ICICI Securities Analyst Recommends Buying Tata Power and Sona BLW Shares

Indian Stock Market Sees Rebound on Monday

The Indian stock market opened higher on Monday, 1 June, following post-earnings gains in stocks such as IndiGo and Asian Paints, while the broader market attempted to recover from Friday's sharp sell-off. The NSE Nifty 50 rose 0.38% to 23,628.20, while the BSE Sensex gained 0.36% to 75,043.35 in early trade.

The rebound comes after both benchmark indices tumbled around 1.5% on Friday, a session marked by record foreign portfolio outflows of $2.22 billion and the highest-ever turnover on the National Stock Exchange (NSE). Positive sentiment across Asian markets also aided domestic equities, with major indices in Japan, Hong Kong, and South Korea trading firmly higher.

Meanwhile, Brent crude oil hovered around $93 per barrel as investors closely tracked developments in the ongoing US-Iran peace negotiations. Market participants noted that key technical levels will be crucial in determining whether the current recovery can sustain momentum in the sessions ahead.

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Market Outlook

According to Dharmesh Shah, Vice President, ICICI Securities, the equity benchmark concluded the monthly expiry week on a subdued note. The Nifty 50 lost 0.6% to settle the week at 23,548. The midcap index, however, endured its northbound journey by clocking a fresh all-time high. The midcap and small-cap indices outperformed, gaining 0.7% and 1%, respectively.

Sectorally, PSU Bank, Auto, and Metal outshone while defensive sectors like FMCG and Pharma remained laggards. The index witnessed a gap-up opening, but lack of follow-through strength above the psychological mark of 24,000 resulted in profit booking that dragged the index downward and filled the gap. Consequently, the weekly price action formed a bear candle with a higher high-low, indicating profit booking at higher levels.

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This price action successfully established a higher base above the rising trend line drawn adjoining April-May lows. The index is undergoing a healthy consolidation in the 23,800-23,200 zone that has set the stage to gradually head toward the 24,500 level in the coming month. In the process, strong support is placed at 23,200.

Key Monitorable

Market participants will be keeping a close eye on several key monitorables, including:

• Auto sales numbers
• RBI policy
• IIP data
• Falling crude oil and US 10-year treasury yield, which would fuel momentum in the Indian market

Stock Recommendations

Dharmesh Shah of ICICI Securities recommends buying Tata Power and Sona BLW Precision Forgings. He recommends buying Tata Power in the range of ₹412-424 with a target price of ₹470 and a stop loss of ₹392. He also recommends buying Sona BLW Precision Forgings in the range of ₹600-610 with a target price of ₹660 and a stop loss of ₹588.