Synopsis: Dharmesh Shah of ICICI Securities suggests buying SBI and Bharat Dynamics on April 22 in the Indian stock market. Despite global uncertainties, the BSE Sensex and Nifty 50 closed positively after a week of losses. Vinod Nair from Geojit Financial Services noted sectoral profit booking. Shah predicts potential Nifty recovery and advises investing in good companies amid geopolitical tensions.
The Indian stock market witnessed a positive conclusion to Friday's trading session after four consecutive days of losses, despite ongoing tensions in the Middle East. The BSE Sensex gained 599.34 points or 0.83%, reaching 73,088.33, while the Nifty 50 closed at 22,147.00, up by 151.15 points or 0.69%. However, the broader market saw smaller gains, with the Nifty Small Cap 100 rising by 0.10%, and the Nifty Midcap 100 closing 0.61% higher.
Vinod Nair, Head of Research at Geojit Financial Services, noted that the recovery in Indian markets was driven by strong performances in large caps amidst global uncertainties. However, concerns persisted over domestic market losses throughout the week and caution prevailed globally due to the fragile situation in the Middle East. Sectors like banking and IT saw profit booking, while mid- and small-cap stocks corrected, reflecting worries over premium valuations and muted Q4 earnings expectations.
Looking ahead, Dharmesh Shah, Vice President at ICICI Securities, predicts a potential recovery in the Nifty towards last week's high of 22,400, with stock-specific action amid Q4 earnings progression. Despite expected bouts of volatility due to geopolitical tensions, earnings, elections, and monthly expiry, investors are advised to stay invested in good companies during volatile episodes. The structural positive stance is reiterated, given historical trends of market resumption post-settlement of anxiety around such events.
Key observations include Nifty's corrections since January 2024, each at 5%, indicating resilience and adherence to past price behavior. Similarly, Bank Nifty's holding of its rising 100-day EMA suggests potential pullback opportunities towards last week's high of 48,200 levels.
As for stock recommendations, Shah advises buying SBI in the range of 735-755 with a target of 840 and a stop loss of 698. He also suggests purchasing Bharat Dynamics in the range of 1810-1840 with a target of 1970 and a stop loss of 1730.
