Market Watch: Which stocks to buy for bottom-up investment?

Welcome to ETMarkets Watch, the show about stocks, market trends and money-making ideas. I am Atul P. M and here are the top headlines at this hour.

Vedanta puts in expression of interest to buy govt stake in BPCL

Lakshmi Vilas Bank has enough liquidity to pay back depositors, says RBI-appointed administrator

Elon Musk beats Zuckerberg to become 3rd richest person as Tesla enters S&P500

Franklin Templeton MF’s six shut schemes garner Rs 941 crore in a fortnight

Bengaluru’s Wonderla Holidays to re-open water rides for public from Nov 20

Let us take a quick glance at what happened on Dalal Street today.

Indian shares reversed course to close at a record high on Wednesday, as a rally in automotive and banking shares offset worries about rising coronavirus cases globally and at home.

Banking, auto and engineering stocks saw brisk buying amid firm global cues and robust foreign fund inflows.

BSE Sensex gained 227 points to close above the 44,000 level for the first time at 44,180. Intra-day, the index touched its lifetime high of around 44,215.

Nifty advanced 64 points to hit an all-time high of 12,938, after making an intra-day record of 12,948.

L&T, ICICI Bank, M&M and SBI led the gains in the 30-share Sensex pack, while some selling in Infosys, TCS and HUL capped the upside.

Midcaps and smallcaps outperformed their largecap counterparts.

Sectorwise, BSE Capital Goods, Auto, Industrials, Realty indices and Bankex gained over 2 per cent each, while BSE FMCG, IT and TECk indices witnessed over 1 per cent drop.

With the record closing high, Nifty’s P/E ratio has hit 35.59 times against its 10-year average of less than 25, indicating that valuations are no longer in the comfort zone. Can the market sustain the premium valuation going forward? We caught up with Rusmik Oza of Kotak Securities to try and seek answers to these and more questions.

READ  Dalal Street week ahead: Nifty signals loss of momentum, volatility likely to increase

Welcome to the show, Mr Oza

1) What can really support the current market valuations?

2) What can drive incremental gains for Nifty-50?

3) Which stocks are looking attractive for bottom-up investment?

On the technical chart, Nifty50 formed a bullish candle. Analysts said there is no sell signal on technical chart and the index has the potential to take out 13,000 level in the short term. They noted that the index has been making higher lows for a couple of sessions and support for the NSE barometer has shifted upward to 12,800 level.

We caught up with Mazhar Mohammad of Chartview India to decode the charts.

1) How do you look at the trade setup of Nifty after today’s rally?

2) Which sectors are showing signs of further gains?

3) How do you look at the trade setup for tomorrow’s session?

Globally, other Asian markets ended mixed while European markets traded higher in early deals. US stock futures traded higher as the stock indices eyed record highs.

That’s all for now. Do check out for all the news, market analysis, investment strategies and dozens of stock recommendations. Enjoy your evening. Bye bye!



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