Top Stock Tips: ICICI’s Dharmesh Shah Recommends Buying SBI and Aditya Birla Fashion Amid Market Highs

India’s main stock indices, Sensex and Nifty 50, ended Friday on a flat note. Despite a slow day, Nifty 50 managed to finish above its previous close, helped by gains in energy stocks. It ended the day up 0.09% at 24,323.85, hitting a new closing high for the fourth time this week. Sensex closed at 79,996.6 points, down 0.07%, but still saw a 1.2% rise over the week, marking the fifth week of gains.

Broader Market Performance:

The Nifty Midcap 50 and Nifty Smallcap indices both outperformed the main indices, each closing 0.78% higher.

Positive Signals:

One bright spot for market analysts is the decline in the India VIX, which ended at 12.69, down 1.32%. Attention is now on the upcoming Union Budget, expected around 23rd-24th July during the Monsoon Session, and the start of the Q1 corporate earnings season this week.

Key Influences:

Prashanth Tapse from Mehta Equities notes that liquidity is a positive driver, with Foreign Institutional Investors (FIIs) buying ₹6,875 crores worth of stocks last week. Optimism is also boosted by expectations that the upcoming budget will spur consumer spending and infrastructure development, alongside a favourable outlook for the US economy.

Upcoming Economic Data:

This week, crucial data from China, Germany, and the US will be released. On Thursday, the US inflation data is expected, which could influence market sentiment and Federal Reserve rate decisions, according to Alex Volkov of VT Markets.

Market Outlook by Dharmesh Shah, Vice President, ICICI Securities:

Dharmesh Shah predicts that the Nifty 50 will continue its upward trend, potentially reaching 24,700 by July 2024. However, after a sharp 15% rise over the past five weeks, the market might take a brief pause, especially with the budget and earnings season approaching. Any dips should be seen as buying opportunities, with key support at 23,700. This positive outlook is supported by:

• Strong market breadth, with 86% of stocks trading above their 50-day EMA.
• A strong global market environment with minimal volatility expected.

Sector Outlook: BFSI, IT, Oil & Gas, Capital Goods, Infrastructure, Pharma, and PSU sectors are expected to perform well.

Bank Nifty Outlook: Bank Nifty may consolidate between 53,500-51,000 due to overbought conditions.

Stock Recommendations:

• State Bank of India (SBI): Buy in the range of ₹835-862, target of ₹965, with a stop loss at ₹788.
• Aditya Birla Fashion and Retail Ltd: Buy in the range of ₹320-330, target of ₹374, with a stop loss at ₹299.