Benchmark indices started the day with a cautious tone as global markets showed signs of increasing apprehension. The S&P BSE Sensex declined by 81.17 points to 84,591.85 by 9:22 am, while the NSE Nifty50 dropped 32.40 points to 25,877.65.
Dr. VK Vijayakumar, the Chief Investment Strategist at Geojit Financial Services, highlighted a growing cautious sentiment towards artificial intelligence (AI) in global markets. Concerns over inflated AI-related stocks, echoed by Google CEO Sundar Pichai, have led to a significant decline in the Nasdaq index. Despite some investors continuing to support AI investments, the overall market is wary of a potential bubble forming.
Vijayakumar suggested that the gradual and controlled correction in AI-heavy global markets could benefit India. If this trend persists, foreign portfolio investors might shift back to Indian equities, which have recently outperformed counterparts like South Korea and Taiwan.
While emphasizing safety, he recommended investors focus on large-cap stocks for better security, especially as many mid- and small-cap stocks appear overextended due to liquidity-driven rallies.
Prashanth Tapse, the Senior VP of Research at Mehta Equities, observed that the Nifty’s winning streak paused due to weak global cues, concerns over overvalued AI stocks, diminishing expectations of a US Fed rate cut in December, apprehension before US job data release, and ongoing FII selling. The Bank Nifty also cooled off after reaching a new high of 59,103.65.
However, Tapse noted that the anticipation of an India-US trade deal and a significant decline in India’s October inflation to 0.25% are helping mitigate downside risks. From a technical perspective, he identified key Nifty support at 25,740, with sustained strength required above 26,100.
Tapse viewed market dips as buying opportunities, suggesting Nifty accumulations between 25,750–25,800 with upside targets of 26,100–26,277. For Bank Nifty, he recommended buying near 58,200–58,300, targeting 59,577–60,300.
Regarding stock recommendations, he proposed Bharti Airtel, Polycab, Sun Pharma, and Nykaa as intraday buys during early weakness, while identifying Bajaj Finance as a key sell option with potential downside towards 995–951.