The Indian stock market is expected to remain under pressure on Thursday amid weak global cues, following the Reserve Bank of India's decision to raise the repo rate by 25 basis points to 5.50% in its latest policy meeting. According to Jay Thakkar, Vice President and Head of Derivatives and Quant Research at ICICI Securities, options data indicates immediate support for the Nifty 50 at 22,500, followed by 22,000 on a cumulative basis. On the upside, 22,800 has the highest call base, followed by 23,000, while the short-term bias remains cautiously bullish with targets of 22,800-23,000 and 23,200. As reported by NDTV Profit, until 22,200 levels are held, a retracement of the overall eight-week negative close looks more likely. In the previous session, the benchmark equity indices fell over half a percent each, with the Nifty 50 closing near 22,600 level.
HDFC Life Insurance Company has declined sharply from around ₹820 to ₹510, accompanied by a rise in open interest indicating short build-up. Recent selling followed IRDAI's amendments related to commission caps, adding to the pressure. However, the stock has held its 52-week low and witnessed some short covering in recent sessions, suggesting that near-term selling pressure may be easing. The stock is trading above its max pain level of ₹530, while call unwinding at the ₹540 strike also indicates potential short covering. According to ICICI Securities, futures strategy recommends buying in the ₹540-550 range with a stop loss below ₹525 and target of ₹580-590.
Petronet LNG has corrected from its highs and undergone a prolonged consolidation, with recent decline in futures open interest indicating long unwinding. The stock's relative outperformance and subsequent rise in open interest point towards fresh long build-up. Options data shows strong put support at the ₹280 strike, while call unwinding across ₹285-310 is positive for the stock. Petronet LNG is also trading above its ₹290 max pain level, which could act as near-term support. As recommended by ICICI Securities, futures strategy suggests buying in the ₹294-298 range with a stop loss below ₹288 and target of ₹305-315.
BHEL share price has outperformed the broader market and recently broken out of a sideways consolidation, indicating potential continuation of the uptrend. Open interest had declined during the consolidation, suggesting profit booking, but has started rising following the breakout, indicating scope for fresh long positions. Options data shows strong put support spread across the ₹400-450 strikes, while the highest call base is at ₹450. A sustained move above this level could trigger further upside. The stock is also trading well above its ₹435 max pain level, which may now act as near-term support. According to ICICI Securities, futures strategy recommends buying in the ₹445-450 range with a stop loss below ₹430 and target of ₹470-480.
According to Pankaj Pandey, Head of Retail Research at ICICI Securities, India's broader market is likely to continue outperforming largecap stocks as stronger earnings growth and steady domestic inflows support midcap and smallcap companies. He expects smallcap earnings growth to remain above 30% compared to largecap earnings growth of 15-16% and midcap growth of 24-25%. Domestic investor flows are increasingly shifting towards the broader market, with about 58% of domestic flows now going towards midcap and smallcaps compared to 40% earlier. Within banking, Pandey prefers Axis Bank among large private lenders, citing stronger loan growth and attractive valuations, while expecting the recent rate hike to improve private banks' profitability by around 4-5%. He also expects retail lending to grow 18-20% and the gold loan segment to expand by 40% among NBFCs.
