Stocks to buy or sell: Dharmesh Shah of ICICI Securities suggests buying HAL, PFC today - 1 April 2025

Stock Market News: India's main stock indexes dipped slightly on Tuesday, impacted by technology shares, as investors remained cautious following remarks from US President Donald Trump regarding potential reciprocal tariffs.

The Nifty 50 was down 0.92% at 23,304.05, while the Sensex decreased by 1.21% to 76,473.28 as of 10:31 IST.

The Indian stock markets were closed on Monday, March 31 for Eid-Ul-Fitr.

Nifty 50 and Sensex, ended on a negative note during the last trading session of the 2024-25 fiscal year on Friday, with the benchmark Sensex dropping by 191 points amidst weak global trends and uncertainties regarding Trump tariffs.

Sensex fell by 191.51 points or 0.25 percent, closing at 77,414.92 in a day marked by volatility. At one point, it tumbled by 420.81 points or 0.54 percent to reach 77,185.62. The Nifty 50 saw a decrease of 72.60 points or 0.31 percent, settling at 23,519.35.

Throughout the 2024-25 financial year, the Sensex increased by 3,763.57 points or 5.10 percent, while the Nifty 50 rose by 1,192.45 points or 5.34 percent.

This rally was fueled by investors purchasing undervalued stocks, the re-emergence of foreign inflows following a selling wave that had started in late September, and an uptick in economic indicators.

Vinod Nair, Head of Research at Geojit Investments Limited, mentioned that the last week of the current financial year started positively but ended on a flat note as investor sentiment dipped following the announcement of automobile tariffs. Even with consistent inflows from institutional investors, the market struggled to maintain its upward trend.

Banking stocks showed resilience, buoyed by hopes of possible rate cuts by the RBI during the upcoming MPC meeting. On the other hand, the automobile and pharmaceutical sectors lagged due to ongoing worries about tariffs and their broader implications.

Nair pointed out that the coming week should provide more clarity regarding tariff changes, allowing investors to evaluate their effects on the global economy. Furthermore, the market will keep a close eye on the Indo-US bilateral trade meeting, which is expected to conclude by Saturday, for possible trade policy developments. Important economic indicators to watch include the US job openings data and India’s PMI, both of which will offer insights into economic activity in their respective areas. In the meantime, investor attention is shifting toward quarterly earnings reports, which are expected to shed light on the recovery of earnings.

Market Outlook by Dharmesh Shah, Vice President, ICICI Securities

1. Indian equities snapped its five months corrective phase (longest ever losing streak in three decades) and settled the volatile week on a positive note at 23,519, up 0.7%. Sectorally, financials remained at forefront along with Defence, and PSU for the week while pharma, auto took a breather. In the process, broader market relatively underperformed. The weekly price action formed a doji like candle with long upper shadow carrying higher high-low, indicating profit booking at higher levels after recent sharp up move.

2. The Nifty 50 has staged a strongest up move since September 2024 that has helped index to log a resolute breakout from six months falling trendline. Key point to highlight is that, the recent up move is backed by the faster pace of retracement as it entirely retraced past 19 session decline in just 14 sessions, indicating structural turnaround that makes us reiterate our positive stance and expect Nifty 50 to head towards 24,200 in April as it is 80% retracement of last leg of decline (24,857-21,965). However, move towards 24,200 would not be in a linear manner as bouts of volatility in the backdrop of looming US tariff announcement would prevail wherein. Hence, buying on dips would be the prudent strategy to adopt as strong support is placed in the 23,000-22,800 range. Our positive bias is further validated by following observations:

a. The index has formed an outside bar on the monthly chart after five months decline, indicating conclusion of corrective bias

b. Bank Nifty: The swift up move in banking space helped Bank Nifty to surpass past two months high, suggesting inherent strength

c. Structure: Current up move of 9% is strongest since September that confirms resumption of uptrend. As a result, previous five-month “sell-on-rally” approach has now shifted to a “buy-on-dips” strategy as sentiment has improved

d. FII’s Flow: FII's have extended their buying spree over sixth consecutive session (longest buying spree in six months), indicating return of buying interest from FII's that further boost the market sentiment

e. Breadth: Significant improvement in market breadth augurs well for durability of ongoing up move as currently >50% stocks of Nifty 500 universe are trading above their 50 days SMA compared to early March reading of 7

f. On the broader market front, Nifty midcap and small cap indices have seen a rebound after approaching maturity of price and time wise correction. Historically, maximum average correction in Midcap and small cap indices have been to the tune of 27% and 29% while time wise such correction lasted for 5 months. Subsequently, both indices have seen 28% returns in next six months

g. Formation of higher peak and trough indicates buying demand at elevated support base, which makes us revise the support levels at 23,000, as it is confluence of 50% retracement of the current up move (21,965–23,869). This level is expected to act as a strong cushion, ensuring that dips remain buying opportunities rather than trend reversals.

Stock To Buy This Week - Dharmesh Shah

Dharmesh Shah of ICICI Securities recommends buying Hindustan Aeronautics Ltd (HAL), and Power Finance Corporation Ltd (PFC).

Buy Hindustan Aeronautics Ltd (HAL) in the range of ₹4,160-4,280 for the target of ₹4,750 with a stop loss of ₹3,948.

Buy Power Finance Corporation (PFC) in the range of ₹408-420 for the target of ₹470 with a stop loss of ₹384.

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 28/03/2025 or have no other financial interest and do not have any material conflict of interest.

The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.