The stock market experienced a modest decline on Tuesday, as the domestic benchmark indices—Sensex and Nifty 50—faced ongoing profit booking. The Nifty 50 index fell by 0.05%, closing at 25,796.9, while the Sensex dropped 0.04% to finish at 84,266.29. Despite this slight downturn, the market’s overall performance in September was robust, highlighting the delicate balance between profit-taking and continuing upward momentum.
September proved to be a stellar month for the Nifty 50, which surged by 2.3%, marking the fourth consecutive month of gains and reaching all-time highs. This rally was primarily driven by expectations of increased foreign investments following substantial rate cuts from the US Federal Reserve. However, the absence of substantial local market triggers led many investors to take profits, resulting in a slight pullback in the last couple of trading days.
In a positive sign, the Nifty Midcap and Small-cap indices closed at elevated levels, indicating that a lack of momentum does not necessarily signal an imminent market crash. Market participants are now turning their attention to the upcoming release of US non-farm payroll data, set for Friday, October 4th, which could provide additional direction for Indian markets.
Vinod Nair, Head of Research at Geojit Financial Services, noted a shifting trend in investments. Funds are moving from relatively expensive markets like India to more affordable Chinese equities, driven by recent stimulus measures from the Chinese central bank. As the market awaits the forthcoming Reserve Bank of India’s policy meeting and the second-quarter earnings reports, participants are eager for insights into the market’s future trajectory.
Nifty 50 Outlook by Sagar Doshi, Senior Vice President- Research, Nuvama Professional Clients Group
For the Nifty 50, Sagar Doshi forecasts a potential decline, predicting a further slide toward levels of 25,600 and 25,450 before it finds initial support. He highlighted that the index closed nearly 400 points down in the September 2024 monthly and quarterly closing. Any attempts to rally towards 25,900 may encounter selling pressure, with 26,000 now acting as a formidable resistance point.
Bank Nifty Analysis
The Bank Nifty index has been underperforming relative to the Nifty 50, showing a 1.7% decline, compared to Nifty’s 1.45% dip. The ratio chart between Bank Nifty and Nifty 50 suggests signs of a potential reversal. For three consecutive trading days, the Bank Nifty has closed below its previous day’s lows, reflecting inherent selling pressure in key frontline stocks. The index is likely to extend its decline toward 52,200 with any upward movements toward 53,250 expected to face selling resistance.
Stocks to Buy on Thursday – Recommendations from Sagar Doshi
When it comes to investment opportunities this Thursday, Sagar Doshi has singled out three stocks to consider: Vedanta Ltd, Sirca Paints India Ltd, and Adani Enterprises Ltd. Each of these stocks has shown promising bullish indicators, making them attractive for investors looking to capitalize on potential market rebounds.
Vedanta Ltd (BUY): LCP: ₹516; Stop Loss: ₹500; Target Price: ₹560
Vedanta Ltd remains a focal point within the metals sector as favorable macroeconomic conditions support its growth. The stock has recently closed at an all-time high after completing a four-month consolidation phase. With a consistent pattern of higher lows over the past 10-12 weeks, there is strong evidence of dip buying. Analysts predict that the stock could rise an additional 9-12% from its current market price, following the end of its consolidation breakout.
Sirca Paints India Ltd (BUY): LCP: ₹345; Stop Loss: ₹325; Target Price: ₹392
On technical charts, Sirca Paints India has surpassed its 200-day moving average and is poised for a trendline breakout following weeks of consolidation. The cooling prices on crude oil have set the stage for a further upward move, potentially allowing for a breakout above the resistance level at ₹361. This stock also exhibits a pattern of higher lows over the past six months, indicating strong accumulation, with projected gains of 10-12% anticipated post-breakout.
Adani Enterprises Ltd (BUY): LCP: ₹3,186; Stop Loss: ₹3,080; Target Price: ₹3,390
Adani Enterprises has recently closed at a four-week high, moving above its 200-day moving average—a positive development for the stock. A double-bottom formation has emerged below the ₹2,900 level on daily charts, indicating a strong recovery. Analysts expect the stock to gain momentum following a short-term trendline breakout above ₹3,140, with expectations of a 6-9% rally in the near term.
Disclaimer: The views and recommendations shared in this article are those of individual analysts and financial experts, not of this platform. Investors are advised to consult with certified financial advisors before making any investment decisions.
