Market Headstart: Experts see upside in Nifty, Sensex; focus on big earnings

Let’s look at the final tally on D-Street – the S&P BSE rose 59 points to 41,932 while the Nifty50 closed with gains of 12 points at 12,355 on January 16.

Experts are of the opinion that there is still more upside in Sensex and Nifty. And, investors should use dips to go long or buy quality stocks.

BNP Paribas is overweight on India and envisages BSE's Sensex to touch 44,500 level by the end of December 2020. Manishi Raychaudhuri, Asia Pacific Equity Strategist at BNP Paribas, feels that 2020 will be better than 2019.

Within BNP Paribas Asian Model Portfolio, the global financial player was overweight on banking and financial stocks with exposure to HDFC Bank, Kotak Mahindra Bank, Axis Bank, HDFC Ltd, and HDFC Life Insurance.

It also had exposure to HCL Technologies, Infosys, Bharti Airtel, Petronet LNG, GAIL and ITC.

Broader markets outperformed as the S&P BSE Smallcap, and Midcap indices rose 0.78-0.77 percent respectively. The Nifty Midcap index outperformed Nifty as it closed at a fresh 7-month high of 17,985, said a CNBC-TV18 report.

The Nifty Midcap Index gained for the 8th straight day to post the longest gaining streak in 18 months.

Some good news for commodity traders as SEBI has allowed the stock exchanges to launch options in goods in the commodity derivatives segment, as it put in place the product design and risk management framework.

Prior approval from Sebi will be required for the stock exchanges to start trading in options contracts with underlying goods.

The rupee fell by 11 paise to close at 70.93 against the US dollar on Thursday due to strengthening crude oil prices and dollar demand from importers.

On the institutional front, FPIs were net sellers in Indian markets for Rs 395 cr while the DIIs were net sellers to the tune of Rs 184 cr, provisional data showed.

Big News:

As many as 18 companies on the BSE will declare their results for the December quarter that include names like HCL Technologies, L&T Finance Holdings, L&T Tech Services, RIL, and TCS among others.

HCL Technologies: PAT likely to grow by nearly 9% YoY

RIL: PAT likely to grow by over 3% YoY

TCS: PAT likely to grow by over 2% YoY

(All estimates are from Motilal Oswal)

Stocks in the news:

Telecom stocks will be in focus after Supreme Court has rejected petitions by mobile operators including Bharti Airtel and Vodafone Idea seeking a review of its order late last year that they must pay the bulk of nearly $13 billion in dues to the government.

With the Supreme Court dismissing its review petition on AGR dues, telecom company Bharti Airtel on January 16 said it is disappointing, and evaluating options to file a curative petition in the matter.

Moody's Investors Service on January 16 downgraded YES Bank's Baseline Credit Assessment (BCA) and adjusted BCA to 'caa2' from 'b3' citing concerns on the standalone viability of the private lender as it struggles to raise capital.

Technical Recommendations:

We spoke to IndiaNivesh Securities and here's what they have to recommend:

Indian Bank | Buy | LTP: Rs 102.30 | Target: Rs 114 | Stop loss: Rs 96 | Upside: 11.44%

Phillips Carbon Black | Buy | LTP: Rs 136.60 | Target: Rs 152 | Stop loss: Rs 127 | Upside: 11.27%

Sadbhav Engineering | Buy | LTP: Rs 129.05 | Target: Rs 144 | Stop loss: Rs 122 | Upside: 11.58%

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