Sensex, Nifty Surge Over 4% in 1 Week: What should investors, traders do?

Stock Market Guide: Domestic equity benchmarks registered weekly gains of more than four per cent each last week, securing six-week closing highs. During the trading week from March 17 to March 21, the BSE Sensex surged 3,076.6 points, up 4.16 per cent to 76,905.51, while the 50-scrip index, the Nifty 50, climbed to 23,350.40, up 4.25 per cent or 953.2 points—their strongest weekly gains in more than four years.

What should investors or traders do?

Analysts at Religare Broking have advised traders to 'buy on dips' focusing on sectors that have demonstrated consistent strength. "Banking, financials, metals, and energy stocks remain preferred picks, while selective opportunities can also be explored in PSU and auto stocks," according to the brokerage.

The rebound in broader markets may offer potential trading opportunities, though aggressive positioning should be avoided, according to analysts at the brokerage. 

Meanwhile, SBI Securities' analysts have highlighted two factors for the future:

• Global cues will dominate Dalal Street in the absence of domestic triggers 
• Investors may stick to quality businesses with supportive valuations for medium to long-term investment perspective 

According to Devarsh Vakil of HDFC Securities, the underlying trend of Nifty continues to remain positive.

"Having surpassed the initial hurdle of the downward-sloping trend line, Nifty is facing immediate resistance at the 200 EMA of 23,400," said Vakil.

According to him, after surpassing this hurdle, the Nifty 50 could advance toward the next resistance level of 23,800 in the near term.

Support for the headline index has shifted upward to the 23,200-23,250 band, said Vakil. 

According to Vinod Nair of Geojit Financial Services, the domestic market is experiencing renewed optimism due to a change in FII behaviour

. This shift, from net sellers to net buyers, is largely attributed to the US Fed's dovish stance, hinting at potential rate cuts.

“Despite global trade uncertainties, factors like improved domestic macroeconomic indicators and anticipated earnings growth are driving investor interest,” said Nair.

Should long-term investors panic?

Religare has cautioned long-term investors, suggesting that they track key technical levels and global cues for further movement.

However, the market sentiment remains positive, according to the brokerage. 

Stock Recommendations: Shares to buy for long and short term?

From the PSU, banking, financial, metal, and auto categories, several domestic brokerages have recommended major largecap stocks, including GAIL, Mannapuram Finance, Mahindra & Mahindra, and Hyundai.

Analysts at domestic brokerages have recommended these stocks with both a long-term and short-term perspective.

Here is the list:

PSUs on analysts' radar

Axis Securities has recommended buying Coal India shares for a short-term target of Rs 425 with a stop loss at Rs 405.

According to the target, it could rise to 4.71 per cent in the next 15 days.

Auto Stocks to Buy

Axis Securities recommends buying Tata Motors shares for a fifteen-day target and advised booking profit at Rs 699 with a stop loss at Rs 655. For the Hero MotoCorp stock, the brokerage has a 'buy' stance with a 15-day target of Rs 3,850 and a stop loss at Rs 3,620, implying a return of 5.97 per cent.

Financial Stocks to Buy

Sharekhan has suggested buying the PSU SBI stock for a target of Rs 980.

Geojit has a ‘buy’ stance on Indian Bank shares with a target of Rs 619.

MOFSL has a ‘neutral’ stance on Mannapuram Finance shares for a target of Rs 240.

Axis Securities recommends buying PNB Housing shares for a short-term target of Rs 925 with a stop loss at Rs 825.

The target implies a potential upside of 7.30 per cent.

Ventura Securities recommends buying AU Small Finance Bank shares for a target of Rs 767.

ALSO READ: 7 Stocks to Buy for Short Term | Analysts recommend largecap, midcap scrips for 2 weeks; Godrej Consumer, Hero MotoCorp on the list

(Disclaimer: The views/suggestions/recommendations expressed here in this article are solely by investment experts. Zee Business suggests its readers consult their investment advisers before making any financial decision.)