After a day of breather, bulls returned at full throttle to rule the Street on December 8, sending not just the Nifty to 21,000 zone, but also Bank Nifty to an uncharted territory, as the Monetary Policy Committee toed the expected lines in maintaining the policy rate unchanged and raised its forecast for economic growth for FY24.
The BSE Sensex jumped 174 points to 69,696, while the Nifty50 eased from the much-awaited 21,000 level to trade 20 points up at 20,921 around 1:15pm. The Bank Nifty hit an intraday record high of 47,170, and was trading at 46,944, up 103 points, while Nifty Realty, Nifty Midcap 100, Nifty Smallcap 100, and Nifty 500 too touched their all-time highs.
The MPC on December 8 kept the repo rate unchanged at 6.5 percent for the fifth time, considering the drop in retail inflation to 4.9 percent in October, though it still stayed above its long-term target of 4 percent, and on the back of strong economic growth conditions. The central bank retained its full-year inflation forecast at 5.4 percent.
"It is more of a balanced view or neutral stance as compared to inflation focussed commentary earlier," Gaurav Dua, head of capital market strategy at Sharekhan by BNP Paribas, said. He remains positive on equity markets in the near-to-medium term.
Read: Governor Das's optimism is a double-edged sword for markets
The RBI remained focused on withdrawal of accommodation to ensure that inflation progressively aligns to the target, while supporting growth. The real GDP growth forecast for FY24 has been raised to 7 percent, from 6.5 percent earlier, after better-than-expected growth of 7.6 percent in Q2FY24 along with expanding manufacturing PMI and healthy growth in eight core industries.
Also read: RBI holds rate steady: Here's what bankers, economists, analysts have to say
Experts feel the central bank seems to be following other central banks and indicating higher rates for longer duration, but by any chance if the Federal Reserve cuts the Fed funds rate in first quarter of the calendar year, which is 60 percent probability and there is 80 percent probability of cutting in second quarter, then the RBI may also do the same here.
"The RBI's stance echoes the global trend of central banks signalling an enduring period of higher rates, further emphasising the need for a cautious-yet-progressive approach in navigating the financial landscape," Raghvendra Nath, MD at Ladderup Wealth Management, said.
Hitesh Jain, strategist for institutional equities research at Yes Securities, echoes Nath. "Given that there is a clear consensus of a reversal of the monetary policy action by the Fed and if it cuts the interest rates in March, we fancy a rate cut by the RBI in April, when compared with the consensus of a cut in Q2 FY25," he said.
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Moneycontrol collated 11 rate sensitive stocks for the market participants which can give healthy return in the next 3-4 weeks. The targets are based on the closing price of December 7.
Jigar S Patel, Senior Manager - Equity Research at Anand Rathi
Godrej Properties: Buy | LTP: Rs 1,936 | Stop-Loss: Rs 1,760 | Target: Rs 2,200 | Return: 14 percent
In the monthly time frame, the counter has taken perfect support on the Ichimoku cloud, and then it took out its previous swing high and is currently placed near Rs 1,935 mark. On the indicator front, both daily RSI (relative strength index) and DMI’s (directional movement index) are displaying positive bias in the counter.
Also read: Quick view | Why did the MPC opt for a status quo today?
Thus, one can buy a small tranche in the zone of Rs 1,900–1,940 and another in the zone of Rs 1,855–1,880 for an upside target of Rs 2,200, and the stop-loss would be placed near Rs 1,760 on a daily close basis.
Maruti Suzuki India: Buy | LTP: Rs 10,697 | Stop-Loss: Rs 9,995 | Target: Rs 11,550 | Return: 8 percent
After consolidating for over five years, Maruti finally managed to break out from the psychological hurdle of Rs 10,000. The breakout was accompanied by humongous volumes and hence looked genuine.
The theoretical long-term target for the breakout seems to be over Rs 13,000 from here on. Thus, traders are advised to buy the stock in the range of Rs 10,400-10,700 with a stop-loss of Rs 9,995 on a closing basis for an upside target of Rs 11,550.
Kotak Mahindra Bank: Buy | LTP: Rs 1,827 | Stop-Loss: Rs 1,785 | Target: Rs 1,900 | Return: 4 percent
On the daily time frame, the inverse head-and-shoulder pattern is seen after a decent consolidation between 1,700 and 1,790. At the current juncture, it is placed above the mentioned zone. On the indicator front, both daily RSI and DMI’s are displaying positive bias in the counter. Thus, one can buy in the zone of 1815–1830 with an upside target of 1900, and the stop-loss would be placed near 1785 on a daily close basis.
Vidnyan Sawant, Designation, HOD - Research at GEPL Capital
Union Bank of India: Buy | LTP: Rs 116.60 | Stop-Loss: Rs 104 | Target: Rs 145 | Return: 24 percent
Union Bank is in rising structure forming higher top and higher bottom & trading at his 52-week high showcase strong momentum. This upward trajectory is bolstered by the stock breakout of the multi-year high their after strong volumes buildups were observed denotes positive development that lead the stock to rally.
Additionally, the relative strength index (RSI) is consistently above the 60 mark on both daily and weekly scales. The RSI is ascending alongside its key averages of 12-week and 26-week EMAs, emphasizing the stock's strong positive momentum.
Looking ahead, it's reasonable to anticipate continued upward movement in the stock, with a potential target price of Rs 145. It's advisable to set a stop-loss at Rs 104 on a closing basis to manage risk effectively.
LIC Housing Finance: Buy | LTP: Rs 518.70 | Stop-Loss: Rs 490 | Target: Rs 585 | Return: 13 percent
LIC Housing Finance is currently riding a clear uptrend, forming distinct higher highs and higher lows, and has surged by 70 percent from its March 2023 low, showcasing robust momentum.
The stock has witnessed a multi-year high breakout connecting the highs from 2018 – 2021 that denotes the stock is ready to ride its upward path.
The stock is consistently rebounding from support levels defined by the 12- week exponential moving averages (EMA). This suggests that there is strong support for the stock at these levels, adding to the bullish sentiment. The RSI has remained above 60 on various time frames, including daily, weekly, and monthly. This consistent RSI reading above 60 indicates strong positive momentum in the stock.
It is reasonable to anticipate that the upward movement will continue, potentially reaching Rs 585 levels. It is advisable to set a stop-loss at Rs 490 on a closing basis to manage risk.
Jio Financial Services: Buy | LTP: Rs 249.15 | Stop-Loss: Rs 230 | Target: Rs 295 | Return: 18 percent
Jio Financial is currently in an upward trend, demonstrating a 20 percent gain from its October 2023 low of Rs 204.65, indicative of a notable momentum pickup.
The stock is presently consolidating in a base formation with substantial volume accumulation.
Jio Financial is trading above crucial moving averages such as the 12-day and 26-day EMAs, providing additional confirmation of the prevailing uptrend.
It is reasonable to anticipate that the stock's price will continue to ascend, potentially reaching Rs 295 levels. To manage risk, it is advisable to implement a stop-loss strategy at Rs 230 on a closing basis.
Om Mehra, technical analyst at SAMCO Securities
Federal Bank: Buy | LTP: Rs 154.65 | Stop-Loss: Rs 148.5 | Target: Rs 168 | Return: 9 percent
The stock has established a consistent pattern of higher highs and higher lows, maintaining a bullish trajectory. Currently the stock is trading above the 20 and 50-day moving averages, it reflects sustained strength.
In the weekly timeframe, the once-resistance-turned-support at Rs 150 adds robustness. The stock is on verge of breakout of upper drawn trendline.
Hence, based on the above technical structure one can initiate a long position at CMP (current market price) Rs 154.6. However, on the safer side, it is advised to enter the counter near Rs 152-153 levels, for a target price of Rs 168. Stop-loss can be kept as Rs 148.5.
AU Small Finance Bank: Buy | LTP: Rs 751 | Stop-Loss: Rs 720 | Target: Rs 800 | Return: 6.5 percent
After forming an Inverse head and shoulder pattern, the stock is currently trading sideways. Holding steadfast at Rs 750 levels, accompanied by notable volumes, signals a sustained trend.
Noteworthy bullish signals include the 20-day moving average crossing above the 50-day, bolstering the bullish confirmation. With the RSI comfortably above the 60-level mark, and a positive crossover in the MACD (moving average convergence divergence) as well, will aid the uptrend in the stock going ahead.
Hence, based on the above technical structure, one can initiate a long position at Rs 751, for the target price of Rs 800, and stop-loss at Rs 720.
SBI Cards and Payment Services: Buy | LTP: Rs 767.5 | Stop-Loss: Rs 745 | Target: Rs 820 | Return: 7 percent
After substantial consolidation, the stock has managed to surpass its prior resistance level of Rs 760. Sustaining above a previously observed falling trend-line, it signals a confirmed bullish trend.
Strengthening this outlook, the stock's ascent is accompanied by robust volume, indicating strength. Additionally, a bullish "Rising Three Methods" candlestick pattern on the weekly chart adds credence to the potential for continued upward momentum.
Hence, based on the above technical structure, one can initiate a long position at Rs 767.5, for a target price of Rs 820, and stop-loss at Rs 745.
Riyank Arora, technical analyst at Mehta Equities
Punjab National Bank: Buy | LTP: Rs 86.8 | Stop-Loss: Rs 80 | Target: Rs 95 | Return: 9.5 percent
The stock has given a good breakout above its crucial resistance zone of Rs 83 to 84. With the price continuously moving in a higher high - higher low formation and a good spike in volumes, the overall trend looks extremely strong and positive for an up-move towards Rs 95 in the near term, with a stop-loss at Rs 80 mark.
Eicher Motors: Buy | LTP: Rs 4091 | Stop-Loss: Rs 3,950 | Target: Rs 4,400 | Return: 7.5 percent
The stock is trading well above its anchor - VWAP (volume weighted average price) support zone of Rs 4,014 to Rs 4,025. Any pull-back towards this zone should offer a good buy opportunity with a set stop-loss slightly below Rs 3,950 mark.
The stock has also given a good breakout above the trendline which is drawn connecting its previous swing highs in the chart depicted above. With the overall trend looking positive, the stock looks poised for good gains in the coming few days.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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