Day trading guide for today: Infosys, Yes Bank, Tata Power are among the intraday picks for December 14

 

• Better-than-expected CPI inflation data yesterday fueled a favorable rally in Indian markets, IT stocks finally halted their 7-day losing streak and PSU banks further extended their gains.

On Wednesday, in early session, Asian shares tracked Wall Street's gains after US inflation data came in higher than expected. The cooling in US inflation has raised hopes of a dovish stance from the US Federal Reserve which will present its policy results later in the day. Indian markets are likely to perform on similar lines and extend their previous day's rally. Also, SGX Nifty traded on a higher note indicating a positive opening for domestic equities as well.

Yesterday, better-than-expected CPI inflation data fueled a favorable rally in Indian markets, with IT stocks finally halting their 7-day slump and PSU banks further extending their gains. The Sensex remained above the 62,500 mark and the Nifty 50 above 18,600 - indicating the beginning of a recovery from the selloff of the past few days.

Sensex closed 402.73 points or 0.65% higher at 62,533.30. Meanwhile, the Nifty 50 closed at 18,608 on Tuesday, up 110.85 points or 0.6%. After seven consecutive days of losses, IT indices on both BSE and NSE have gained over 1.1% each. Nifty PSU Bank climbed over 3.8%, while private banks, financial, auto and capital goods stocks also registered significant gains. Overall, Bank Nifty gained around 238 points. Besides, at the interbank forex market, the Indian rupee depreciated to 82.8050 against the US currency as compared to the previous day's close of 82.53.

Top bulls IndusInd Bank, Bajaj Finance, Infosys, HCL Tech, M&M, TCS, Tech Mahindra, Bajaj Finserv and UltraTech Cement were the top gainers.

US inflation data that came out late yesterday was around 7.1% - well below the consensus estimate of 7.3%. This brings a sign of relief among investors as they anticipate a 50 bps hike from the Fed in the upcoming policy---which will be lower than three consecutive 75 bps hikes in previous policies.

In early deals on Wednesday, shares in broader counterparts in Asia such as Hong Kong, Japan, South Korea and Australia were seen with upside in US equity futures as well. However, shares in Mainland China were on a volatile note. On the day, among the most anticipated key factors will be the US Fed's stance on inflation going forward, the economic outlook and their rate results. Most are expecting a rise in Asian shares after the US eased the inflation print.

Meanwhile, the Sensex and Nifty 50 have already reacted positively after India's consumer price index (CPI) inflation fell to an 11-month low of 5.88% in November - the first time since December last year. is below the upper tolerance limit. US inflation data and expectations of a small-sized rate hike by the Fed are likely to weigh on sentiment today.

Dr V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services said, "The lower than expected November CPI inflation in the US which came in at 7.1% YoY and only 0.1% MoM confirms the market expectation that the Fed will only hike rates .50 bp today. The consensus terminal fed funds rate is now a little under 5%, which is a market positive."

Vijayakumar, however, added that since a recession in the US is a high probability event in 2023, a market rally is unlikely. In India, the PSU Bank segment is the strongest segment within the Bank Index and the Bank Index and may remain resilient. The HDFC twins display power. The recovery in the IT segment is going to pick up some more pace. Another positive is the resumption of FII buying.

For Wednesday, Geojit strategist said Nifty is unlikely to break out of 18,400-18,800 range and sustain higher. "Higher valuations are likely to put a stop to the rally," he added.

Meanwhile, Mitul Shah, Head of Research, Institutional Desk, Reliance Securities said, "Markets are likely to open gap up; SGX Nifty is up 203 points compared to previous spot Nifty closing. Asian markets are trading in green; The Nikkei is up 0.7% while the Hang Seng is up 0.1%."

Here are the intraday calls for Wednesday by the experts:

, Vice President - Technical Research, Prabhudas Lilladher:

- Buy Naukri (Info Edge) at ₹4160 with a stoploss of ₹4100 for a target price of ₹4280

- Buy Bajaj Finance at ₹6620 with a stoploss of ₹6530, target ₹6800

Anuj Gupta, Vice President - Research, IIFL Securities

Buy Yes Bank with a stop loss of ₹16 and a target price of ₹30.

- Buy Suzlon Energy with a stop loss of ₹8, target price of ₹13

Ravi Singh, Vice President and Head of Research, SHARE India

- Buy Infosys at ₹1570 for a target price of ₹1600 with a stop loss of ₹1550

- Buy Tata Power at ₹220 with a stop loss of ₹210, target ₹235.

Sumeet Bagadia, Executive Director of Choi