Siddhartha Khemka Recommends 4 Stocks To Buy In June As Nifty Near Record High Levels

For the third straight month, the Nifty index closed higher in May 2023 with a 2.6% momentum at 18,534. The benchmark is just a few points below the 18,888 record high that was set in December 2022. The Nifty Midcap 100 gained +6.2% in May, while the Nifty Smallcap 100 climbed +5.1%, surpassing the Nifty by a significant margin. For the third consecutive month, FIIs continued to be net buyers. May 2023 saw the largest FII investment in 2023 at Rs27,856 crore. However, after being buyers for the previous five straight months, DIIs turned out to be net sellers of Rs3,306 crores in the month.

Nifty Outlook

Commenting on the outlook of Nifty in June, Siddhartha Khemka Vice President - Head of Research of Motilal Oswal said "Nifty started the month on a bullish note and moved higher with a positive to range bound bias and it gave a strong closing above 18500 zones. There was minor dip towards its 20 DEMA in the third week of the month but later it witnessed strong buying at support of 18050 zones which lifted the mood and the index scaled higher. Nifty index witnessed strong momentum in the last week and it finally closed the month with gains of ~2.5%. On sectoral front, there was strong buying across most of the sectors like FMCG, CPSE, Realty, Auto, IT, Midcap and Metals while there was some pressure seen in Energy and Pharma but both the indices managed to close with marginal gains. However there was selling pressure witnessed in the PSU Banking space."

"Technically, Index respected the inverted head and shoulder pattern and moved higher as per expectation but pace of the momentum was slow after the strong run up of the last nine weeks. It formed a bullish candle on monthly scale and Nifty is forming higher highs from the last three months which indicates bullish setup. Major trend of the broader market is positive and supports are gradually shifting higher so any decline should be utilised as a buying opportunity. The overall chart structure indicates that the index is likely to scale higher towards its life high territory of 18888-19000 marks with good participation in midcap and smallcap stocks. A hold of 18333-18442 zones may see an up move towards 18888 and 19000 zones while on the flipside key supports are placed at 18181 and 18050 zones," Siddhartha Khemka further added.

Market Focus

"Domestic macro data were encouraging with India's real GDP growing by 6.1% in 4QFY23, mainly driven by investments and foreign trade. FY23 real GDP growth stood strong at 7.2%. GST collection grew 12% to Rs1.57 lakh crore in May'23, crossing the Rs1.5 lakh core for the 5th time since introduced. Q4 corporate earnings have been impressive with Profitability in line with our expectations. Nifty's earnings grew 16% YoY (vs. est. of +14% YoY) in 4QFY23. Financials and Auto drove corporate earnings, while Metals dragged aggregate profitability. Nifty ended FY23 with an 11% EPS growth on a high base of 34% growth in FY22. We expect the Nifty EPS to grow a healthy 20% in FY24 to Rs972," said Siddhartha Khemka.

"With the earnings season over, the market focus would shift to global as well as local macro events. RBI kept the repo rate unchanged at 6.50% on expected lines. Now the market would focus on the US Fed's upcoming policy meeting scheduled on 13-14 June," he further added.

Commenting on the which sectors are going to be in momentum in June, Siddhartha Khemka said "The overall market structure remains positive with Nifty gradually moving towards its previous life highs, supported by strong macros, healthy corporate earnings, lower volatility, and consistent FII buying. Further with IMD predicting normal monsoon this year despite EL Nino risk, would provide support to earnings. From a portfolio perspective, we are positive on Financials, Auto, consumption, Capex (Industrials, Capital Goods, Infra and Cement). Some of the niche sectors like defence, railways, new age fintech stocks are also likely to be in momentum."

Stocks To Buy In June

Siddhartha Khemka, Vice President - Head of Research of Motilal Oswal recommended 4 stocks to buy in June.

1. Buy Tata Consumer, current market price- Rs 801, target price Rs 910
2. Buy Zomato, current market price- Rs 77.57, target price: Rs 80
3. Buy Godrej Prop, current market price: Rs 1,427.65, target price: Rs 1575
4. Buy JK Cement, current market price: Rs 3,219, target price: Rs 3675

Disclaimer

The stock has been picked up by market analysts and is not a recommendation of either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.