Indian Stock Market Hits All-Time Highs! Dharmesh Shah Recommends Buying Tata Consumer, Union Bank for Next Week

On Friday, the Indian stock market surged to new heights, with the benchmark indices Sensex and Nifty 50 hitting record highs. This happened after the US Federal Reserve cut interest rates earlier in the week, boosting investor confidence in global markets.

The Nifty 50 climbed 1.48% to 25,790.95, while the Sensex rose 1.63% to 84,544.31, both reaching new all-time closing highs. Over the week, the Nifty 50 and Sensex gained 1.7% and 2%, respectively, marking five weeks of gains in the past six.

Vinod Nair, Head of Research at Geojit Financial Services, explained that the Indian market benefitted from the Fed’s 50-basis point interest rate cut. The global economy’s continued strength is expected to have a positive short- to medium-term impact, encouraging foreign investments. Sectors like finance and automobiles are seeing strong momentum, while traditional sectors like FMCG are also performing well due to rising demand and lower costs.

Market Outlook by Dharmesh Shah, ICICI Securities

Dharmesh Shah, Vice President at ICICI Securities, shared his view on the current market. He noted that the equity market had a positive week, with the US Fed’s rate cut boosting sentiment. While the market started the week slowly, Friday’s strong performance pushed the Nifty 50 to an all-time high of 25,849, surpassing the earlier target of 25,800. The continued uptrend is supported by strong buying in the Bank Nifty.

Shah predicts that the Nifty 50 will likely reach 26,200 in the coming month. However, he cautioned that the market has risen sharply in the past two weeks, which may lead to some short-term cooling off. Any dip should be seen as a buying opportunity, with strong support at 25,300.

He highlighted that large-cap stocks have recently outperformed mid-caps, benefiting from the weakening US dollar, especially if the dollar index falls below 100. This would increase global liquidity, particularly benefiting emerging markets like India.

Shah also mentioned that Bank Nifty has bounced back strongly, led by large private banks, and this sector is expected to continue driving the market upwards. Bank Nifty could move towards 54,800, with key support at 52,800.

Sectoral Outlook

Shah expects the banking, financial services, capital goods, IT, infrastructure, real estate, and consumption sectors to perform well, while PSU banks are at critical support levels.

The support for Nifty 50 is now at 25,300, aligning with the 20-day EMA and last week’s low.

Stocks to Buy Next Week

Dharmesh Shah recommends two stocks for next week:

1. Tata Consumer Products Ltd: Buy in the range of ₹1,195-1,220, with a target price of ₹1,295. The stop loss is set at ₹1,140.
2. Union Bank of India: Buy in the range of ₹120-124, with a target price of ₹140. The stop loss is set at ₹114.