Stock market today: The domestic benchmark indices, Sensex and Nifty 50, rebounded in early trading on Wednesday, influenced by a surge in global markets, as optimism about a potential rate cut by the US Federal Reserve and new foreign investments grew. The 30-share BSE Sensex increased by 287.94 points, reaching 84,916.10 in the early session, while the Nifty 50 rose by 86.65 points to hit 26,022.85.
Among the firms on the Sensex, major contributors to the gains included Asian Paints, Tata Steel, Trent, Larsen & Toubro, State Bank of India, and Adani Ports.
Conversely, Mahindra & Mahindra, Bajaj Finance, Eternal, and Axis Bank were some of the underperformers.
On a global scale, stock markets remain optimistic, bolstered by the ongoing positive trend in the US market. It’s anticipated that today’s market may receive an additional boost from the Federal Reserve, which is expected to reduce rates by 25 basis points. According to analysts, the commentary from the Fed regarding quantitative tightening will be more crucial than the rate change itself.
Market Outlook by Jay Thakkar, Vice President & Head of Derivatives and Quant Research, ICICI Securities
Nifty 50
Nifty 50 has closed in the negative territory in the last trading session and the India VIX has also turned positive in the last few trading sessions and this is an unusual behaviour wherein both of them goes up together. This phenomenon mainly happens during the short covering in the Index and now since the rollover is over it will be important to watch whether the Index can move up and make life highs or consolidate for some more time.
The Options data indicate that 26,000 levels is the key level, so above it the Index is likely to make a new high, however, until those highs are taken off the Index may consolidate within 25,400 to 26,000 levels. Hence, until 25,400 levels are not broken the short-term bias on the Index remains sideways to positive.
Stocks To Buy in the near-term – Jay Thakkar
Jay Thakkar of ICICI Securities recommends Amber Enterprises India November Futures, Shriram Finance November Futures, and Steel Authority of India Ltd (SAIL) November Futures.
Buy Amber Enterprises India November Futures in the range of ₹8,310-8,330; Target at ₹8,550; Stop loss of ₹8,180
Amber has provided a breakout from the sideways consolidation and with that it has also witnessed short covering which is also a positive sign, hence the near-term outlook is positive. The stock is trading well above its 20-day VWAP levels 8075 levels (November fut levels) as well as above its mean indicating that it’s trading well above its support levels. As per the options data 8400 levels have the highest call base and above it further upside is expected.
Buy Shriram Finance November Futures in the range of ₹720-730; targets at ₹755; stop loss of ₹710
Shriram Finance has provided a breakout above its multiple swing resistance and formed a life time high with long build up indicating that the short-term trend is bullish for the stock. The stock is also trading well above its 20-day VWAP of 691 (November fut levels) as well as above its mean indicating that the stock has good support at the lower levels. As per the options data, 700 is a critical support as it has the highest call base and till it is held the overall bias remains positive for the stock.
Buy SAIL November Futures in the range of ₹130-135; stop loss of ₹125; targets of ₹145 and ₹152
The Nifty Metal Index has been forming higher highs and higher lows and with that majority of the stocks are well in an uptrend and they have witnessed long additions mainly the ferrous metals names. SAIL, however, had witnessed long unwinding and thereafter some short additions in the recent consolidation and it has been one of the underperformers in the overall Index.
Now, it seems to be breaking out of the range and it is likely to witness some short covering which makes a better risk: reward on the long side. It has just climbed above its 20-day VWAP indicating that the stock is now gaining some strength which is a positive sign going ahead. The options data indicates that above 130 levels it can witness huge short covering, hence it is a good buy at the current levels.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
