Profit Booking Underway In Markets, Presents Buying Opportunity, Say Analysts

The current dip in the market is a result of profit booking after last week's historic highs and presents an opportunity to take long positions, according to analysts and experts.

Market expert Mehraboon Irani said the pullback should be used for buying as the market will witness "explosive growth" this year.

"We are going to see explosive growth in 2024. Everybody wants to buy; no one wants to sell. When such a scenario happens, markets go up in a hurry and complacency sets in. There could be profit booking," he said.

India's benchmark stock indices ended lower for a second day in a row on Wednesday, weighed by losses in index heavyweights such as HDFC Bank Ltd., Infosys Ltd., and Reliance Industries Ltd.

The BSE Sensex ended 0.75%, or 535.88 points, lower at 71,356.60, while the NSE Nifty 50 declined 0.69%, or 148.45 points, to close at 21,517.35.

Irani said that there are "great opportunities" in energy, mining and textiles, while pharma also looks favourable. He was bullish on Adani Group companies "that will create wealth for shareholders and the nation.".

"Selling pressure will continue for the next few days and we expect profit booking at current levels," said Kunal Shah, senior technical and derivative analyst at LKP Securities.

Shah expects the Nifty to go towards 21,300–21,400 on an immediate basis and the Bank Nifty to go to 47,000. "On the short term, they are bearish, but on the long term, the trend is very strong," he said.

The correction in the market is a good opportunity to go in for long-term positions. "The long-term target for Bank Nifty is 50,000 plus and for Nifty 22,000 plus."

In terms of key bets, Shah has set Apollo Hospitals Enterprise Ltd., which is close to a 52-week high, at a target of Rs 5,950–6,050 in the near term with a stop loss of Rs 5,650.

NCC Ltd., from the construction space, has set a target of Rs 185–192 and a stop loss of Rs 160. "We are seeing quality buying happening at a lower level on the technical charts."

For Bajaj Auto Ltd.—which surged nearly 5% on Wednesday, after news of a buyback proposal—he has set a target of Rs 7,200.

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