NSE Nifty 50 will likely add 800 points in the next three months to hit 18,600 by the end of the year 2021; while Bank Nifty may rise another 1,400 points to reach 39,400 by December end, analysts say. The structural uptrend of Nifty 50 looks intact, ICICI Direct said in a research note. The brokerage firm sees BFSI, IT, telecom, auto, capital goods, realty and infrastructure stocks contributing the most to the Nifty 50 gain. Nifty 50 is on a record setting spree, rising to just shy of 17,800 in morning deals on Friday. The 50-share Nifty has added nearly 600 points, or 3.4 per cent, so far in September.
NSE Nifty 50: Target 18,600 by December-end 2021
Indian equities are in the middle of a multi-year secular bull cycle, the note said. The technical setup suggests that Nifty may maintain the rhythm of rallying at least 32 per cent from April lows of 14,151 to 18,600 by December — like recent major rallies, it said. An intermediate correction of 5-6 per cent towards the 10-week average would offer incremental buying opportunities to the investors. Nifty rallied 32 per cent during March-April last year; 34 per cent during June-August; and 35 per cent during October 2020-February 2021. “The index followed a specific rhythm since April 2020 where the magnitude of each major rally has been at least 32%, containing in-between corrective phases of 5-6%. The current rally since April 2021 lows of 14,151, so far has gained 23%,” ICICI Direct said.
Bank Nifty: Target 39,400 by December-end 2021
Bank Nifty index has registered a breakout above the last three months broad range (34,000-36,300), indicating a resumption of up move. “Going ahead, we expect the index to accelerate its positive momentum and rally past its previous all-time high (37,708) and head towards 39,400 levels in CY21 as it is the 123.6% external retracement of the entire previous decline (37,708-30,406),” the note said. The ‘buying on declines’ strategy has worked well over the past 15 months; hence, any breather in the coming week would offer an incremental buying opportunity in quality banking stocks, it added.
These sectors, stocks may help pocket gains
BFSI: HDFC, Kotak Mahindra Bank, SBI, Canara Bank, Bajaj Finserv, M&M Finance
IT & Telecom: TCS, Tech Mahindra, Reliance Industries Ltd (RIL), Bharti Airtel, Mphasis, LTTS, Firstsource
Consumption: Asian Paints, Titan, Pidilite, Varun Beverages, Dixon Technologies, Havells, Trent
Auto: Tata Motors, Ashok Leyland, Escorts, Balkrishna Industries, Minda Industries
Capital goods: L&T, Siemens, HAL, BEL, Grindwell Norton
Metals: Tata Steel, Hindalco, SAIL, Tata Metaliks, Vardhman Speciality Steel
Infra and Realty: Concor, KNR Consts, Orient Cement, DLF, Brigade Enterprises, Godrej Properties
Healthcare: Divis Laboratories, Cipla, Sun Pharma, Laurus Labs, Abbott India, Fortis Healthcare
Chemicals: Navin Fluorine, Deepak Nitrite, Tata Chemicals, PI Industries, Nocil
Others: Gujarat Gas, Butterfly, Interglobe Aviation, Balrampur Chini, Indocount Industries, Gateway Distriparks
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