scorecardresearch

Nifty aims 17500 in coming months, charts show support at 16000; Buy Reliance, SBI, TCS, ITC, HDFC, others

The sharp decline in crude oil prices coupled with industrial commodities and cool off in India VIX highlights improvement in market sentiment that augurs well for extension of ongoing rally

NSE Nifty, BSE Sensex
The Nifty midcap and small cap indices also mirrored the move in benchmark and staged a pullback after approaching price-wise maturity

Domestic equity market benchmarks BSE Sensex and NSE Nifty 50 were trading over 1 per cent higher on monthly F&O expiry day. Today’s jump in the market came after the US Fed chair Jerome Powell dismissed chances of a recession, and went on with a 75 bps interest rate hike. NSE Nifty 50 soared 1.2 per cent or  200 points to a day’s high of 16,856.30. Analysts at ICICI direct Research said during the past one month, equity benchmarks have staged a strong comeback, fueled by weakening of momentum in crude oil and fall in industrial commodities. Analysts have upgraded their Nifty target of 16600 to 17500 for the coming months, maintaining the strong support at 16000. 

Why 17500 looks optimistic? 

Analysts advised investors to use dips as an incremental buying opportunity. The research firm noted that since October 2021 peak of 18600, on two occasions post falling channel breakout Nifty has retraced 80% of preceding corrective phase. At current juncture, a similar breakout has panned out and we expect Nifty to maintain the same rhythm and head towards 17500 being 80% retracement of two month decline (18100-15200). It also added that since 2008, on six occasions index has formed a durable bottom after the percentage of stocks above 200 DMA (Nifty 500 universe) has touched the extreme low reading below 15. Subsequent rallies in each of these instances measured minimum 20% from lows.

The report further noted that the sharp decline in crude oil prices coupled with industrial commodities and cool off in India VIX highlights improvement in market sentiment that augurs well for extension of ongoing rally. The Nifty midcap and small cap indices also mirrored the move in benchmark and staged a pullback after approaching price-wise maturity of 25% and 40%, respectively, ICICI direct Research added. 

Top sectors, stocks to buy

BFSI: State Bank of India (SBI), Axis Bank, Housing Development Finance Corporation (HDFC), Canara Bank, Bajaj Finance, Sundaram Finance

IT & Telecom: Infosys, TCS (Tata Consultancy Services), Reliance Industries (RIL), L&T Infotech, Coforge, Happiest Minds, KPIT Technology

Capital goods: L&T, ABB India, BEL, Siemens, Thermax, SKF Bearing, Ingersoll-Rand India, KSB 

Consumption & Retail: ITC, Asian Paints, Titan Company, Havells, KKCL, Trent, TTK Prestige, Astral

Auto: Maruti Suzuki India, Ashok Leyland, Gabriel India, MM Forging, Minda Inds, Balkrishna Industries

Infra and Realty: Ultratech Cement, DLF, Brigade Enterprise, Phoenix Mills

Pharma & Chemicals: Sunpharma, Dr Reddy, Abbott India, Aster DM, Caplin Point, Navin Fluorine

Metal: Tata Steel, JSW Steel, Hindalco Industries, Coal India, JSL

Others: Adani Port, Indian Hotels, Mahindra Holidays, TCI Express, Greaves Cotton, Philips Carbon, Kajaria Ceramics, Dr Lal Path, Concor

The stock recommendations in this story is by the respective research analyst and brokerage firm. Financial Express Online does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.