The Monetary Policy Committee (MPC) maintained the repo rate unchanged at 6.5 percent for the seventh time in a row on April 5. This was on expected lines as most economists and market experts feel the interest rate cut is likely to start only after similar action by the US Federal Reserve.
The US central bank indicated three rate cuts this year with experts expecting the first one around end of June or early second half of 2024.
The Reserve Bank of India also decided to remain focused on withdrawal of accommodation to ensure that inflation progressively aligns to the target of 4 percent within a band of +/- 2 percent, while supporting growth.
The domestic economy sees a strong momentum with growth in FY25 pegged at 7 percent with Q1FY25 at 7.1 percent, while the global economy showed resilience and is likely to maintain a steady growth in 2024, the RBI said.
With the hope of normal monsoon this year and continuing food price uncertainties along with rising oil prices (Brent crude futures traded at $91 a barrel, up 11 percent in last one month), geo-political tensions and volatility in financial markets, the central bank expects the CPI inflation at 4.9 percent in Q1FY25 and 3.8 percent in Q2FY25, while the last reading was 5.1 percent in January-February (softening from 5.7 percent in December 2023) and core inflation at 3.3 percent in February as against 3.6 percent in January.
"Projections of real GDP growth for FY24-25 at 7 percent and CPI inflation at 4.5 percent for the year along with strong manufacturing and services PMI numbers and healthy corporate and banking balance sheet instills confidence of the resilience of Indian economy," Raghvendra Nath, MD at Ladderup Wealth Management said, adding if rural demand strengthens and there are no adverse surprises in inflation from food or crude oil prices, private consumption is expected to rise, further aiding the growth trajectory.
However, he feels the timing and extent of rate cuts remain dependent on announcement by global central banks and the CPI aligning with RBI’s 4 percent target on a sustained basis.
The market turned volatile around 22,500 on the Nifty 50 as it seems to have priced in the non-event. Now, the all focus will be on the corporate earnings that will start next week, and in case the index gives a strong close above 22,600, then the further march towards 22,700-22,800 area is likely on cards, with support at 22,300, experts said.
"The RBI MPC meet has become a non-event for the market as everything was on expected lines with no new surprises," Sheersham Gupta, director and senior technical analyst at Rupeezy, said. He maintained a mild bullish stance for the Nifty, especially the financials, for the short to medium term.
On the upside, the immediate resistance for the Nifty stands at 22,600 and, if surpassed, the index may potentially reach levels around 22,750, he feels.
The rate-sensitive stocks were mixed with the Bank Nifty rising 0.4 percent and Realty index jumping 1.5 percent, but Auto was down third of a percent at the time of writing this article.
Moneycontrol collated a list of top 10 rate sensitive stocks from experts with a 3-4-week perspective. The stock price of April 4 is considered for the calculation of returns:
Expert: Jigar S Patel, senior manager - equity research at Anand Rathi
HDFC Bank: Buy | LTP: Rs 1,527.6 | Stop-Loss: Rs 1,465 | Target: Rs 1,620 | Return: 6 percent
Recently, HDFC Bank experienced a significant upward movement following a period of consolidation between Rs 1,400 and Rs 1,475 and is now trading above Rs 1,530. Moreover, the daily stochastic indicator has shown a bullish reversal from just above the oversold threshold of 25, indicating positive momentum.
This breakout is further supported by substantial trading volume. Additionally, the stock closed above the weekly R5 resistance camarilla Pivot (Rs 1,487.9), suggesting continued bullish sentiment. Consequently, we recommend traders/investors to consider buying within Rs 1,500-1,530 range, targeting Rs 1,620, with a stop-loss placed near Rs 1,465 on a daily closing basis.
AU Small Finance Bank: Buy | LTP: Rs 621 | Stop-Loss: Rs 568 | Target: Rs 720 | Return: 16 percent
AU Small Finance Bank reached a peak around Rs 813 on January 8, 2024, but then experienced a decline of approximately 32 percent. However, in the past two weeks, the stock has shown a significant recovery and is currently trading near Rs 620 mark, indicating a bullish sentiment.
On the indicator side, the weekly Scale Stochastics indicator has identified a "hidden Bull Divergence" close to its previous low point recorded on March 20, 2023 (as shown on the chart). This divergence suggests the possibility of upward momentum and indicates a potential bullish sentiment.
Therefore, investors may consider adding long positions in the range of Rs 600-625, with an upside target set at Rs 720. It's recommended to set a stop-loss near Rs 568 on a daily closing basis to manage risk.
Axis Bank: Buy | LTP: Rs 1,063 | Stop-Loss: Rs 1,025 | Target: Rs 1,130 | Return: 6 percent
Since peaking around Rs 1,130 mark on March 6, 2024, Axis Bank has undergone a significant downturn, experiencing a notable decline of approximately 9 percent. However, in the following six trading sessions, Axis Bank has shown resilience, avoiding further declines and instead consolidating within a range spanning from Rs 1,040 to Rs 1,080.
Interestingly, support is also evident near Rs 1,050 levels due to Fibonacci ratio clustering, and daily stochastics indicate a "hidden Bull Divergence," adding to the bullish sentiment in the stock (refer to the chart).
Therefore, investors may contemplate adding long positions within Rs 1,050-1,070 range, with an upside target set at Rs 1,130. To manage risk, it is advisable to set a stop-loss near Rs 1,025 on a daily closing basis.
Expert: Ashish Kyal, Founder and CEO of Waves Strategy Advisors
Canara Bank: Buy | LTP: Rs 607 | Stop-Loss: Rs 550 | Target: Rs 670 | Return: 10 percent
As shown on the below chart, Canara Bank have shown an excellent rise and prices are moving precisely within the upward sloping channel. We have identified the 50-day EMA (exponential moving average) which has successfully supported rallies in the past and dips towards this average have acted as a great buying opportunity as major lows have formed near this average.
So as long as price holds above it, the trend is likely to remain bullish. Support as per this is near Rs 550 levels. Along with this, MACD (moving average convergence divergence) has also shown bullish crossover which is acting as a double confirmation.
However, looking at the overall rise, buy on dips looks prudent strategy for better risk reward for the target of Rs 670 which is also a channel resistance as long as Rs 550 holds on the downside.
Godrej Properties: Buy | LTP: Rs 2,410 | Stop-Loss: Rs 2,195 | Target: Rs 3,150 | Return: 31 percent
In the previous session, Godrej Properties closed on a flat note. Stock is currently facing hurdle near previous swing high which is near Rs 2,540 levels. A decisive breakout above it can result into fresh rise in this stock.
Stock is following classic Elliott wave theory. Wherein, currently wave 5 of primary wave (3) is moving on the upside. As per guidelines wave 3 is considered as a strongest one. So further rise is expected in this stock once it breaches above Rs 2,540 level for the target of Rs 3,150 levels or higher. Key support is at Rs 2,195 levels.
LIC Housing Finance: Buy | LTP: Rs 644 | Stop-Loss: Rs 610 | Target: Rs 725 | Return: 13 percent
LIC Housing Finance is currently trading at important juncture. In previous session, there is minor rejection from the highs. Now acceptance back above Rs 661 followed by Rs 670 will indicate a strong positive breakout which will open the targets for Rs 725 levels.
Since March 21 not a single candle has given closed below previous day's low which keeps overall tone on the positive side. ADX (average directional index) is showing readings of 27 suggesting that momentum is picking up.
So, a breach above Rs 670 resistance level is must for further bullish momentum to continue with the target of Rs 725 level as long as Rs 610 holds on the downside.
Expert: Vidnyan Sawant, HOD - Research at GEPL Capital
City Union Bank: Buy | LTP: Rs 154 | Stop-Loss: Rs 143 | Target: Rs 177 | Return: 15 percent
The City Union Bank weekly chart reveals a consolidation phase, with recent indications of a turnaround from a support zone, potentially marking a sustained reversal. This reversal is supported by increased volume participation, evident from the surge above the crucial 21-week average.
On the daily scale, the stock is establishing higher highs and higher lows, delineating a short-term uptrend that aligns with the broader timeframe.
Furthermore, City Union Bank is currently maintaining levels above key moving averages such as the 12-week and 26-week EMAs, signaling a trend improvement. The RSI above 60 and bullish crossovers further underscore the positive momentum.
Looking ahead, it's reasonable to anticipate continued upward movement in the stock, with a potential target price of Rs 177. It's advisable to set a stop-loss at Rs 143 on a closing basis to manage risk effectively.
Jana Small Finance Bank: Buy | LTP: Rs 467 | Stop-Loss: Rs 430 | Target: Rs 542 | Return: 16 percent
JSFB (Jana Small Finance Bank) is displaying a consistent pattern of higher highs and higher lows on the daily scale, indicating strong momentum and forming an IPO base as it approaches its all-time high.
Following a reversal candlestick on the weekly scale, the stock experienced a significant turnaround, reflecting positive sentiment and maintaining levels above the 12-day exponential moving average, signifying an improvement in trend.
Moreover, on the weekly timeframe, JSFB has demonstrated rapid retracement, with a four-week downtrend (from Rs 466 to Rs 368) being reversed in just two weeks, underscoring robust price action and signaling a potential upward trajectory.
Looking ahead, it is reasonable to anticipate that the upward movement will continue, potentially reaching Rs 542 level. It is advisable to set a stop-loss at Rs 430 on a closing basis to manage risk.
State Bank of India: Buy | LTP: Rs 759 | Stop-Loss: Rs 700 | Target: Rs 900 | Return: 19 percent
Since June 2020, SBI has demonstrated a strong price structure characterized by a rising trend. On the monthly scale, bullish price action has been evident, with the stock forming a Rally Base Rally pattern. Notably, in the prior month, a Doji candlestick has formed, suggesting a base, and indicating a potential rally ahead according to this price action pattern. On the weekly scale, February 2024 have shown polarity followed by impulse momentum, signaling a continuation of the upward trajectory.
SBI has consistently traded above important averages such as the 12-week and 26-week moving averages, indicating a positive trend. Additionally, the MACD study shows increasing values in the positive territory, further reinforcing the bullish momentum.
Furthermore, on the ratio chart of SBI against Nifty, polarity observed from the 2022 swing indicates a continuation of its outperformance.
Going ahead, we expect the prices to go higher till the level of Rs 900. The bullish view will be negated if we see prices sustaining below Rs 700 level.
Expert: Nagaraj Shetti, senior technical research analyst at HDFC Securities
HUDCO: Buy | LTP: Rs 207 | Stop-Loss: Rs 193 | Target: Rs 230 | Return: 11 percent
The weekly timeframe chart of this Housing & Urban Development Corporation (HUDCO) indicates sharp upside bounce so far this week. After shifting in to a downward correction amidst larger range movement in the last couple of months, the stock price is currently in an attempt of decisive upside breakout of the said range around Rs 202-205 levels.
The stock price on the smaller timeframe has moved above the hurdle of down sloping trend line around Rs 198-200 levels. The volume has started to expand during upside breakout in the stock price and weekly 14 period RSI (relative strength index) shows positive indication.
Buying can be initiated in HUDCO at CMP (Rs 207.15), add more on dips down to Rs 200, wait for the upside target of Rs 230 in the next 2-3 weeks. Place a stoploss of Rs 193.
Indiabulls Real Estate: Buy | LTP: Rs 135.55 | Stop-Loss: Rs 125 | Target: Rs 149 | Return: 10 percent
After showing a downward correction with high volatility in the last 5-6 weeks, the real estate stock - Indiabulls Real Estate - has witnessed a sharp upmove so far this week. The bullish chart pattern like higher tops and bottoms is intact as per weekly timeframe chart and present upmove in the stock price could be in line with new higher top of the sequence.
Weekly 10 and 20 period EMAs (exponential moving average) are intact and they have been offering supports during minor dips in the stock price over the period of time. Weekly 14 period RSI has turned up above crucial upper 60 levels and the volume has started to expand during upside breakout in the stock price. This is positive indication and signal more upside for the stock price in the near term.
One may look to buy Indiabulls Real Estate at CMP (Rs 135.55), add more on dips down to Rs 129 and wait for the upside target of Rs 149 in the next 2-3 weeks. Place a stop-loss of Rs 125.
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.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
