Stock market news: The domestic equity market benchmark indices, Sensex and Nifty 50, saw a minor uptick on Friday, ending off day’s high, as investors resorted to profit-booking at higher levels. Optimism surrounding a potential India-US trade deal, record high April GST collection, and continuous inflow of foreign funds, was offset by potential geopolitical tensions brewing between India and Pakistan.

The 30-share BSE Sensex trimmed most of the intraday gains to settle 259.75 points, or 0.32%, higher at 80,501.99. During the day, the benchmark jumped 935.69 points or 1.16% to 81,177.93. The NSE Nifty 50 closed 12.50 points, or 0.05%, higher at 24,346.70 amid high volatility.

Positive global market cues also supported the Indian stock market, however, cautiousness on the domestic front weighed on the sentiment.

Dharmesh Shah, Vice President at ICICI Securities, expects a possibility of knee-jerk reaction on escalation of geopolitical worries, but advises investors not to panic but rather build quality portfolios from medium to long term perspective amid ongoing Q4 results season.

Shah has recommended one stock to buy for short-term. Here’s what he expects from Indian stock market next week, along with his stock recommendation.

Market Outlook by Dharmesh Shah, Vice President, ICICI Securities

1. Equity benchmark witnessed a lacklustre week amid stock specific action and settled the truncated week with marginal gains. In line with our expectation, the Nifty 50 index witnessed stiff resistance around 24,500 on multiple occasion in current week, indicating profit booking at higher levels. However, the index relatively outperformed the Broader market as it gained 1.2%. Meanwhile, beaten down Infra & Realty index witnessed pickup activity where it gained, 2.3% and 2.6% respectively for the week.

2. The weekly price action resulted in a small bull candle with long upper shadow, indicating prolonged consolidation after recent sharp up move. However, formation of higher high- low signifies that broader uptrend remains intact. Additionally, the ratio chart of Nifty 50/Nifty Midcap witnessed falling trendline breakout suggesting the benchmark to continue its outperformance.

3. In the upcoming week, we expect volatility to remain elevated tracking geopolitical worries wherein Nifty 50 is likely to consolidate in the broader range of 24,500-23,500 zone and witness stock specific amid earning season. On the oscillator front, the weekly stochastic oscillator is in overbought territory (placed at 92), indicating the ongoing breather to continue. However, we expect the market to trade with a positive bias where the current breather would help index to form higher base and close above 24,500 which will further fuel the rally towards the psychological mark of 25,000.

4. For the coming week, strong support is placed at 23,800-23,500 zone. Meanwhile, on the upside, 24,500 would continue to act as immediate resistance.

5. In current scenario, possibility of knee-jerk reaction on escalation of geopolitical worries cannot be ruled out. However, historical evidences suggest that market will eventually stabilise. Hence, we advise not to panic but rather build quality portfolios from medium to long term perspective amid ongoing earning season.

6. There has been an ancient market saying of “sell in May and go away”. However, the historical data suggests that the Nifty 50 has witnessed positive returns in 9 out of 12 years (2013-2024) with an average return of 2.1%. This makes us believe that any dip amid volatility related to domestic and global factors should be capitalized a buying opportunity.

7. The blend of following parameters makes us believe that the index has formed a durable bottom. Tracking the historical data, benchmark index has staged a strong rebound after approaching the price and time wise correction. Key point to highlight is that, the current up move is backed by the faster pace of retracement, indicating structural turnaround that has been further validated by significant improvement in momentum, breadth as well as sentiment indicators.

8. Amidst ongoing volatility, following are the key monitorable which would act as tailwind:

a) Bilateral Trade Agreement between India and US

b) Continuation of FII’s inflow

c) Further strengthening of Rupee post 1.5% of correction in last week augurs well for equity market.

d) Decline in Brent crude oil prices

Stocks To Buy This Week – Dharmesh Shah

Dharmesh Shah of ICICI Securities recommends buying Sun Pharmaceutical Industries shares.

Buy Sun Pharmaceutical Industries shares in the price range of ₹1,780 – 1,833. He has Sun Pharma share price target of ₹2,040, and suggests maintaining a stop loss of ₹1,687.

Disclaimer: The Research Analyst or his relatives or I-Sec do not have actual/beneficial ownership of 1% or more securities of the subject company, at the end of 02/05/2025 or have no other financial interest and do not have any material conflict of interest.

The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.