ICICI Securities Analyst Suggests Buying Reliance and Power Grid Corporation Shares on April 20

Stock Market Witnesses Second Consecutive Weekly Gain

The domestic benchmark indices, Nifty 50 and Sensex, experienced a significant increase on Friday, April 17, marking their second consecutive weekly gain. The market sentiment was enhanced by declining oil prices and optimism surrounding US-Iran discussions.

On Friday, the Nifty 50 climbed by 0.65% to reach 24,353.55, while the Sensex increased by 0.65% to hit 78,493.54. Both indices recorded approximately a 1.3% rise this week, following a remarkable 6% jump last week, which was their best performance in five years.

The global risk tolerance has significantly boosted due to fresh optimism for a diplomatic settlement between the US and Iran, coupled with a 10-day truce between Israel and Lebanon. This has resulted in a substantial increase in the wealth of investors, reaching ₹4,65,64,461.51 crore (USD 5.02 trillion) on the BSE, a gain of ₹4.84 lakh crore.

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Market Outlook

Dharmesh Shah, Vice President of ICICI Securities, provided a detailed analysis of the current market situation. He noted that the index has reached price and time-wise maturity after 18 months of consolidation and a 16% correction. This historical template signals a durable bottom, paving the way for the next major leg of the bull market.

The current market trajectory closely mirrors the volatility observed during the Russia-Ukraine conflict, exhibiting a near-identical magnitude of correction. However, Shah remains focused on the long-term trend and has moderated the FY-27 target to 28,800 due to immediate volatility from global trade and geopolitical tensions. He suggests that investors should view any interim market corrections as opportunities to accumulate quality stocks to strengthen their medium-term portfolios.

Key Observations

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Shah's constructive bias is based on several historical observations:

Bank Nifty

Post-COVID, intermediate corrections have consistently stabilized near 20-22%, serving as a launchpad for subsequent 30% average gains. A significant rebound in market breadth marks a definitive turning point, setting the stage for the next major upward move.

Stock Recommendations

Dharmesh Shah recommends buying Reliance Industries Ltd (RIL) and Power Grid Corporation of India Ltd. He suggests buying RIL in the range of ₹1,325-1,365 with a stop loss of ₹1,237 and a target price of ₹1,480. For Power Grid, he recommends buying in the range of ₹308-318 with a stop loss of ₹289 and a target price of ₹352.