Rupee at record low, MPC caution drag Nifty; check strategy, stock picks

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Nifty share price:

Markets witnessed a volatile session and ended marginally lower, extending the ongoing consolidation phase. After a flat start, the Nifty drifted gradually lower in early trade and then remained range-bound for most of the session. A late rebound in the last half hour helped trim losses, and the index eventually settled at 25,986. Sectorally, most indices traded under pressure, with auto, energy, and FMCG leading the decline, while resilience in IT and a recovery in private banks helped limit the downside. The broader markets were comparatively weaker, with the midcap and smallcap indices declining in the range of 0.71 per cent to 0.91 per cent.

 

Sentiment was dampened by a weakening rupee, which hit a record low of 90.13 against the dollar, heightening concerns around import costs and triggering FII outflows. In addition, caution ahead of the MPC meeting and mixed global cues added to the subdued mood. Although the Nifty slipped below the crucial short-term support of the 20-DEMA around the 25,950 level during the session, the closing-hour recovery helped it reclaim this level. The rebound in private banking heavyweights and continued strength in IT were encouraging, but their sustainability will be the key for any meaningful recovery; otherwise, the corrective phase may extend. Meanwhile, participants should manage position sizes prudently and maintain a selective approach—favouring IT and pharma for long trades while considering opportunities in rate-sensitive pockets on dips.

Stock recommendations by Ajit Mishra, Religare Broking

Dr. Reddy’s Laboratories Limited | LTP: ₹1,280.70| Recommendation: Buy | Target: ₹1,370| Stop-loss: ₹ 1,230

The pharma sector continues to display strength, and DRREDDY is moving in tandem with this trend, showing renewed buying interest. The stock recently rebounded from its key long-term support—the 200 WEMA—after which it underwent a corrective decline within a downward channel. It has now broken out of this channel, indicating an end to the corrective phase and a potential resumption of its uptrend. Investors may consider accumulating the stock within the suggested range.

Tech Mahindra Limited | LTP: ₹1,541.70| Recommendation: Buy | Target: ₹1,640| Stop-loss: ₹1,485

Tech Mahindra is showing firm bullish momentum, supported by a decisive breakout above short-term moving averages along with increasing volumes. The emergence of a higher-low structure and a steady rebound from the recent consolidation zone reflect rising buying conviction. The broader technical setup points to accumulation and improving market participation, reinforcing a constructive near-term outlook. Long positions remain justified at current levels, with expectations of continued upside traction.

LIC Housing Finance Limited | LTP: ₹551.9 | Recommendation: Sell Futures | Target: ₹520| Stop-loss: ₹565

The housing finance segment continues to lag within the broader financial space, and LICHSGFIN has been reflecting this weakness. The stock has maintained a persistent lower-top, lower-bottom structure while trading below key long-term moving averages. Each brief pause has resulted in renewed selling pressure, and the recent rejection from the neckline of the prior consolidation band and the 20-day EMA has created a fresh shorting setup. With the bearish structure intact, the stock is likely to extend its downside, making it a suitable candidate for short positions.

(Disclaimer: This article is by Ajit Mishra, SVP – research, Religare Broking. Views expressed are his own.)