Indian Stock Markets Pause After Three-Day Rally
India's stock market indices showed minimal movement on Thursday following three consecutive sessions of gains totaling 1.5%, as investors adopted a cautious stance ahead of crucial election results from the politically significant northern state of Bihar. The election outcome is expected to have substantial implications for government policy direction.
The benchmark Sensex declined by 205.08 points to settle at 84,261.43 during early trading hours, while the Nifty 50 index dropped by 61.15 points to reach 25,814.65. This sideways movement represents a consolidation phase after recent bullish momentum.
Market Sentiment and Global Factors
Several positive factors have contributed to the overall optimistic market outlook. The cooling of domestic inflation figures and reduced trade concerns have bolstered investor confidence. Additionally, the resolution of the U.S. government shutdown has redirected global investor attention toward postponed economic data from the United States, which will play a crucial role in assessing future interest rate forecasts.
Despite these favorable conditions, market experts anticipate only minor fluctuations in domestic stocks as trading activity consolidates around current levels. All eyes remain firmly fixed on the Bihar election results scheduled for announcement on Friday, which could significantly influence market direction in the coming sessions.
Technical Analysis and Market Outlook
According to Osho Krishan, Senior Analyst of Technical & Derivatives at Angel One, Indian equity markets displayed robust performance in recent sessions, driven by positive reactions to exit polls and renewed trade discussions. The benchmark index opened with a significant gap-up and maintained upward momentum throughout the previous trading day, closing favorably with the Nifty 50 approaching the 25,900 zone and registering a 0.70 percent gain.
Krishan noted that substantial traction across various sectors, predominantly favoring bullish sentiment, indicates an overall positive market environment and has initiated renewed momentum. From a technical perspective, a positive crossover in the RSI on the daily chart suggests potential continuation of the primary trend following the consolidation period.
On technical levels, the bullish gap positioned around 25,780-25,715 is expected to provide support against potential near-term declines. This support is further reinforced by the critical zone of 25,600-25,500. Conversely, intermediate resistance is observed around the psychological barrier of 26,000. A breakthrough above this resistance level could push the benchmark toward lifetime highs in upcoming sessions.
"The market exhibits strong bullish sentiment, and any declines toward the mentioned support areas are likely to present favorable opportunities for bulls on Dalal Street," Krishan stated.
Expert Recommendations and Stock Picks
Angel One maintains an optimistic market outlook and advocates a 'buying on dips' strategy. The increased participation and breakout observed in the Midcap index are expected to generate broader opportunities for traders, though careful assessment of market momentum remains essential.
For Thursday's trading session, Osho Krishan recommended two stocks:
Berger Paints India Ltd: The stock has demonstrated significant resurgence following an extended consolidation period on daily charts. Increased trading volumes and favorable technical indicators support this upward trajectory. The stock's movement above the cluster of EMAs and the 200-day SMA enhances its bullish outlook. The RSI has indicated a positive crossover as the stock surpassed the 20-day EMA. Recommendation: BUY around ₹550-540 with Stop Loss of ₹520 and Target of ₹600.
Hyundai Motor India Ltd: After notable decline from its peak value of ₹2890, the stock is exhibiting stability at lower ranges. Analysis indicates buying momentum near the 100-DEMA, while the 14-period RSI suggests potential counter-trend movement. A positive crossover between MACD and its signal line contributes to bullish outlook. Recommendation: BUY around ₹2,380-2,360 with Stop Loss of ₹2,265 and Target of ₹2,550-2,590.
Market participants are advised to monitor developments in trade negotiations closely, as these could significantly influence market direction in the near term.
