Historically, November has been among the most prosperous for the Nifty 50 and the overall Indian stock market. While writing this, Nifty 50 was trading at around 20,094.50, and Nifty November 2023 was trading at almost 19,889.70 points premium in the cash market. 

When Nifty crossed 19,000 a few months ago and subsequently crossed 20,000 in the subsequent few trading sessions, there was a lot of anticipation of it continuing its bull run. But that has not been the case, and Nifty, after touching the highs of 20,192 in September, even broke 19,000 in October. 

The last few sessions have been range-bound for Nifty 50, and it is expected to follow the same trend till the Assembly Election results are out in December. The states of Madhya Pradesh, Chhattisgarh, Rajasthan, Mizoram, and Telangana will undergo the Lok Sabha 2023 election polls in November, and the results will be out on December 3. The results will influence how the markets will fare in the next few months.

In addition, the recent geopolitical activities have added to the uncertainty across markets, and Nifty 50 had to bear the brunt, too. For the last few sessions, even DIIs (domestic institutional investors) and FIIs (foreign institutional investors) have played opposite roles in the market, which has further confirmed that the market is more likely to be in the consolidation phase, at least for the foreseeable future. 

General Nifty Outlook and Some Sectors to Keep an Eye On

Past data has suggested that Nifty has performed well before the general elections. For example, it went up by 13.7% in six months before the general elections 2014. Similarly, it jumped by 13.8% six months before the general elections in 2019. If the trend continues, we will likely see a jump in the stock markets before the election. 

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Nifty’s EPS is expected to grow to Rs. 1,075 in the next financial year. Even if we apply a P/E multiple of 20 (which is lower than the last 5 and 10-year average), the fair price of the index at 21,500 seems to be a promising possibility. It presents a significant upside for investors to enjoy.

But how do you ensure you enjoy this run? By investing in the right sectors and the right stocks. Here are some probable areas that are likely to outperform the broader market in the next few months – 

Insurance

Insurance remains one of the most underpenetrated sectors in India, and the COVID scare has propelled people to look at it. With so many innovative offerings and a renewed focus, we expect insurance to remain a prosperous option for the next few years. 

FMCG

FMCG has been on the roll for some time in the Indian scenario. The growing GenZ and their evolving purchase habits ensure room for growth in the FMCG arena still existing. 

Banking

Banking is one of the mainstays of the Indian economy, and while we are currently at the near-peak NIMs (net interest margins), we can expect the situation to improve in the upcoming months. A cleaner balance sheet with improved RoE and RoA can boost the stocks in the banking sector and propel them to good prices in the next few months.

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Investment strategies to end 2023 on a high and ensure a prosperous 2024 

Looking to invest in the stock market and ensure a prosperous 2024 for yourself? Here are some things to keep in mind –

  • Find a reliable discount broker – Discount brokers only offer investing services, which help them keep their prices reasonable for their services. 
  • Set a budget for yourself. You can invest a certain amount monthly or have an upper limit for investments made in a year. 
  • Diversify your portfolio across small, medium, and large-cap across sectors to minimize risk and optimize returns.
  • Focus on staying invested for the long term. 
  • Keep track of the latest news and rebalance your portfolio periodically for risk minimization.

So, we are expecting markets to remain attractive in the next few months, albeit with an air of uncertainty. During such times, betting on proven horses is better than fiddling with the unknown. 

This article has been written by Sidhavelayutham M, Founder and CEO, Alice Blue.

Disclaimer: Views and suggestions expressed above are personal opinions of the author. They do not reflect the views of financialexpress.com. Readers are advised to consult a SEBI-registered financial advisor before investing.