Street signs: Nifty support seen at 17,400, Shipbuilding stocks zoom & more

Nifty support seen at 17,400
 

The markets remained under pressure throu­ghout last week as rising bond yields dampened investor sentiment. The Nifty50 index ended the truncated week at 17,476 — close to its 20-day exponential moving average of 17,450.

Technical analysts say the index could remain rangebound during the remainder of April series, with a slight negative bias. “From a broader perspective, the index may see a time-wise correction in the second half of the April series, with more opportunities in sector-/stock-specific momentum.

The immediate support for Nifty is placed around 17,370 and 17,275, and resistances seen around 17,755 and 17,850,” said Ruchit Jain, lead research analyst, 5Paisa.

Consumer stocks face headwinds
 

With markets expected to remain volatile, defensive bets, such as consumer goods, pharmaceutical, and information technology, tend to outperform.

However, this time around, the consumer pack seems to have fallen out of favour. Most fund managers, as well as sell-side analysts, are underweight on this space. They say rising input costs could pressurise margins. Also, elevated price-to-earnings multiples provide little valuation comfort.

Both Hindustan Unilever and Britannia Industries have underperformed the Nifty in the past six months. Analysts expect the underperformance to persist.

Shipbuilding stocks zoom
 

Shares of Cochin Shipyard, Mazagon Dock Shipbuilders, and Garden Reach Shipbuilders & Engineers have outperformed the market in the past month.

Strong order book, amid government focus on locally made defence vessels, has been seen as a key trigger. Analysts say public-sector shipbuilders have ample capacity to take up large orders. Also, the upcoming facilities under the newly embedded vision for 2030 programme will further augment outlook.

Market players say these counters provide opportunities - from a short-term trading, as well as a long-term investing, perspective.