Stocks to buy or sell: Dharmesh Shah of ICICI Securities suggests buying Kotak Bank, Tata Power tomorrow – 10 March 2025

Stock Market news: The major domestic indices, Nifty 50 and Sensex, concluded Friday’s trading session close to flatline amid varying global signals.

By the end of the trading day, the Nifty 50 had gained 7.80 points or 0.03% to reach 22,552.50, while the Sensex saw a decline of 7.51 points or 0.01% to settle at 74,332.58.

Last week, the Nifty 50 experienced an increase of roughly 1.9%, marking its best performance in three months, while the Sensex achieved a 1.6% gain, recording its highest weekly increase since late January.

Puneet Singhania, Director at Master Trust Group, pointed out that the rebound was mainly fueled by short covering as the indices neared key support levels, leading traders to close their bearish positions. The broader market demonstrated strength, with the Small-cap and Mid-cap indices rising around 5.5% and 2.6%, respectively. Among the sectors, the metal index stood out as the leading performer. Additionally, changes in global markets affected investor sentiment.

US President Donald Trump declared a temporary one-month exemption on the proposed 25% tariffs for auto imports from Mexico and Canada, adding to market fluctuations. Furthermore, a notable drop in the US dollar index, decreasing crude oil prices, and a strengthened Indian rupee against the dollar further bolstered equities.

On the institutional side, Foreign Institutional Investors (FIIs) reported net outflows of ₹15,501 crore in the cash segment, while Domestic Institutional Investors (DIIs) contributed ₹20,950 crore, helping maintain market stability.

Market Outlook by Dharmesh Shah, Vice President, ICICI Securities

1. Equity Benchmark snapped three weeks losing streak and settled the week at 22,552, up 1.9% (strongest weekly gains in CY25) amidst tariff related volatility. Broader market relatively outperformed as supportive efforts emerged from oversold territory. Sectorally, Metal remained outlier tracking decline in US dollar index while sharp pullback witnessed in beaten down PSU, Power stocks
2. The index has resolved out of four weeks falling trend line, indicating pause in downward momentum that makes us believe, index would continue the ongoing technical pullback towards 23,000 marks in the upcoming truncated week. In the process, volatility would prevail tracking tariff related development coupled with US as well as domestic inflation print. Eventually, we expect index to undergo base formation above the key support of long-term rising trend line that coincided with 100 Weeks EMA. Hence, focus should be on accumulating quality stocks with strong earnings as strong support is placed at 21,800.

Our constructive bias is further validated by following observations:

a. Past three decades data suggest that average drawdown below 52 weeks EMA is 6-7%. Post which index witness >20% returns in subsequent 12 months. Currently, index is ~6% down from 52 weeks EMA

b. The Momentum as well as sentiment indicators are poised at bearish extremes, suggesting impending pullback

c. Mirroring the Trump phase I (in 2017), US dollar index has topped out in January and now breached the Dec-24 low of 105. Declining dollar index augurs well for emerging markets

d. The US 10 Year bond yields has been declining and now hovering around 4.2 mark, indicating corrective bias

e. Brent Crude is poised at lower band of past 2 years consolidation placed at 69. Breakdown would boost the sentiment in the domestic market

f. Globally, DAX index clocked a fresh All-time high while Hangseng index surpassed two years high

g. Volatility has been dwindling as VIX is trading at 13.6 levels, indicating low risk perception from market participants

3. On the broader market front, the Midcap and Small cap indices staged a decent recovery from the decade-long trendline (Adjoining Jan 08 high and Oct 21 high) coupled with a positive divergence of the RSI, suggesting that the midcap index could witness extended pullback. Hence, the focus should be on accumulating quality stocks (backed by strong earnings) in a staggered manner.

4. Structurally, after five-months 16% decline, index has now approached the long-term rising trendline (drawn adjoining Jun 22 low and Mar 23 low) amid oversold conditions. The formation of a lower high-low signifies overall corrective bias, wherein strong support is placed around the 21,800-zone being confluence of following observations:

a. 61.80% retracement of the Oct-23 and Sept-24 rally (18,837-26,227)

b. A rising trendline drawn adjoining subsequent major lows off Jun-22 (15,183) is placed at 22,000.

c. The 24-month EMA support is placed in the vicinity of 22,000.

Stock To Buy This Week – Dharmesh Shah

Dharmesh Shah of ICICI Securities recommends buying Kotak Mahindra Bank, and Tata Power this week.

1) Buy Kotak Mahindra Bank in the range of ₹1,870-1,932 for the target of ₹2,120 with a stop loss of ₹1,789.

2) Buy Tata Power in the range of ₹346-357 for the target of ₹398 with a stop loss of ₹324.

Disclaimer: The Research Analyst or his relatives or I-Sec do not have actual/beneficial ownership of 1% or more securities of the subject company, at the end of 07/03/2025 or have no other financial interest and do not have any material conflict of interest.

The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.