Stock market today: Indian stocks started the day on a negative note, and the rupee fell to an all-time low on Tuesday, amid high crude oil prices and negotiations to resolve the Iran conflict that appeared unstable, raising concerns about supply and the potential economic repercussions of the war.
The Nifty 50 decreased by 0.44% to 23,712.2 at 9:20 IST, while the BSE Sensex declined by 0.56% to 75,590.56.
Of the 16 primary sectors, 10 recorded losses. The broader small-cap and mid-cap indices fell by 0.5% and 0.3%, respectively.
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Sagar Doshi recommends buying Dr Reddys Laboratories, Grasim Industries, and Hindustan Unilever Ltd (HUL).
Dr Reddys Laboratories has broken out from an 18-month consolidation on weekly charts and has retested the breakout. Its rising 200 DMA is expected to act as support.
Grasim Industries made a fresh all-time closing high on a day of broad market selling, indicating strong money flow. This also marks the end of its 22-month sideways consolidation.
HUL is forming a bullish flag pattern on daily charts after a rally. While it has underperformed the broader market recently, a breakout from its current technical consolidation is considered likely.
The Indian stock market is being impacted by rising crude oil prices, geopolitical tensions related to the Iran conflict, and concerns about inflation and economic growth. The rupee has also fallen to an all-time low.
Rising crude prices adversely affect the world’s third-largest oil importer, as they intensify inflationary pressures and impact economic growth and corporate profitability.
Rising crude oil prices pose a challenge for the globe’s third-largest oil buyer, intensifying inflation concerns and affecting economic growth and corporate profits.
Investors were also awaiting India’s retail inflation figures for April, expected later today, which might provide insight into how the conflict in Iran has influenced price dynamics in the economy.
Nifty 50 Outlook by Sagar Doshi, Senior Vice President- Research, Nuvama Professional Clients Group
Nifty 50
Nifty 50 experienced extreme pressure to start this week and failed to recover after a gap-down opening to end at the lowest point in the day and at a one-month low. Nifty slumped as India pressed the panic button over currency and oil crises. Any close below yesterday’s low of 23,800 could allow for a further slide towards 23,300 at least, while a defence of 23,800 today could allow the index to consolidate within the 23,800 – 24,200 range.
Bank Nifty
Bank Nifty also fell in line with the broader Nifty 50 after a week of outperformance, as pressure remained across the board amid a spike in oil prices, amid uncertainty over the West Asia crisis and the PM’s appeal for a reduction in oil and gold purchases. A one-month low was registered on Bank Nifty as well, allowing the pressure to mount further towards 53,700 on the downside if yesterday’s low is breached.
Stocks To Buy on Tuesday
On stocks to buy on Tuesday, Sagar Doshi of Nuvama recommended three stocks – Dr Reddys Laboratories Ltd, Grasim Industries Ltd, and Hindustan Unilever Ltd (HUL).
Dr Reddys Laboratories Ltd (BUY): LCP: ₹1,279; SL: ₹1,240; TGT: ₹1,368
Stock has broken out from its 18-month consolidation on the weekly charts,completing its retest of the breakout as well. Its rising 200 DMA is likely to act as a smoothed support going forward. Strong traction is likely to unfold once the stock starts trading above the 1,325-1,330 zone.
Grasim Industries Ltd (BUY): LCP: ₹2,984; SL: ₹2,900; TGT: ₹3,200
Stock made a fresh all-time closing on a day when the frontline and broader markets saw intense selling due to external factors, indicating money flow in a weak market. This also marks the end of its 22-month sideways consolidation and a breakout from it, leading to a 5-7% upside rally.
Hindustan Unilever Ltd (HUL) (BUY): LCP: ₹2,307; SL: ₹2,222, TGT: ₹2,400
HUL is forming a bullish flag pattern on daily charts after a 12-15% rally from its recent low. Though the stock has underperformed the broader market in the current recovery, given the technical consolidation on the charts, its breakout to the upside is far more likely than to the downside. With a 4% SL, a target of 8-10% upside should be eye-catching to trade on.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
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