Stocks to buy or sell: Dharmesh Shah of ICICI Securities recommends buying SBI, Latent View Analytics tomorrow

Stock Market News: The key domestic indices, Nifty 50 and Sensex, recovered after an initial downturn on Friday, experiencing a significant rise and ultimately closing the day with marked increases. In short, the Indian stock markets made a strong comeback in the latter part of the day on Friday, finishing the week with slight gains.

The Sensex ended the day at 82,133.12 points, rising by 843.16 points or 1.04 percent, while the Nifty 50 finished at 24,768.30 points, up by 219.60 points or 0.89 percent. According to NSE data, the leading sectoral indices included FMCG, private banks, and consumer durables, whereas media, metal, and pharma sectors lagged behind. Over the week, the Nifty 50 and Sensex experienced gains of approximately 0.4% and 0.5%, respectively.

Vinod Nair, Head of Research at Geojit Financial Services, mentioned that the market’s rise on Friday helped the indices finish the week positively. The rebound from recent lows indicates that the buy-on-dips strategy is proving effective in the market. With inflation remaining within the RBI’s acceptable limits and an anticipated decrease in food prices due to seasonal adjustments in vegetable costs, this may foster expectations for a loosening of monetary policy in February.

A gradual improvement in IIP and core sector figures suggests a stronger performance in H2 earnings compared to the weaker H1 FY25. Meanwhile, investors will also be paying attention to the monetary policies of the US FED, BOE, and BoJ, as well as US GDP data, for additional guidance.

Equity benchmark concluded volatile week on a positive note amid expectation of US Fed rate cut. Nifty 50 settle the week at 24,768, up 0.4%. In the process, small cap index recorded fresh All Time High. The weekly price action formed a bull candle with lower shadow, indicating buying demand at elevated support base.

The fag end buying demand from 61.8% retracement of last up move helped index to recover lost ground as Nifty 50 managed to hold last week’s low of 24,000 on expected lines and staged a strong rebound, highlighting inherent strength. Going ahead, we reiterate our positive stance and expect Nifty 50 to resolve higher towards 25,200 while unfolding Santa rally. Hence, focus should be on accumulating quality stock on dips as support base is now revised upward at 24,200. Our positive stance is validated by following observations:

a) Heavy weight sectors to drive next leg of up move: Nifty IT endured its record setting spree over second consecutive week while Bank Nifty bounced after retesting two-month range breakout area (52,600). Cumulatively both sector carries 50% weightage in Nifty 50.

b) Broader market in focus: Ratio chart of Nifty 500 / Nifty 100 recorded breakout from 6 months consolidation, suggesting broader market to outperform going ahead.

c) Structure: Elongation of rallies followed by slower pace of retracement amid improving market breadth indicates robust price structure. Buying on dips would be the prudent strategy to adopt.

On the sectoral front, we remain positive on BFSI, IT, PSU, Capital Goods & Infra while Defense, Consumer Discretionary offers bargain buy opportunity.

The Nifty midcap index extended gains over fourth consecutive week while Nifty small cap index recorded fresh All Time High. The traction in the broader market is backed by improving market breadth as currently, 57% stocks of Nifty 500 universe are trading above 50 days SMA compared to November reading of 35%.

The formation of higher pean and trough makes us confident to revise support base at 24,200 levels as it is confluence of:

a) 61.80% retracement of current rally (23,263-24,857) at 24,250

b) Friday’s panic low is placed at 24,180

Stocks To Buy This Week – Dharmesh Shah

1. Buy State Bank of India (SBI) in the range of ₹830-863 for the target of ₹950 with a stop loss of ₹787.

2. Buy Latent View Analytics in the range of ₹493-507 for the target of ₹545 with a stop loss of ₹479.

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 13/12/2024 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.