August 23 Stock Market Update: Six Potential Buy or Sell Stocks for Day Traders
Written by Sanjay Kumar
Stock Market Guide for 23 August 2023
The Indian stock market experienced a subdued session on August 22, with both the benchmark indices – Sensex and Nifty – ending nearly flat. Persistent worries surrounding US interest rates and China’s economic stability contributed to this cautious sentiment. Despite this, the mid-cap index managed to shine by reaching a new all-time high, fueled by optimistic domestic prospects.
Selective Heavyweights Offset by Losses: While stocks of certain heavyweight companies such as ITC, Larsen & Toubro, and Axis Bank posted gains, losses in HDFC Bank, ICICI Bank, and TCS hindered overall market performance.
Closing Figures: Sensex concluded the session with a minor gain of 4 points, closing at 65,220. On the other hand, Nifty inched up by 3 points, settling at 19,396. It’s noteworthy that mid-cap and small-cap indices witnessed robust growth, recording increases of 0.94% and 0.89%, respectively. These indices have notably surged by approximately 22% year-to-date, in contrast to the 7% gain observed in blue-chip stocks.
Gainers and Drags on Nifty50: Notable gainers on the Nifty50 included ITC, HDFC Life Insurance, NTPC, and Adani Enterprises, while Jio Financial Services, Bajaj Finserv, and Cipla were among the top drags.
Foreign vs. Domestic Institutional Investors: Foreign institutional investors (FIIs) remained on a selling spree, offloading ₹495 crore worth of Indian equities. Meanwhile, domestic institutional investors (DIIs) continued their trend of net buying, investing ₹533.75 crore during the trading session.
Factors Driving FIIs’ Selling Streak: Analysts attributed the ongoing selling activity by FIIs to the surge in US bond yields, the strengthening of the US dollar against its peers, and concerns over potential interest rate hikes by the US Federal Reserve. These factors collectively influenced FIIs to withdraw funds from the domestic market, leading to heightened market volatility.
Market Outlook and Recommendations:
Nifty Outlook: Ajit Mishra, SVP – Technical Research at Religare Broking, suggested that the recent rebound in Nifty is likely a counter move within a corrective trend. Despite this rebound, Nifty faces multiple hurdles before a potential change in trend. He advised participants to adjust their trades according to the mixed trend across sectors.
Bank Nifty Outlook: Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities, noted continued weakness in the Bank Nifty index. He highlighted the bearish crossover pattern observed in the daily Relative Strength Index (RSI) and indicated that the index might see a decline towards the 43,800 mark, with the potential for further drops.
Global Headwinds and Market Factors:
The stock market’s gains remain constrained by several global headwinds, including rising US bond yields, a stronger US dollar, potential US Federal Reserve interest rate hikes, and concerns surrounding China’s economic stability. These factors have collectively limited the upward momentum in the domestic market. The US 10-year yield reached a 16-year high, and the dollar index climbed above 103, influencing market sentiment.
Stocks in F&O Ban List:
The following 12 stocks have been placed on the F&O ban list by the stock exchange for Wednesday’s trading session due to exceeding 95% of the market-wide position limit (MWPL): Steel Authority of India (SAIL), BHEL, Escorts Kubota, Metropolis Healthcare Ltd, Gujarat Narmada Valley Fertilizers And Chemicals Limited, Delta Corp, Hindustan Copper, India Cements, Indiabulls Housing Finance, Punjab National Bank, Manappuram Finance, and Zee Entertainment Enterprises Ltd. While these securities are in the F&O ban, they will still be available for trading in the cash market.
Intraday Stock Recommendations:
Several market experts shared their intraday stock recommendations:
Ganesh Dongre (Senior Manager – Technical Research at Anand Rathi) recommended buying (1) Hindustan Aeronautics Limited (HAL) at ₹3,893 with a stop-loss of ₹3,850 and a target price of ₹3,960. He also suggested buying (2) IndusInd Bank at ₹1,402 with a stop-loss of ₹1,380 and a target price of ₹1,430.
Anuj Gupta (Market Expert at HDFC Securities) advised buying (3) Tata Power with a stop-loss of ₹232 and a target price of ₹257. He also recommended buying (4) Federal Bank with a stop-loss of ₹127 and a target price of ₹148.
Pravesh Gour (Senior Technical Analyst, Swastika Investmart Ltd) suggested buying (5) Tata Power at ₹243.50 with a stop-loss of ₹237 and a target price of ₹254. He also recommended buying (6) Gujarat Mineral Development Corporation Ltd (GMDCL) at ₹196 with a stop-loss of ₹190 and a target price of ₹206.
Note: Investors are advised to seek advice from certified experts before making any investment decisions.
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