The Indian stock market concluded Monday's trading session in negative territory, with both major indices recording significant declines amid widespread sectoral weakness and investor caution.
Market Performance Overview
The benchmark Sensex dropped 331 points while the Nifty 50 finished at 25,959, declining by 108 points during the session. Most market sectors experienced selling pressure, with real estate, metals, and capital goods stocks showing particular vulnerability. However, IT stocks demonstrated relative stability and provided some support to the market.
Despite the day's decline, market experts emphasized that the indices remain near their all-time highs, suggesting the pullback primarily represents profit-taking rather than a fundamental shift in market sentiment.
Expert Analysis and Market Drivers
Vinod Nair, Head of Research at Geojit Investments, observed that after trading positively within a narrow range for most of the session, the market witnessed a sharp decline during the final half-hour. He attributed this movement to Monday's expiry and the Nifty 50's inability to maintain levels above the crucial 26,000 mark.
"Investor sentiment remained cautious ahead of significant event risks, including potential delays in concluding the interim trade agreement between the US and India," Nair stated. He added that selective purchasing in IT stocks offered some counterbalance to the broader market weakness.
On a positive note, Nair highlighted that global markets are showing optimism driven by renewed hopes for a Federal Reserve rate cut in December, fueled by concerns regarding U.S. employment data.
Abhinav Tiwari, Research Analyst at Bonanza, projected that future market movements will be heavily influenced by global developments and updates from central banks worldwide. He warned that sustained volatility might continue, with short-term pullbacks remaining a possibility.
Technical Outlook and Trading Strategy
Vatsal Bhuva, Technical Analyst at LKP Securities, provided a technical perspective, noting that the index has closed below its 50 EMA on the hourly chart and has fallen beneath the significant 26,000 support level near its 10-day EMA. This formation created a bearish candlestick pattern, indicating short-term weakness.
"If the index opens or closes beneath the 10-day EMA at 25,950, a further decline is probable, which could lead it towards the 20-day EMA situated at 25,850 levels," Bhuva explained. He identified 25,850 as the crucial support level and advised adopting a cautious approach if the index drops below this threshold, with resistance holding at 26,100.
Recommended Stocks for Tuesday
Market experts from leading brokerage firms have identified eight intraday stocks for consideration. The recommendations come from Sumeet Bagadia of Choice Broking, Ganesh Dongre of Anand Rathi, and Shiju Koothupalakkal of Prabhudas Lilladher.
Sumeet Bagadia's Selections
Federal Bank Ltd: Bagadia recommends buying at ₹248 with a stop-loss at ₹239 and target price of ₹266. He notes the stock is maintaining a strong upward trajectory with consistent higher highs and higher lows formation.
Tech Mahindra Ltd: Suggested buying at ₹1,495 with stop-loss at ₹1,443 and target of ₹1,600. The stock shows signs of trend reversal with a double-bottom pattern formation and bullish RSI divergence.
Ganesh Dongre's Picks
KEI Industries Ltd: Recommended purchase at ₹4,108 with stop-loss at ₹4,050 and target of ₹4,200, showing bullish reversal pattern.
Astra Microwave Products Ltd: Buy at ₹940 with stop-loss at ₹920 and target of ₹990, demonstrating reversal price action formation.
Astral Ltd: Suggested entry at ₹1,470 with stop-loss at ₹1,420 and target of ₹1,530, displaying bullish reversal pattern.
Shiju Koothupalakkal's Choices
TD Power Systems Ltd: Recommended buy at ₹762 with target of ₹805 and stop-loss of ₹744, showing strong run-up with support near 710 zone.
NOCIL Ltd: Buy at ₹174.85 with target of ₹182 and stop-loss of ₹171, demonstrating decent revival from support zone.
Sundram Fasteners Ltd: Suggested purchase at ₹987 with target of ₹1,040 and stop-loss of ₹965, indicating bullish candle pattern with significant volume participation.
Disclaimer: The views and recommendations above represent individual analysts' opinions and not of Mint. Investors should consult certified experts before making investment decisions.
