Benchmark Indices See Positive Uptick, Recovery Led By Bank Nifty, Say Analysts
India's benchmark equity indices erased their early losses to close higher for the second consecutive day on Wednesday.
The equity markets bounced back positively on Wednesday, led by a robust Bank Nifty performance, according to analysts.
“The way markets have rebounded, especially through the banking heavyweights, indicates that bulls are trying to hold the short-term average,” said Ajit Mishra, senior vice president at Religare Broking Ltd.
If the Nifty and the Bank Nifty maintain the 21,600 and 45,800 mark, respectively, then the tone will remain sideways with a positive buy, according to Mishra.
He prefers stock-specific trading and recommends information technology, auto and pharma sectors.
Ventura Securities Ltd.'s Head of Research Vinit Bolinjkar expects better numbers coming from HDFC Bank Ltd., in terms of its performance stabilising. “Until that doesn’t happen, the stock is not going anywhere," he said.
State Bank of India has given the same return on equity like HDFC Bank, along with it being available at 1.2 or 1.3 times sum of parts valuations, Bolinjkar said. Thus, SBI currently becomes the most preferred stock in the market, he said.
The lender underperformed the whole public sector undertaking rally and is now fiercely catching up, he said.
India's benchmark equity indices erased their early losses to close higher for the second consecutive day on Wednesday, on the back of gains in SBI.
The NSE Nifty 50 ended 106.80 points, or 0.49%, higher at 21,850.05, and the S&P BSE Sensex gained 277.98 points, or 0.39%, to close at 71,833.17.
On daily charts, it has formed a long bullish candle, which is largely positive. The current market texture is non-directional, hence level-based trading would be the ideal strategy for day traders, said Shrikant Chouhan, head of equity research at Kotak Securities Ltd.
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