Indian Stock Markets Stage Remarkable Recovery
Indian equity benchmark indices demonstrated remarkable resilience on Tuesday, bouncing back from early losses to finish the trading session with substantial gains. The recovery was primarily driven by increased buying activity in services and telecom stocks, coupled with positive sentiment surrounding an impending US-India trade agreement.
The trading day began on a cautious note with the Sensex opening 411.32 points lower at 83,124.03, representing a decline of 0.49%. Similarly, the broader Nifty 50 index fell by 125.1 points to 25,449.25 during early trading hours, reflecting the initial bearish sentiment.
What Fueled the Market Turnaround?
The dramatic reversal in market sentiment was largely attributed to optimistic comments from U.S. President Donald Trump, who indicated that a trade agreement with India is imminent. This development triggered significant buying interest in sectors that have substantial exposure to the American market.
Shrimp exporting companies and various textile firms that depend heavily on the U.S. market witnessed particularly strong gains throughout the trading session. The positive global cues, including the U.S. Senate passing a bill to end the longest federal shutdown in history, further bolstered investor confidence.
By the closing bell, the Nifty 50 had climbed 0.47% to settle at 25,694.95, while the Sensex gained 0.4% to reach 83,871.32. This impressive recovery showcased the underlying strength of the Indian markets despite initial concerns about the potential impact of the Delhi explosion.
Technical Analysis and Market Outlook
Rupak De, Senior Technical Analyst at LKP Securities, provided valuable insights into the technical positioning of the markets. He noted that the Nifty 50 experienced considerable fluctuations throughout the day before finishing with notable gains. The strong performance on Tuesday pushed the index back above the 21-day Exponential Moving Average (EMA) on the daily chart.
The Relative Strength Index (RSI) is approaching a bullish crossover, while the 21EMA and 50EMA have formed a positive crossover, indicating strengthening momentum. According to De, the short-term outlook appears promising for an upward move toward higher levels, with a potential target of 26,000. Support is now established at 25,600, with a stop loss recommended at the same level.
Vinod Nair, Head of Research at Geojit Investments Ltd, highlighted that the Q2 earnings season is approaching its conclusion and is anticipated to wrap up positively, aided by a stronger-than-expected performance from the broader market. The rally was bolstered by gains in the IT, automotive, metal, and FMCG sectors.
Investors are now looking forward to upcoming domestic inflation figures, with hopes of continued moderation driven by a consistent drop in food prices. This development heightens the likelihood of further policy easing by the Reserve Bank of India. Moving forward, earnings are projected to show a strong rebound in the third quarter, supported by various domestic advantages, although success will largely depend on the finalization of a trade agreement with the U.S.
Expert Stock Recommendations for Today
Market experts have identified eight promising stocks for intraday trading based on technical analysis:
Ashok Leyland Ltd: Sumeet Bagadia of Choice Broking recommends buying at ₹146 with a stop loss at ₹141 and target price of ₹156. The stock recently made an all-time high of ₹146.78 and has formed a rounding bottom pattern on daily charts.
National Aluminium Company Ltd (NALCO): Bagadia suggests buying at ₹265.66 with stop loss at ₹256 and target of ₹285. The stock maintains a strong upward trajectory with all key EMAs trending upwards.
Housing & Urban Development Corporation Ltd (HUDCO): Ganesh Dongre of Anand Rathi recommends buying at ₹230 with stop loss at ₹223 and target of ₹243. The stock exhibits strong bullish patterns with solid support established.
SBI Cards and Payment Services Ltd: Dongre suggests buying at ₹864 with stop loss at ₹845 and target of ₹895, noting the stock's continued bullish pattern.
Oil and Natural Gas Corporation Ltd (ONGC): Another recommendation from Dongre suggests buying at ₹249 with stop loss at ₹243 and target of ₹262.
Hero MotoCorp Ltd: Shiju Koothupalakkal of Prabhudas Lilladher recommends buying at ₹5,417 with target of ₹5,570 and stop loss at ₹5,340. The stock has shown recovery after forming a double bottom pattern.
VA Tech Wabag Ltd: Koothupalakkal suggests buying at ₹1,410 with target of ₹1,475 and stop loss at ₹1,375, noting the stock's breakout from consolidation.
Marksans Pharma Ltd: The final recommendation suggests buying at ₹193.90 with target of ₹204 and stop loss at ₹189, with the stock showing gradual recovery from bottom levels.
In corporate developments, shares of Tata Motors commercial vehicle segment will be listed on stock exchanges on November 12, according to a BSE notice. Tata Motors Commercial Vehicles will be available for trading on both BSE and NSE.
