Top Stock Recommendations: Dharmesh Shah of ICICI Securities suggests buying SBI, and NTPC today

Stock Market News: In early trade on Monday, the domestic benchmark indices, Sensex and Nifty 50 saw a roughly 4% spike, reaching new all-time highs. This was due to exit polls indicating an overwhelming victory for the BJP-led NDA in the Lok Sabha polls.

Early trading saw the 30-share BSE Sensex rise 2,777.58 points, or 3.75%, to a new high of 76,738.89. The NSE Nifty reached a new all-time high of 23,338.70 after rising 808 points, or 3.58%.

According to exit polls conducted on Saturday, the BJP-led NDA is anticipated to secure a sizable majority in the Lok Sabha elections, guaranteeing Prime Minister Narendra Modi's continued leadership for a third consecutive term. On June 4, the votes will be counted.

Also Read: Indian stock market: How is market expected to open on Monday post exit polls, GDP data?

Stock markets ended their five-day losing streak on Friday due to value investing and investors shifted their attention to exit polls that was out on June 1.

The 30-share BSE Sensex climbed by 75.71 points or 0.10% to settle at 73,961.31. The Nifty 50 rose by 42.05 or 0.19% to close at 22,530.70.

In the five days leading up to Thursday, Nifty 50 and Sensex fell more than 2% due to extreme volatility in expectation of the Lok Sabha polls.

The RBI's Monetary policy outcome, which is set for June 7, will be the next significant trigger after the election results. A crucial area to keep an eye on will be how foreign investors react following the election results. Globally, macroeconomic data from China and the USA will also be quite important in determining market sentiment, according to market experts.

Also Read: Indian stock market: Analyst say ‘ache din’ to continue, here's why

Market Outlook by Dharmesh Shah, Vice President, ICICI Securities

The index started the week on a positive note and clocked a fresh All-time high. However, profit booking from higher levels dragged Nifty 50 around 22,500. Consequently, weekly price action formed a bear candle carrying higher high-low, indicating profit booking amid elevated anxiety ahead of General Election outcome.

Along with robust technical set up and exit poll outcome favouring stable government at the center, markets are likely to begin the week on a buoyant note. We also expect volatility to subside post-Election outcome. Hence, we reiterate our positive stance and expect Nifty 50 to head towards our earmarked target of 23,400 in coming weeks backed by the strong global cues. In the process, 22,400 would continue to act as key support. Thus, any temporary breather should be capitalised as incremental buying opportunity. On the sectoral front, Banking, Public Sector Undertakings (PSU), Capital Good & Infra, Defense, Power and Telecom would be in focus.

Structurally, key point to highlight is that, since start of CY24, Nifty 50 has not corrected for more than 5% on multiple occasions despite host of negative news. Consequently, Nifty 50 has formed a strong higher base formation at 21,800. For the upcoming week, key support is placed at 22,400 being confluence of following observations:

A) 50 days EMA placed at 22,392

B) 50% retracement of current up move (21,821-23,110)

C) Past two week’s low of is placed at 22,404

On the Bank Nifty front, we expect it to head towards 51,000 in coming weeks while strong support remains at 48,000.

Also Read: Stocks to buy: BHEL, IRCON looking attractive, here's why

Top Stock Recommendations:

Buy State Bank of India (SBI) in the range of ₹820-835 for the target of ₹890 with a stop loss of 792.

Buy NTPC in the range of ₹358-366 for the target of ₹408 with a stop loss of ₹342.

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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.