On Friday, the Indian equity market showcased a slight increase, with key indices, the BSE Sensex and NSE Nifty 50, experiencing minor gains amidst profit-taking by investors. Despite a positive outlook fueled by expectations of a potential trade agreement between India and the US, record-high GST collections for April, and a steady influx of foreign investments, rising geopolitical tensions between India and Pakistan created a cloud of caution over the market.
Market Performance Overview
The 30-share BSE Sensex concluded the day at 80,501.99, up by 259.75 points, or 0.32%. Earlier in the day, it surged to a peak of 81,177.93, marking an impressive gain of 935.69 points or 1.16%. Similarly, the NSE Nifty 50 finished with a modest rise of 12.50 points, or 0.05%, closing at 24,346.70.
- Key Highlights:
- Sensex closed at 80,501.99.
- Nifty 50 reached 24,346.70.
- Intraday high for Sensex: 81,177.93.
- Intraday gain for Sensex: 935.69 points.
Investor Sentiment and Market Outlook
Dharmesh Shah, Vice President at ICICI Securities, anticipates potential short-term reactions due to escalating geopolitical concerns but encourages investors to remain calm. He advises building quality portfolios with a medium to long-term strategy, especially during the ongoing Q4 earnings season.
Market Insights:
- This week was marked by subdued trading activity with the Nifty 50 facing resistance around the 24,500 level, indicating prevalent profit booking.
- The Infrastructure and Realty indices showed resilience, with gains of 2.3% and 2.6%, respectively.
- A notable upward trend persists, as evidenced by the formation of higher highs and lows, while the Nifty 50 is expected to maintain its outperformance against mid-cap stocks.
What to Expect Next Week
Investors should brace for continued volatility influenced by geopolitical dynamics. The Nifty 50 is expected to stabilize within the 24,500-23,500 range, with stock-specific movements during this earnings season.
- Support Level: 23,800-23,500
- Resistance Level: 24,500
Historical data suggests that, despite short-term fluctuations, markets will eventually stabilize. Therefore, investors are advised to seize opportunities during dips, particularly in May, where the Nifty 50 has seen positive returns in 9 out of 12 years since 2013, averaging a 2.1% return.
Key Factors to Watch
Several factors may serve as tailwinds for the market:
- A potential Bilateral Trade Agreement between India and the US
- Continued Foreign Institutional Investment (FII) inflow
- Strengthening of the Indian Rupee
- Declining Brent crude oil prices
Stock Recommendations for the Coming Week
Shah recommends considering Sun Pharmaceutical Industries for investment.
- Buy Range: ₹1,780 – ₹1,833
- Target Price: ₹2,040
- Stop Loss: ₹1,687
In conclusion, while the market navigates through uncertainty, strategic investment in quality stocks can yield substantial returns in the long run. Stay informed and ready to capitalize on market opportunities!
