on Friday, Sensex It closed at 52,727.98, up 462.26 points or 0.88%. The Nifty 50 closed at 15,699.25, up 142.60 points or 0.92%.
From June 20 to 24, both the benchmarks have gained around 3%. During these days, investors’ wealth rose on BSE 7,40,977.89 crores.
BSE’s market cap remained at 234,86,923.67 crores on June 20 and jumped 242,27,901.56 crore on June 24.
Equity benchmarks behaved contrary to our expectations as downbeat global cues tracked rising concerns, said Dharmesh Shah, Research Analysts at ICICI Securities, Nitin Kunte, CMT, Pabitro Mukherjee and Vinayak Parmar in their technical note. inflation The rise in rates globally weighed on investor sentiment.
On Nifty 50, he said the downside momentum intensified upon breaching the March low of 15700 and further extended to the 15200 mark.
Going forward, the analysts said, “We expect the index to resolve higher gradually and extend a pullback towards the 16600 zone in the coming months, with strong support placed around the 14800-14600 zone, which we expect Expect to hold as 80%. Retracement of CY-21 rally (13596-18604), at 14600. Thus, dips should be used to build a portfolio by accumulating quality stocks in a staggered manner. “
The positive bias of analysts at ICICI Securities is based on four factors:
1. Percentage readings of stocks above the 200 DMA below 15 indicate extreme pessimism in the markets which eventually leads to a technical shortfall of at least 10% in the subsequent three months.
2. The index has already corrected 18% from life highs and is approaching oversold readings on the Weekly Momentum Oscillator. The weekly RSI has hit its lowest level (placed at 35) since May 2020. Historically, a reading of 35 on the weekly RSI has given a decent pullback, and analysts expect this momentum to continue in the coming months.
3. India has continued to outperform EM Basket even in the ongoing correctional phase despite significant selling by FIIs. In the past year, while the MSCI EM index has corrected over 40% from the high, India has performed relatively better as the benchmark has corrected only 18%.
4. India VIX and crude oil prices have cooled from recent highs. Indian equities have an inverse relationship with India VIX. Thus, providing the impetus for the acceleration of the ongoing pullback.
He said, “On the broader market front, in three instances over the past decade, the intermediate correction in Nifty Midcap, Smallcap indices has been 28% and 40% respectively. Presently, both the indices have corrected 25% respectively. and 34%.”
Therefore, analysts said, “any further corrections in the oversold zone are likely to be short-lived and will set the stage for a technical pullback in the coming weeks.”
Here are the top picks from ICICI Securities analysts:
BFSI – SBI, HDFC, Kotak Bank, Federal Bank and Bajaj Finance.
Telecom & Technology – Reliance, TCS, Infosys, L&T Infotech, HCL Technology and Coforge.
Capital Goods – L&T, ABB, Siemens, BEL, AIA Engineering, ELGI Equipments, Sanghvi Movers and Timken India.
Consumption – Hindustan Unilever, Titan, ITC, Asian Paints, Tata Consumer, Havells India, Jubilant Foods and Astral Poly.
Auto – M&M, Maruti Suzuki, Ashok Leyland, Jamna Auto, Mahindra CIE, FIEM Industries and Minda Industries.
Infra & Realty – DLF Ltd., Brigade Enterprise and Phoenix Mills.
Pharma & Chemicals – Divi’s Laboratories, Cipla, Syngene, Torrent Pharma, and SRF Ltd.
Metals – JSW Steel, Hindalco and Graphite.
Others – Adani Port, Indian Hotels, Zee Entertainment, Trent, Concor, Nosil, Balrampur Chinni, BDL, Bluedart, Dixon Technologies, Kansai Nerolac and NRB Bearing.
Markets Weekly Outlook:
Analysts at ICICI Direct for the week of June 27-July 1 expect Nifty to finally resolve the previous declining channel held at 15800 and gradually move towards 16200 levels in the coming weeks. In the expiry week, use the decline of 15400 to create long positions as the index is trading on highly oversold readings.
Analysts at ICICI Direct said that Brent oil price has breached the weekly rising trend line indicating loss of momentum and “we expect upsides to be limited in the 125-130 zone”.
According to analysts at ICICI Direct, IT and BFSI are the key sectors with favorable risk/reward favorable exposure, while auto and capital goods are expected to outperform. Analyst Prefers – SBI, HDFC, Kotak Bank, TCS, Maruti Suzuki, ITC, and Titan in Large Cap while in Midcap we are KPIT Technologies, Federal Bank, AIA Engineering, NRB Bearings, Ashok Leyland, Automotive Axles, Bharat Electronics, Havells like to. , Trent and Indian Hotel.
Yesha Shah, Head of Equity Research, Samco Securities, said, “There are a number of events coming up in the coming week that could affect the market mood. Globally, investors will take an in-depth analysis of the US quarterly GDP growth data in the USA. will officially enter a recession if they post a negative growth and thus could have an impact on global markets.”
“In India, vehicle sales figures will continue to fuel stock-specific moves on D-Street, as investors attempt to gauge the future trend,” Shah said. o Termination can cause volatility. Therefore, investors are advised to invest in good stocks with strong fundamentals, free cash flow and low leverage over the long term, ignoring short term issues.”