It took 46 sessions for
Nifty to reclaim the 10,000-mark from its 52-week low of 7,511 hit on March 24. This period saw strong volatility in domestic stocks as the Covid-19 pandemic triggered a major disruption in businesses and normal life. Besides, trade tensions between the US and China, sustained selling by foreign institutional investors (FII) and volatility in crude oil prices added to the woes.
Most index components contributed to the ongoing rally. However, State Bank of India (SBI) stood out as a non-performer. Shares of the public sector lender are still down nearly 5 per cent from its March 24 levels.
“We are very selective on PSU banks. However, we like State Bank of India as it is far superior from others in terms of operations, asset quality and cost,” said Lalitabh Shrivastawa, Deputy Vice-President, Research, Sharekhan.
All eyes are on SBI’s March quarter numbers now. The bank is projected to post 16 per cent growth in net interest income and 34 per cent expansion in pre-provision operating profit for the quarter. The results will be out on Friday, June 5.
Shares of M&M and Cipla have rallied the most at 72 per cent and 69 per cent, respectively, during this period. Among others, Zee Entertainment,
Reliance Industries, UPL, Hindalco, Bharti Infratel and Vedanta have rallied 50-70 per cent.
In terms of valuation, Nifty is looking undervalued compared with its long-term moving average. On Wednesday, the 50-share index traded at a P/E value of 23.31 times compared with a five-year average of 24.72.
Among other index constituents, Grasim, Adani Ports, Britannia, Bajaj Auto, Hero MotoCorp, Sun Pharma, Tata Motors, IndusInd Bank, Bharti Airtel, Dr Reddy’s Axis Bank, ONGC, L&T and ITC have gained 30-50 per cent since March 24.
11 money-making ideas for next 4 weeks
Stock picking
1 Jun, 2020
The bulls are having a field day, prancing about on Dalal Street and trying to announce that they are back. However, analysts look at it as nothing but a bear market rally and advise caution. Technical analyst Milan Vaishnav, Founder of Gemstone Equity Research & Advisory Services, said, "While some profit-taking is expected at higher levels, we recommend chasing the up-move with an overly cautious and stock-specific approach."Based on various brokerage recommendations, here are 10 stocks that can offer solid returns over the next 3-4 weeks:
Glenmark Pharma | BUY | Target Price: Rs 397
1 Jun, 2020
This counter appears to be consolidating in a 40-point range for the last 5 weeks, in the zone of Rs 360-320. Relatively higher volumes around the upper end of this trading range are suggesting that this counter is in for a breakout sooner than later. Hence, in anticipation of such a breakout, positional traders can create long positions with a stop below Rs 340 levels on a closing basis and look for a target of Rs 397.[Analyst: Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in]
Bata | BUY | Target Price: Rs 1,390
1 Jun, 2020
For the last couple of weeks, this counter appears to be consolidating in a range of Rs 1,390-1,245 levels. The way this counter bounced back from the lower end of the trading range on relatively higher volumes is hinting that slowly it can head towards the upper end of its trading range. Hence, positional traders should buy into this counter and look for a target of Rs 1,390, the analyst said. Stop suggested for the trade is a close below Rs 1,280 levels.[Analyst: Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in]
Exide Industries | BUY | Target Price: Rs 175
1 Jun, 2020
This counter appears to have emerged out of its recent congestion zone with a decisive breakout on the daily line chart. Hence, sustaining above Rs 157 levels, it can slowly head to test its 200-day moving average whose value is placed around Rs 175 levels. Interestingly, this level also coincides with 62% retracement value of its entire fall from the highs of Rs 208–124. Considering the strong support around Rs 156 levels, positional traders are advised to adopt a two-pronged strategy of buying now and adding further on dips, if any, into the zone of Rs 160-157 and look for a target of Rs 175. Stop suggested for the trade is close below 156.[Analyst: Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in]
Praj Industries | BUY | Target Price: Rs 65
1 Jun, 2020
After showing weakness in the last few weeks, the stock price witnessed an excellent upside bounce in the last week and closed higher. The formation of Doji-type candle patterns in the previous two weeks have coincided with near term bottom reversal in the stock price at Rs 52.50. Volume expanded with the rise in stock price and weekly RSI is currently showing positive indication. Traders can initiate but at current market price, add more on dips down to Rs 56.50 and wait for the upside target of Rs 65 in the next 3-4 weeks. Place a stop loss of Rs 55, the analyst suggested.[Analyst: Nagaraj Shetti, Technical Research Analyst, HDFC securities]
Japanese brokerage Nomura is underweight on domestic cyclicals, financials, auto, infrastructure and consumption and overweight export-oriented sectors like healthcare and pharmaceutical. M&M, Reliance Industries and ICICI Bank are among the names on its watchlist along with Lupin and
HCL Technologies.
Inflows from foreign institutional investors have resumed and this is supporting the recent rally in stocks. Reversing their two-month selling streak, overseas investors have pumped in a net of Rs 14,569 crore in May and Rs 8,138 crore so far in June.
In its ongoing momentum, the market has ignored high-frequency indicators signalling acute pain ahead for the economy. India’s economic growth slowed to 3.1 per cent during the January-March period and to an 11-year low of 4.2 per cent for the full financial year of 2019-20 amid a drop in consumption and investment.
“In the near term, we do have uncertainties. We’ll have to see how the
coronavirus crisis pans out. If there is a second wave, how far the first wave goes; all of those uncertainties remain. But it is suffice to say that there is a collective effort among countries globally to ensure that the economies will pick up and things come back on track,” said Anshul Saigal, Portfolio Manager, Kotak Mahindra AMC.
“We should be betting in favour of these measures playing out and being successful rather than against them. Because it has the might of government behind it. Eventually, we will tide over this crisis,” Saigal told
ETNow.