Nifty to rally 18% in 2023, may hit 21500; pre-election year, 3rd year of decade bodes well for bulls | The Financial Express

Nifty to rally 18% in 2023, may hit 21500; pre-election year, 3rd year of decade bodes well for bulls

ICICIdirect sees Nifty at 21,400 in 2023. The target suggests 18%. The domestic brokerage cited a host of historical and technical trends that hinted at strong returns for Nifty next year.

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Nifty breakout above 13-month consolidation (18,300-15,200) is signalling a shift to higher orbit with projected target around 21,400 in 2023

The share markets are looking at the new year 2023 for positive returns: Going by historical data, the third years of the past four decades – meaning in 1983, 1993, 2003, and 2013, the markets rose. Analysts at ICICIdirect see a similar trend this decade. Nifty may offer 18% returns to investors in 2023, the brokerage said. The coming year being a pre-election year also bodes well for Indian equity markets as it has been observed that benchmark indices have performed relatively well in pre-election year. The brokerage has set a target of 21500 for Nifty in 2023, and it has also selected nine technical stocks for investment.

2023: Third year of decade, seasonality to favor bulls

According to analysts, bulls will be on the winning side in CY23 as it will be the third year of the decade and it has been observed in the past that markets grow in the third year of the decade. In 1983, Nifty delivered 7% return to investors, 28% in 1993, a whopping 73% in 2003 and 9% in 2013. Next year, analysts at ICICIdirect project Nifty to hit 21500, delivering an 18% median return to investors. “We believe the up move towards 21400 would be in a non-linear manner. The corrective declines should not be seen as negative instead should be utilised to build long-term portfolio,” it said.

Source: ICICIdirect

Pre-election year positivity

Another reason behind analysts’ bullish stance is the fact that 2023 is a pre-election year with general elections scheduled to be held in 2024. Election cycle is a major phenomenon in the equity markets, and it is divided into four parts – election year, post-election year, midterm years, and pre-election year. According to the ICICIdiect report, Indian equity markets have highlighted certain characteristics depending upon the election cycle that is currently prevalent.

It has been observed that benchmark indices have performed relatively well in the pre-election year. The Nifty index has generated positive returns in seven out of the 10 instances. Out of the years where it delivered negative returns, two were 1995 and 1998 when there was an unstable political scenario in India, while the other one was 2008, the year of global financial crises.


Stock picks for 2023

The brokerage divided the NSE universe of stocks into four categories – High Relative Strength, Multi-Year Breakout, Valuation Attractive, and Market Performer to pick the top investment bets for CY23. It believes that the top two buckets of high relative strength and multi-year breakouts have the highest potential for outperformance.

Source: ICICdirect

Top 9 stocks where you should put your money in 2023

Larsen & Toubro (L&T)
Entry range: Rs 2110-2185 | Target price: Rs 2520
Return: 16%

Ambuja Cements
Entry range: Rs 545-572 | Target price: Rs 660
Return: 17%

Entry range: Rs 16800-17800 | Target price: Rs 22,000
Return: 26%

Federal Bank
Entry range: Rs 132-140 | Target price: Rs 168
Return: 23%

Sundaram Finance
Entry range: Rs 2290-2420 | Target price: Rs 2,890
Return: 21%

Bajaj Electricals
Entry range: Rs 1110-1160 | Target price: Rs 1440
Return: 26%

KEC International
Entry range: Rs 460-490 | Target price: Rs 598
Return: 25%

Mishra Dhatu Nigam
Entry Range: Rs 215-230 | Target: Rs 295
Return: 31%

Techno Electric & Eng
Entry Range: Rs 305-320 | Target: Rs 410
Return: 30%

(The stock recommendations in this story are by the respective research analysts and brokerage firms. 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.)

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First published on: 22-12-2022 at 12:57 IST
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