Stocks to buy or sell: Dharmesh Shah of ICICI Securities suggests buying Bharat Dynamics on 15 April 2025
Stock market news: Indian stock indices finished significantly higher on Friday, bolstered by Trump’s announcement to pause reciprocal tariffs on numerous countries, including India, for a period of 90 days.
The Sensex closed at 75,157.26 points, gaining 1,310.11 points or 1.77 percent, while the Nifty 50 ended at 22,828.55 points, up 429.40 points or 1.92 percent. On Friday, the Nifty metal, consumer durables, and oil and gas sectors were the standout performers among the sectoral indices.
According to executive orders from the White House, the US has announced a suspension of additional tariffs on India for 90 days until July 9 this year. On April 2, US President Donald Trump imposed universal duties on approximately 60 countries exporting to America and steep additional tariffs on countries like India, which could affect sales ranging from shrimp to steel in the largest economy in the world.
Market analysts noted that during the week, the Nifty 50 reached an intra-week low of 21,743.65 before recovering sharply. Among sector indices, real estate was the biggest underperformer, while FMCG stocks showed strong performance. Global market sentiment was weighed down after President Trump announced significant tariff increases. In retaliation, China applied tariffs of up to 125% on US goods, leading the US to further escalate duties to 145%. Some relief appeared when the US granted a 90-day tariff reprieve to its trading partners, excluding China. In the bond market, the yield on US 10-year Treasuries surged by 11.55% to 4.462%, while the US dollar index dropped 2.72%, falling below the 100 mark.
Puneet Singhania, Director at Master Trust Group, pointed out that the coming week is expected to be volatile for both global and Indian markets, as the trade conflict between China and the US intensified, with both nations imposing tariffs on each other, causing disturbance in the markets. Domestically, the WPI data and inflation figures are set to be released, along with information on foreign exchange reserves and passenger vehicle sales. On the global front, significant macroeconomic data from the US, UK, and China is scheduled for release.
Market Outlook by Dharmesh Shah, Vice President, ICICI Securities
- Nifty 50 staged a strong rebound tracking Trump’s announcement of 90 days pause on Tariff. Consequently, Nifty 50 recouped 5% from week’s low despite gap down opening and settled the week on a flat note at 22,900. Sectorally, FMCG outshone while Realty and Metal underperformed. The weekly price action formed a sizable bull candle carrying lower high-low, indicating buying demand emerged from 21,900 levels.
- Amidst recent elevated global volatility, Nifty 50 has managed to defend the key support of 21,900, which has been held on multiple occasions (on a closing basis) over past one year. The current strong recovery supported by positive divergence on the weekly chart, indicates that bottom is in place. With current structural improvement we believe index has undergone a base formation while absorbing host of negative news and set the stage for next leg of up move towards 24,000 in coming weeks. Hence, focus should be on accumulating quality stocks to build a medium-term portfolio onset of Q4 earning season.
- Since 2002, within a structural bull market, price wise maximum intermediate corrections have typically been to the tune of 18% (barring 2004 & 2006). Meanwhile, time wise such corrections last for average 8-9 months. In current scenario, we believe index is approaching price and time wise correction as index has already corrected 17% over past seven months. Historically, buying in such scenario has been rewarding, delivering an average return of 23% over the subsequent twelve months.
- Our positive bias is further validated by following observations:
a) While sailing through the global volatility, Banking index managed to hold March lows and now forming a higher base, highlighting relative outperformance that bodes well for next leg of up move towards 53,200
b) Market Breadth: The market breadth has been witnessing positive divergence as Nifty 500 has formed a lower low while % of stocks above 200 days SMA has formed a higher low as currently 15% stocks (Nifty 500 Universe) are above 200 days SMA compared to last month reading of 7%
c) The US Dollar index is on the verge of breakdown from two years low of 99.50
d)Brent crude oil is hovering around 63 after bouncing from 58 levels
e) S&P 500 VIX witnessed sharp decline after recording high of 60, indicating anxiety around tariff uncertainty would settle down soon
5. Mirroring the benchmark move, Nifty midcap and small cap indices have staged a strong
rebound after retesting multi-year resistance trend line. Historically, maximum average correction in Midcap and small cap indices have been to the tune of 27% and 29% while time wise such correction lasted for 5 months. Subsequently, both indices have seen 28% returns in next six months
6. We expect volatility to prevail amid ongoing global uncertainty that makes us retain support base at 21,900 as it is Mar-25 low of 21,965
Stock To Buy This Week – Dharmesh Shah
Dharmesh Shah of ICICI Securities recommends Bharat Dynamics.
Buy Bharat Dynamics in the range of ₹1,270-1,320 for the target of ₹1,455 with a stop loss of ₹1,207.
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 11/04/2025 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.
