Indian equity benchmarks extended their decline for a third straight session on Wednesday, 7 January, as cautious investors weighed geopolitical tensions and potential US tariff hikes. The Nifty 50 closed at 26,140.75, down 0.14%, while the Sensex ended at 84,961.14, a fall of 0.12%. Despite the marginal dip, underlying market strength was visible, with the advance-decline ratio on the NSE showing a near balance at 1,578 advances to 1,551 declines.
MarketSmith India's Top Stock Picks for 8 January
Amid this environment of selective buying and sectoral churn, research platform MarketSmith India has identified two stocks for investors to consider on 8 January. The recommendations are based on a blend of fundamental strength and positive technical patterns.
Buy: Persistent Systems Ltd (CMP: ₹6,433)
MarketSmith India recommends buying Persistent Systems in the range of ₹6,420 to ₹6,480. The firm has set a target price of ₹7,100 over a two to three-month horizon, with a stop loss advised at ₹6,100. The recommendation is backed by the company's strong positioning in digital engineering and cloud services, consistent earnings growth, and healthy margins.
Key supporting factors include rising deal wins, an improving order pipeline, and a well-diversified client base across industries and geographies. The company also maintains a robust balance sheet with minimal debt. From a technical perspective, the stock is showing a cup-with-handle breakout pattern. Investors should note risk factors such as dependence on global IT spending, competitive pricing pressure, and currency volatility.
Buy: Torrent Pharmaceuticals Ltd (CMP: ₹4,086)
The second recommendation is to buy Torrent Pharmaceuticals between ₹4,070 and ₹4,100. The target for this pharma stock is ₹4,600 within two to three months, with a stop loss at ₹3,820. The rationale centers on Torrent's solid presence in high-growth chronic therapy segments and its history of consistent earnings and cash flow generation.
The company is witnessing improving growth in its India formulations business and boasts a healthy product pipeline with regular launches. Its balance sheet remains stable with manageable debt levels. Technically, the stock is exhibiting a flat base breakout. Potential risks involve pricing pressure in the US generics market, regulatory scrutiny from the US FDA, and rising input costs.
Sectoral Performance and Market Outlook
The market session on 7 January was marked by stark sectoral divergence. The Nifty IT index, gaining 1.87%, and Consumer Durables, up 1.69%, led the charge. Titan Company surged nearly 4% to a record high after a strong Q3 business update. Conversely, the Auto and Oil & Gas sectors faced selling pressure, declining 0.80% and 0.66% respectively. Cipla was a notable loser, dropping 4.28%.
The India VIX, a fear gauge, remained calm at 9.95, suggesting limited panic. MarketSmith's analysis indicates the market is likely to enter a phase of range-bound consolidation as attention turns to the upcoming Q3 earnings season. The broader technical structure for the Nifty 50 remains positive, with the index trading within a rising channel and above its key moving averages.
According to the O'Neil methodology followed by MarketSmith, the market status is a "Confirmed Uptrend." A sustained move above 26,300 could trigger the next rally leg towards 26,500-26,700. On the downside, 25,900 is the first key support level to watch.
Nifty Bank Performance
The banking index, Nifty Bank, closed 0.21% lower at 59,990.85, unable to hold above the 60,000 mark. Despite the dip, it defended its previous session's low and trades above all key moving averages, keeping the broader bullish structure intact. Momentum indicators like the RSI at 62.85 and a positive MACD confirm underlying strength. The outlook remains bullish as long as the index sustains above 59,700.
MarketSmith India is a stock research platform offering tools and advisory based on William J. O'Neil's CAN SLIM methodology. The views are those of the analyst and investors are advised to consult certified experts before making investment decisions.
