Indian Stocks Tumble: MarketSmith India Picks Eternal, Asian Paints Amid Selloff

Indian Equities Extend Losses Amid Tariff Fears and Outflows

Indian equity benchmarks Sensex and Nifty 50 concluded Friday's trading session in negative territory for the fifth consecutive day. This sustained decline was driven by a confluence of renewed concerns over potential U.S. tariffs, investor caution ahead of the upcoming second-quarter earnings season, and persistent foreign institutional investor (FII) outflows.

The benchmark Sensex plummeted 605 points, or 0.72%, to close at 83,576.24. The broader Nifty 50 index mirrored this weakness, falling 194 points, or 0.75%, to settle at 25,683.30. Midcap and smallcap segments also suffered, with the BSE Midcap index shedding 0.90% and the Smallcap index declining a steeper 1.74%. Over the past five trading sessions, the Sensex has lost approximately 2.5%, with the Nifty 50 experiencing a similar cumulative decline.

Investor Wealth Erosion

The extended sell-off has significantly impacted investor sentiment and wealth. Total market capitalization for firms listed on the Bombay Stock Exchange (BSE) has fallen below ₹468 trillion, down from over ₹481 trillion at the start of January. Investors have collectively lost over ₹13 trillion in just five days, with more than ₹4 trillion erased on Friday alone.

MarketSmith India Recommendations

Amidst this prevailing bearish sentiment, MarketSmith India, a stock research platform, has identified two companies for potential investment.

Stock Picks: Eternal Ltd and Asian Paints Ltd

MarketSmith India has recommended a 'Buy' for Eternal Ltd, currently trading around ₹285. The platform cited the company's strong brand, consistent revenue growth, expanding customer base, asset-light model, and improving profitability. Key metrics include a P/E of 915.17 and a 52-week high of ₹368.45. The recommended buy range is ₹282–288, with a target price of ₹318 and a stop-loss at ₹270.

The research firm also issued a 'Buy' recommendation for Asian Paints Ltd, priced at ₹2,838. Strengths highlighted include its dominant market share, extensive dealer network, strong pricing power, and consistent growth, alongside a low-debt balance sheet. Asian Paints has a P/E of 71.24 and a 52-week high of ₹2,985.70. The suggested buy zone is ₹2,820–2,850, with a target of ₹3,050 and a stop-loss at ₹2,750.

Market Breadth and Sectoral Performance

Friday's trading session saw broad-based selling across most sectors, reflected in weak market breadth. The advance-decline ratio was sharply negative, with significantly more stocks declining than advancing. While defensive sectors like IT and Oil & Gas offered marginal support, cyclical and consumption-oriented sectors bore the brunt. Real Estate emerged as the worst performer, followed by Financials, FMCG, and Auto stocks. Banking stocks, particularly private lenders and non-bank financial companies, were significant drags, although public sector banks showed some resilience.

Technical Outlook

Technical indicators suggest a cautious outlook. The Nifty 50 has breached its 50-day moving average (DMA) and the crucial 25,700 level on increased volumes, signaling the start of a corrective phase within the larger uptrend. Immediate support is seen at 25,500, with a stronger demand zone near 25,300. For the uptrend to resume, the Nifty needs to reclaim and hold above 26,000. The Relative Strength Index (RSI) has dipped below its trendline, indicating weakening bullish momentum, while the MACD shows a slowdown in trend strength.

Nifty Bank Performance

Nifty Bank also traded with a weak undertone, closing down nearly one percent. Technical indicators for Nifty Bank show a loss of bullish momentum, with the RSI near 47-48 and the MACD in sell mode. Despite this short-term weakness, the index is still considered in a 'Confirmed Uptrend' based on O'Neil's methodology, suggesting a consolidation phase rather than an outright reversal. Near-term support is identified around its 50-DMA.