Market Snapshot: Nifty 50 Trade Setup, Key Factors, and Stock Recommendations for Monday

The Indian stock market is poised for an interesting start to the week, with global and domestic cues shaping investor sentiment. The Nifty 50, after breaking a six-week losing streak, is signaling a positive opening. However, a sense of cautious optimism prevails as market participants watch for clarity on several key fronts, including geopolitical developments, domestic reforms, and global economic data.

Nifty 50 Trade Setup: Levels to Watch

Technical analysts suggest that the Nifty’s immediate trajectory will be defined by its ability to hold key levels. The index has shown some resilience after bouncing back from a recent low. For a sustained rally, it is crucial for the Nifty to decisively cross the resistance zone around 24,750–24,800. A breakout above this level could pave the way for a move towards the 25,100 mark.

On the other hand, the support base is seen in the 24,450–24,470 range. A breakdown below this level could signal a resumption of the bearish trend, potentially dragging the index down to 24,250 or even 24,100. Traders should remain nimble and focus on stock-specific opportunities, as the broader market may remain range-bound until a clear trend emerges.

Key Drivers for the Market

• Geopolitical Developments: The recent meeting between the U.S. President and the Russian counterpart has been a major focus. While a definitive deal to end the conflict in Ukraine was not reached, the “understanding” and positive tone from the summit are seen as a positive for global markets, potentially reducing risk-off sentiment.
• GST Reforms: The Indian government’s proposed “next-generation” GST reforms, which aim to rationalize tax rates and simplify the tax structure, are being viewed as a significant positive. The plan to move towards a two-slab system (standard and merit) with lower taxes on essential goods could boost consumption and have a positive impact on a wide range of sectors. This is a key domestic catalyst that could provide long-term support to the market.
• Trump Tariffs and Their Impact: The recent imposition of tariffs on Indian imports by the U.S. government has created some volatility. While the initial reaction was a gap-down opening, the market has shown resilience. Analysts believe that these tariffs may be a negotiation tactic and that a final bilateral deal could result in a lower tariff rate. The impact is seen as “manageable” for the Indian economy, as domestic consumption remains the primary growth driver. However, export-oriented sectors like textiles, gems and jewelry, and auto components could face headwinds.
• FII and DII Action: Foreign institutional investors (FIIs) have been net sellers in recent weeks, while domestic institutional investors (DIIs) have been providing strong support. The market’s direction will also depend on the trend in foreign flows. The recent S&P credit rating upgrade for India could trigger a fresh wave of foreign inflows, which would be a significant tailwind.

Eight Stocks to Watch on Monday

Based on technical analysis, recent corporate earnings, and market sentiment, here are eight stocks that could be in focus for traders and investors:

• Indian Bank: This public sector bank has been showing strong performance and recently witnessed a consolidation range breakout on its daily chart, suggesting a continuation of its primary uptrend.
• Tech Mahindra: After being under pressure, the stock has formed a bullish engulfing pattern at a key support level, indicating a potential for a near-term rebound.
• Infosys: The company’s recent strategic collaborations and its performance in the IT sector will be watched closely, especially given the softer U.S. inflation data and a dovish outlook.
• Indian Oil Corporation (IOCL): The state-owned oil major reported a strong increase in its quarterly net profit, which could lead to positive sentiment for the stock.
• Ashok Leyland: The commercial vehicle manufacturer saw a significant rise in its consolidated net profit, driven by record volumes, making it a stock to watch in the auto sector.
• Hindustan Copper: The company’s strong revenue growth led to an increase in its quarterly net profit, putting it on the radar for investors interested in the metals and mining sector.
• Vodafone Idea: The telecom company’s widening losses and the market’s reaction to its financial health will be a key point of interest for traders.
• IRB Infrastructure: The company posted a strong rise in its quarterly net profit, supported by higher revenues, which could see the stock attract buying interest.