Buy or sell: Sagar Doshi of Nuvama recommends buying Zydus Life, Larsen & Toubro, and EIH today

Stock Market News: Domestic benchmark equity indices, the Sensex and the Nifty 50, started Wednesday's trading session on a positive note, driven by energy stocks due to a decline in crude oil prices, while IT companies recovered from a recent decline brought on by concerns over a slowdown in client spending and demand in the US.

The 30-share BSE Sensex increased by 270.18 points to 72,740.48 in early trade. Rising 87.35 points, the NSE Nifty got to 22,092.05 level.

Strong economic fundamentals continue to sustain the market's optimistic undertone, according to Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. It is likely that the market will remain in a stage of consolidation for a few more days before beginning a fresh upward trend in April. The steady inflows into equities mutual funds, which are gaining traction, represent a noteworthy structural trend in the market.

Also Read: Sensex Today | Share Market Live Updates: Sensex jumps 350pts, Nifty at 22,150; O&G, Auto, Bank, FS gain, FMCG, IT muted

The Sensex and Nifty 50 ended their three-day winning run on Tuesday's trading session on the backdrop of three major headwinds—the anticipation that the US Fed will extend higher rates, the drag on Nifty IT stocks due to Accenture's dismal forecast, and the sell-off by foreign institutional investors (FIIs), according to analysts. 

On Tuesday, the 30-share BSE Sensex ended lower by 361.64 points or 0.50% at 72,470.30 level while the Nifty 50 closed at 22,004.70 level, down 92.05 points or 0.42%.

Also Read: Stock market today: Nifty 50, Sensex snap 3-day winning run; mid, smallcaps outperform

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Nifty 50 Outlook by Sagar Doshi, Senior Vice President- Research, Nuvama Professional Clients Group

Nifty 50 has started this truncated-expiry clubbed week on a softer note, with the larger set-up remaining rangebound. 21,700–22,250 is the wide range expected to hold on for the rest of this month. The futures premium on the index is unusually high, with only 2 trading days left for the monthly expiry. This suggests that the market is expecting a round of short covering before ending the March series. As of Friday's end of trade, FII's had 72,000 short contracts open in index futures, which could trigger a round of covering given the 90-pt premium on current-month futures. In the cash market, FII’s have been flat in terms of inflow on a month-to-date basis; however, over $5.5 billion in inflows have been absorbed by Indian markets from the domestic institutional investors (DII) desk in the last 4 weeks. Overall, to end this fiscal year, Nifty 50 is expected to hit the upper end of the range this week for 22,250+, said Sagar Doshi, Senior Vice President-Research, Nuvama Professional Clients Group.

Also Read: Stocks to buy: Coal India, Bajaj Finance, JSW Energy, Policybazaar among 12 stocks that can rise 8-27% in next 3-4 weeks

Bank Nifty Outlook

Bank Nifty broadly traded in less than a percent band for the past 3 trading days ahead of this holiday-shortened week. The index has bounced back nearly 1,000 points from its 6-month trendline support while it now heads towards 47,150 / 47,450, with a round of short covering expected to unfold in the next couple of trading days. Support continues to remain at 46,600 on the lower side. Next month, Bank Nifty (Apr) futures are commanding a rollover premium of over 500 pts, which suggests that index bulls are positively aligned for a short covering move for Bank Nifty in the short term, highlighted Doshi.

Stock Recommendations by Sagar Doshi

On stocks to buy on Wednesday, Sagar Doshi has recommended three stocks:

Zydus Lifesciences Ltd (BUY): LCP: ₹1,018.10; Stop Loss: ₹979.50; Target Price: ₹1,085.00

According to Sagar, a bullish flag breakout coupled with an all-time high close indicates strong bullish momentum. A positive crossover on RSI is indicative that the current bullish momentum could gain pace.

Larsen & Toubro Ltd (BUY): LCP: ₹3,670.00; Stop Loss: ₹3,540.00; Target Price: ₹3,925.00

Doshi stated that the stock has witnessed a swing breakout on the daily charts. Momentum indicators and volumes have started to inch up, indicative of smart money flowing into the stock.

EIH Ltd (BUY): LCP: ₹442.55; Stop Loss: ₹427.60; Target Price: ₹474.50

According to Doshi, a breakout from a bullish flag and pole pattern ends a consolidation range that has been in effect since February 2024. This breakout also marks a fresh all-time high closing for the stock, which reinforces the bullish momentum.

Also Read: Indian stock market: 6 key things that changed for market overnight - Gift Nifty, US consumer confidence to oil prices

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 decisions.