Dharmesh Shah from ICICI Direct shares his thoughts on the stock market’s recent performance. He believes that while there will be ups and downs, now is a good time to buy stocks when their prices dip. The dollar index has changed, and despite recent highs, he expects it to stabilize around 85.75.
This year has started brightly, with the Nifty 50 index rising by about 500 points. A key level of 23,900 has been broken, and he predicts the Nifty could rise to 24,500 soon. But January is known for its unpredictable nature, especially with earnings reports coming up and the US presidential transition affecting global policies.
In the automotive sector, recent positive sales numbers have surprised everyone. Stocks like Tata Motors and Maruti are bouncing back due to being previously undervalued. Among the auto stocks, Mahindra & Mahindra looks strong, with a target price of 3,350. Two-wheeler stocks like Eicher Motors are also promising, expecting to reach around 5,650. Additionally, tire companies like Ceat Tyres and JK Tyres should benefit from lower crude oil prices.
On the international front, the dollar index has been fluctuating. After the US election, it climbed to 109, but there’s a chance it might struggle to get past 110-111. If this happens, it could be good for Indian metal stocks, which have already been factoring in some bad news. Stocks like Tata Steel and JSW Steel are considered good options in the metal sector.
Shah also emphasizes the potential in the defense sector, with Hindustan Aeronautics (HAL) being a top pick due to its strong fundamentals and technical support. He anticipates a target price of 4,685 for HAL, with a stop-loss at 3,920.
Looking ahead, the infrastructure sector seems bright, especially with expectations of increased government spending. JK Cement is identified as a promising stock, with an anticipated target of 5,320.
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