The Indian stock market is expected to remain cautious in the short term due to various factors, including the upcoming swearing-in ceremony of US President Donald Trump, moderate expectations for Q3 earnings, and continued foreign institutional investor outflows. Analysts believe that Trump’s inaugural address and initial executive orders will set the stage for his policy actions and may impact market sentiment. Last week, the Nifty 50 and Sensex closed lower, indicating ongoing volatility.
The Nifty 50 ended at 23,203.20 points, down 108.60 points or 0.47%, while the Sensex closed at 76,619.33 points, down 423.49 points or 0.55%. The Nifty IT sector experienced the most significant decline at 2.68%. Despite the recent losses, Dharmesh Shah of ICICI Securities maintains a constructive view of the market.
He believes that the Nifty 50 is approaching Trump’s inauguration event on a lighter note and could witness a pre-budget rally once the anxiety around the event settles down.
Trump’s impact on market sentiment
Shah expects the index to regain upward momentum and gradually reach 24,200 in the coming month. This represents a 61.8% retracement of the Dec-Jan decline (24,857-23,047).
However, Shah cautions that the move towards 24,200 would not be linear due to elevated volatility during the Q3FY25 earnings season. Key support for the Nifty 50 is placed at 22,500. Shah remains constructive in sectors such as BFSI, IT, oil and gas, capital goods, and infrastructure and also sees favorable risk-reward setups in metals and PSU stocks.
This week, several significant firms are set to announce their corporate earnings, including Dixon Technologies, L&T Finance, Oberoi Realty, Tata Technologies, Dalmia Bharat, Polycab India, Persistent Systems, HDFC Bank, Tata Communications, Coforge, Hindustan Unilever, Bharat Petroleum Corporation, UltraTech Cement, Mphasis, Indus Towers, and Dr. Reddy’s Laboratories. For today, January 20, 2025, Dharmesh Shah recommends explicitly buying shares of Hindustan Aeronautics Ltd (HAL) with a target of 4,685 and Titan with a target of 3,830 while advising appropriate stop losses to manage risks.
As always, investors are advised to consult certified experts before making investment decisions, as the views and recommendations expressed are those of individual analysts and broking companies.