The Indian stock market saw some nervousness on Wednesday ahead of the Federal Open Market Committee (FOMC) meeting, where the focus is on the potential impact of a US Federal Reserve rate cut. After scaling new all-time highs during the day, the benchmark indices corrected slightly. The Nifty 50 index closed 0.16% lower at 25,377.55, while the S&P BSE Sensex ended at 82,948.23 amidst profit booking.
The Nifty Bank index, on the other hand, continued its bullish momentum, rising 1.08% to close at 52,750.40, driven by expectations of a Fed rate cut. Nifty Financial Services also performed well, gaining 1.4%, while broader market indices such as Nifty Midcap 100 and Small Cap 100 underperformed, both falling by 0.8%.
Trade Setup for Thursday
According to Rupak De, Senior Technical Analyst at LKP Securities, the Nifty index reached a new high but saw some profit booking, closing 130 points below its peak for the day. De noted that the index has been trading in a narrow range, with support at 25,300. If this level is breached, further downside toward 24,900-25,000 can be expected. On the upside, resistance remains at 25,500.
Asit C. Mehta Investment Intermediates’ AVP Technical and Derivatives Research, Hrishikesh Yedve, noted that the Bank Nifty demonstrated strength by forming a bullish candle on the daily chart. In the near future, gains may be extended towards 53,500–53,800 if it overcomes the 53,000 resistance.
US Fed Rate Cut in Focus
The market is poised to react to the outcome of the US Fed meeting, where a 50 bps rate cut is expected. Shashank Pal, Chief Business Officer at PL Wealth Management, remarked that the rate cut could lower borrowing costs for US companies and influence central banks globally. In India, it may lead to a short-term rally in stock prices, although markets may stabilize in four to six weeks.
Stocks to Buy Today
Sumeet Bagadia’s Picks:
Nava Ltd (₹1316.2, Target ₹1390, Stop Loss ₹1270)
Bagadia suggests buying Nava Ltd due to a favorable chart pattern indicating a higher high and higher low formation. The stock has recently broken its previous resistance, signaling a strong upward potential.
Bajaj Finance (₹7631.10, Target ₹8185, Stop Loss ₹7385)
Bajaj Finance has broken out from a falling trend line and consolidation. A retest of the breakout at ₹7385 suggests continued bullish momentum. If it clears the ₹7700-7800 resistance zone, it could hit the target of ₹8185.
Ganesh Dongre’s Picks:
Vedanta Ltd (₹448, Target ₹465, Stop Loss ₹435)
Vedanta has found support at ₹435 and is now poised for a reversal. Dongre advises buying the stock, targeting ₹465 as the next resistance level.
Federal Bank (₹186, Target ₹195, Stop Loss ₹180)
Federal Bank’s recent bullish reversal pattern makes it a buy at ₹186. With strong support at ₹180, the stock has potential to rise to ₹195.
Intellect Design Arena Ltd (₹986, Target ₹1025, Stop Loss ₹970)
A breakout on the daily chart, combined with an upward-turning RSI, suggests buying Intellect Design Arena Ltd with a target of ₹1025.
