stocks to buy: What to do with BSE, HAL, CONCOR and 2 other stocks? Aamar Deo of Angel One decodes

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Indian markets were late to join the Fed rate cut party, but when they did there was no holding back as both Sensex and Nifty ended at record highs. How far can this momentum go considering that chorus on another 50 bps cut by the year end is only growing?
Markets, both local and global, have given a thumbs up to the US Fed rate cut of 50 basis points after 54 months, signalling that the US Fed is willing to do all what it takes to ensure that the US economy, which is almost 26% of world GDP, does not go into a recession. Investors took positive cues from the event, but at the same time, a section of investors were also puzzled by the quantum of cut, which indicates that all might not be as good in the US economy, as is being projected.

However, going forward, it appears quite likely that the US Fed is likely to continue on the rate cut spree in 2024 and going into 2025, with a total rate cut expected anywhere between 200 basis points and 250 basis points.

Overall, markets have maintained their bullish stance and any correction is being bought into, clearly reflecting the upper hand of the bulls.

What are the important levels for Nifty and Bank Nifty for this week?
Both the Nifty and the Bank Nifty hit record highs last week, with Bank Nifty outperforming the Nifty. While Bank Nifty gained almost 3.57% WoW, Nifty managed gains of almost 1.71% WoW. On the downside, Nifty has strong support around the 25300-25400 zone whereas resistance is seen around the 25,900-26,000 zone. Bank Nifty on the other hand, has support around the 52,700-52,800 zone whereas resistance is seen around the 54,300-54,400 zone.One of the big takeaways this week was the performance of private banks, especially HDFC Bank and ICICI Bank. Do you think investors are showing interest amid rate cut hopes by RBI as well?
Both the heavyweights in Bank Nifty, HDFC Bank & ICICI Bank, rallied sharply last week, with weekly gains of 4.52% and 7.05% respectively. Private sector banks have definitely started appealing to the investor community as compared to PSU banks, post the US Fed rate cut. Whether and when the RBI cuts rates in India, is something we will all have to wait and watch, and that would depend a lot on the inflationary trajectory going forward.

Overall, the banking sector was one of the underperforming sectors for quite some time now, and it appears so that it’s taking the lead. HDFC Bank sustaining above 1,800 level is very crucial for any major rally in Bank Nifty.

PSU bank stocks have been on a losing side and the index is down by over 4% in the past one month. Do you think they have lost steam in the near-to-medium term and what should investors do with them?
PSU banks have tended to correct over the past month, with most of the PSU banks trading at 15%-20% discount from their all-time highs, clearly indicating a shift in investor preference towards private sector banks, which have started outperforming.

Going forward, investors are of the view that with the likely rate cuts, private sector banks may be better placed to manage their margins in such a rate reduction scenario. It does appear that in the near to medium term, the momentum is likely to be on the decline in PSU banks, and till such time we do not see a reversal in the trend in SBI, most of the PSU banks could continue to consolidate.

What is your view on the auto sector, especially on passenger car makers who see a slowdown in sales, going ahead and two wheeler makers who are expected to do well?
Most of the auto players in the four wheeler space, have seen a correction in their stock prices, or at the least, a consolidation, with Tata Motors bearing the most brunt. The slowdown in sales, with the passenger vehicle segment witnessing a decline for the second consecutive month while on the other hand, the 2 wheeler segment witnessed a 9.35 growth in August, and that is clearly reflecting in 2 wheeler stock prices, where Bajaj Auto, Hero Motocorp & TVS Motors, all hitting record highs last week.

The approaching festival season and normal monsoons bode well for this sector in coming months, but we will have to watch out for the monthly sales numbers for the next couple of months, to gauge the overall trend.

FPIs net buying has surpassed over Rs 33,000 crore in three weeks. Which pockets/sectors could be the biggest beneficiaries of this?
It appears that as global and domestic markets trade close to record highs, investors and FPIs alike, are likely to become more selective in stock picking, and focus is shifting towards large caps as they are considered defensive in case of any major market correction. Historically, large caps correct the least when compared to midcaps or smallcaps. Further, with the Indian economy poised to continue to grow at around 7% p.a., the foreign inflows will continue as new opportunities emerge across emerging sectors including renewables, chemicals, IT, EV, to name a few.

BSE, Concord and Macrotech Developers grabbed eyeballs with big rallies while HAL & CONCOR were among the worst losers? What should investors do with them?
BSE witnessed a spectacular rally last week, up almost 37% WoW, whereas Concord Biotech and Macrotech were up 25% & 13% respectively. Investors should ideally look at booking part profits in these stocks, and can trail the rest below 3500, 2300 & 1240 respectively for BSE, Concord & Macrotech.

On the losing side, while HAL lost 6.7% WoW, Concor was down almost 7% WoW. Investors can hold HAL with a Stop-loss below 4000 whereas for Concor, the stop loss should be low the 860 mark, and investors should look at exit opportunities on any bounce back as both the stocks have formed short-term tops.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)