Stocks to buy or sell: Dharmesh Shah of ICICI Securities suggests buying Ultratech Cement, HAL shares on 21 April 2025

Stock market news: Indian stock markets kicked off the new week with a strong performance, buoyed by favourable inflows from foreign investors and the visit of US Vice President J D Vance to India.

According to analysts, this high-profile visit is anticipated to significantly influence the development of a potential agreement between India and the US, thereby enhancing investor confidence.

The benchmark Nifty 50 index commenced trading at 23,949.15, reflecting an increase of 97.50 points or 0.41 percent. In a similar vein, the BSE Sensex also experienced a positive start, climbing by 355 points or 0.45 percent to reach 78,908.60 points.

The equity benchmarks Sensex and Nifty 50 rose over 6 percent in the past four trading sessions due to a temporary halt in tariffs by the US, the return of foreign investors to the domestic market, and forecasts for above-normal rainfall during the upcoming southwest monsoon season, all of which boosted investor confidence. Additionally, a drop in retail inflation to its lowest level in nearly six years has amplified expectations for a potential third interest rate cut by the Reserve Bank of India (RBI), as noted by market analysts.

In the last four trading days, the BSE benchmark index increased by 4,706.05 points, or 6.37 percent, while the Nifty 50 gained 1,452.5 points, equivalent to a 6.48 percent rise.

As a result, the total wealth of investors surged by ₹25.77 lakh crore, bringing it to ₹4,19,60,046.14 crore (USD 4.90 trillion) over the last four days.

The stock markets were closed on Friday, April 18, in observance of ‘Good Friday.’

According to Vishnu Kant Upadhyay, AVP - Research & Advisory at Master Capital Services, the recent surge in Indian equities over the last week has been influenced by a mix of improved valuations following the previous correction, a relief rally prompted by the US tariff pause, and favorable signals from the RBI’s monetary policy.

Nonetheless, the durability of this upward trend will significantly depend on the forthcoming Q4 earnings season. A number of major corporations are expected to announce their quarterly and full-year FY25 earnings in the next week. These outcomes will be crucial in determining the direction of the market, as investors and market participants will closely scrutinize corporate performance and forward guidance. If earnings fall short of expectations, it could negatively impact current market sentiment and reverse recent gains.

Market Outlook by Dharmesh Shah, Vice President, ICICI Securities

a. On expected lines equity benchmark relatively outperformed the US Market (which is down 1.5% as on Wednesday) post temporary tariff relief. Nifty witnessed a follow through strength to last week’s sharp recovery and reclaimed 23800 marks. Consequently, settled the week at 23,852, up 4.4% for the week. Sectorally, all major indices ended in green led by Financials, Defence, infra. The weekly price action formed a bull candle carrying positive gap below it, indicating acceleration of upward momentum.

b. Going ahead, we reiterate our positive stance and expect Nifty 50 to head towards 24,200 in coming weeks. Key point to highlight is that, the current recovery in Nifty 50 is backed by the faster pace of retracement as past nine sessions decline (23,869-21,744) retraced in just six sessions. In addition to that, Bank Nifty which carries 37% weightage in Nifty 50 has retraced six months corrective phase (54,467-47,703) in just two months. The faster pace of retracement signifies structural turnaround that bodes well for continuation of uptrend towards 56,000 in coming months.

c. However, one should note that, Nifty 50 and Bank Nifty, both have witnessed sharp recovery of 10% and 11% respectively over past two week’s which hauled daily stochastic oscillator in overbought territory (placed at 98), indicating possibility of temporary breather at higher levels cannot be ruled out. However, such a breather should not be construed as negative. Instead capitalise it to accumulate quality stocks amid ongoing earning season. Hence, buying on dips would be the prudent strategy to adopt wherein focus should be on domestic themes rather than global one.

d. The current up move is backed by the significant improvement in improvement in momentum as well as breadth indicator. On the momentum indicator front, monthly stochastic bounced from February month low of 11 (lowest since 2002) while on the breadth front, percentage of stocks above 50 and 200 days SMA have jumped to 70% and 30% after bottoming out at bearish extreme (at 7%) in last month. The across sector participation bodes well for durability on ongoing rally.

e. The formation of higher peak and trough signifies continuation of upward momentum that makes us revise support base upward at 23300 for Nifty 50 while for Bank Nifty it is placed at 52,300.

f. On the global macro front, two years range breakdown in US Dollar index coupled with cool off in Brent crude oil prices augurs well for pullback in emerging markets.

Stocks To Buy This Week - Dharmesh Shah

Dharmesh Shah of ICICI Securities recommends UltraTech Cement Ltd, and Hindustan Aeronautics Ltd (HAL).

1. Buy Ultratech Cement in the range of ₹11,400-11,890 for the target of ₹12,965 with a stop loss of ₹10,778.

2) Buy HAL in the range of ₹4,140-4,240 for the target of ₹4,698 with a stop loss of ₹3,914.

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 17/04/2025 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.