HDFC Securities Analyst Recommends Buying Tata Steel and Linde India Shares

Stock Market Rallies on Monday, May 4, as Auto Stocks and Crude Oil Prices Recover

The domestic equity benchmarks, Nifty 50 and BSE Sensex, opened higher on Monday, May 4, following upbeat monthly sales data from auto stocks such as Maruti Suzuki and Hero MotoCorp. The sentiment was also aided by a pullback in crude oil prices after U.S. President Donald Trump said the U.S. would begin efforts to help free ships stranded in the Gulf.

By 11:43 IST, the Nifty 50 was up 1% at 24,236.60, while the Sensex also gained 1% to 77,690.67. This is a significant recovery from the last session on Thursday, when both indices fell by approximately 0.7% amid rising crude oil prices and geopolitical tensions that weighed on overall sentiment. The rupee also dropped to an all-time low since then, but worries have eased somewhat following Trump's comments about maritime navigation in the Strait of Hormuz, which helped to stabilise global risk sentiment.

Market Analysis

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Brent crude, which had skyrocketed to a four-year peak of $126.41 per barrel last week, has since adjusted to about $109 per barrel. This decline in crude oil prices has contributed to the recovery in the stock market.

Market Views - Vinay Rajani, Senior Technical and Derivative Analyst, HDFC Securities

The Nifty 50 has been in a consolidation phase between 23,800 and 24,600, with the index unable to sustain decisively above its 50 DEMA, currently placed near 24,200. Above this level, a key resistance is seen at 24,600, which also marks the swing high on the daily chart. Given the recent price action, stock-specific and sector-specific moves are likely to dominate the market.

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Stock Recommendations

Two stocks to buy in the near-term are Tata Steel and Linde India. Tata Steel share price has broken out from a "Flag" pattern on the daily chart and is on the verge of breakout from its 52-week and all-time high. The stock is trading above all important moving averages. Indicators and oscillators have turned bullish on the short to medium-term charts.

Linde India share price has recently broken out from medium-term consolidation. The primary trend of the stock has been bullish, with the price holding above all key moving averages. Indicators and oscillators have been showing strength on the weekly and monthly charts.