The Indian stock market saw a sharp reversal on Friday, January 17, with the benchmark Nifty 50 index closing lower by nearly half a percent. This marked the end of a three-day winning streak, as select banking and IT stocks such as Infosys, ICICI Bank, Axis Bank, HDFC Bank, and TCS dragged the index lower. The continued foreign capital outflow, amid weaker-than-expected Q3 earnings results and heightened caution ahead of the upcoming Union Budget, continued to weigh on market sentiment.
Foreign Institutional Investors (FIIs) have sold off Indian equities worth over ₹46,500 crore so far in January, contributing to the bearish sentiment. Analysts believe that for the market sentiment to turn positive, the Nifty needs to break and sustain above the crucial 23,500-level. Until then, uncertainty is expected to persist.
The ongoing Q3 earnings season has further contributed to the cautious mood. Several companies have reported disappointing numbers, particularly in the banking and IT sectors, leading investors to rethink their positions. With the upcoming Union Budget on February 1, there is increased uncertainty regarding fiscal policies and potential government measures, adding to investor caution.
Amidst the market volatility, technical analysts are suggesting that investors focus on stock selection rather than broad market plays. According to analysts, betting on fundamentally strong stocks with solid technical charts is advisable in the current market environment.
For traders looking for potential opportunities on Monday, some stocks have been highlighted for buying:
IRB Infrastructure Developers is suggested for purchase at ₹54.89, with a target price of ₹59 and a stop loss at ₹53.
Sagardeep Alloys is another stock to watch, with a buy recommendation at ₹33.91, a target price of ₹36.5, and a stop loss at ₹32.5.
Medico Remedies is also recommended for buying at ₹65.52, with a target of ₹70 and a stop loss at ₹63. Lastly,
Lloyds Engineering Works is suggested for a buy at ₹83.72, with a target price of ₹90 and a stop loss at ₹80.
As the market continues to navigate through challenges, stock-specific strategies may prove to be more rewarding than attempting to track broader market movements.
