of 21,700 and gradually resolved higher towards our earmarked target of 22,400. Going ahead, we expect the index to endure its northbound journey and gradually head towards 22,700 in the coming weeks, said Dharmesh Shah, Vice President, ICICI Securities.

Empirically, in the general election year, the index has a tendency to bottom out in the first quarter of the calendar year, followed by a rally (minimum 14% rally from lows) towards the general election outcome in each of seven instances over the past three decades. In the current scenario, we expect index to maintain the same rhythm, as index has already undergone a corrective phase in the first quarter and formed a higher base. Thereby, setting the stage for the next leg of the bull rally towards 23,400 by the election outcome. In the process, 21,900 would act as immediate support, which we expect to hold, explained Dharmesh Shah, Vice President, ICICI Securities.

Also Read: Shares to buy in FY25: Mid-cap, small-cap indices rebound from 3-month low. Top 5 stocks to buy for long-term

Shah's positive bias is further validated by the following observations:

A) Bank Nifty: The robust price structure of heavy-weight banking constituents signifies inherent strength that bodes well for the leadership of BFSI in the next leg of the upmove. We expect Bank Nifty to retest the life high of 48,600 while strong support is placed at 46,400, said Shah.

• B) Seasonality: In an election year, April has been positive on 5 out of 7 occasions over the past three decades, with an average gain of 3.8%.

• C) Firm Global Cues: Buoyancy in the global market confirms strength in equities as US and UK markets are trading at life highs. We expect the Nifty 50 to perform in tandem with its global peers as the domestic market has a direct correlation with the developed markets.

Also Read: Dividend Stocks: Ashok Leyland, Varun Beverages, among others to trade ex-dividend next week; check full list

Stock Recommendations by Dharmesh Shah

On stocks to buy on Monday, Dharmesh Shah recommended two stocks:

Buy State Bank of India (SBI) in the range of ₹738–754 for the target of ₹838 with a stop loss of ₹698.

Buy V-Guard Industries Ltd in the range of ₹328–336 for the target of ₹382 with a stop loss of ₹307. 

Also Read: FY24 Review | Brent rises nearly 9% in last 12 months on OPEC cuts, Middle-East tensions; Will oil hit $100 in FY25?

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 28/03/2024 (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.