The Indian stock market's key benchmark indices closed lower on Friday, driven by a sell-off in financial stocks and investor caution ahead of the U.S. non-farm payrolls report. Sumeet Bagadia of Choice Broking recommends buying Federal Bank, M&M, and TCS shares on Monday.
Financial stocks faced significant pressure after the Reserve Bank of India proposed tighter lending norms for non-banking financial companies (NBFCs), raising concerns about the sector's growth prospects. Bajaj Finance and Bajaj Finserv were among the biggest drags on the indices, with selling pressure spreading across the NBFC space.
Despite the downturn, the Nifty 50 index remains above its key moving averages, with a cautiously positive undertone. The RSI is at 59.89, indicating a bullish zone, while India VIX at 12.15 and PCR at 1.09 suggest cautious optimism. Auto, IT, and MidSmall Healthcare sectors outperformed, while Financial Services and Private Banks lagged.
“Immediate support is placed at 24,300–24,370, while 24,700–24,750 remains the key resistance zone.”
Sumeet Bagadia, Executive Director at Choice Broking
Sumeet Bagadia noted that the broader trend for the Nifty 50 remains positive, although the inability to sustain above 24,600 suggests potential consolidation. Immediate support is at 24,300–24,370, with resistance at 24,700–24,750. For the Bank Nifty index, a sideways to bearish trend is expected unless it reclaims the 57,800–58,000 resistance zone.
Bagadia recommends buying Federal Bank, M&M, and TCS shares. Federal Bank is trading around ₹356, showing a strong bullish trend. M&M is trading at ₹3502, with a target of ₹3800 and a stop loss at ₹3350. TCS is trading around ₹2453, indicating renewed buying interest.
“A sustained move above the resistance zone could revive bullish momentum, whereas a break below support may accelerate corrective pressure.”
Sumeet Bagadia, Executive Director at Choice Broking
Background
The recent developments in the Indian stock market reflect ongoing investor concerns about regulatory changes and global economic indicators. The RBI's draft proposal for NBFCs has particularly impacted financial stocks, highlighting the sector's vulnerability to regulatory shifts.
Looking ahead, investors should monitor the U.S. non-farm payrolls report and its potential influence on Federal Reserve policy expectations. The market's response to these developments will be crucial in shaping future trends.
