Market Rally Yet To See Participation From Large-Cap Stocks, Say Experts

The current bull rally remains positive and is yet to see participation from big names, according to market analysts.

During a bull run, it is better not to attempt the immediate top, said Ruchit Jain, lead research analyst at 5paisa Capital Ltd. "This upmove is not only being led by the broader market, and there are large-cap pockets where the rally has not yet started."

Companies like Reliance Industries Ltd., HDFC Bank Ltd., Tata Consultancy Services Ltd. and Infosys Ltd. have huge weightage in the index but still have not seen the run the markets have witnessed, Jain said.

"Over the next 6–12 months, assuming that the current government will continue after the 2024 elections, we may see 8–10% upside on Nifty and Sensex," according to Sunny Agarwal, head of fundamental equity research at SBICAP Securities Ltd.

It is very hard to find a value at the current levels as they have risen significantly, Agarwal said.

Benchmark indices resumed their uptrend on Thursday as the U.S. Federal Reserve raised hopes of a rate cut next year in its meeting on Wednesday.

Both the Nifty 50 and the Sensex hit fresh lifetime highs of 21,210.90 and 70,602.89, respectively.

Both indices recorded their highest closing levels as well. The Nifty 50 jumped 256.35 points, or 1.23%, to close at 21,182.70, while the Sensex was up by 929.60 points, or 1.34%, to close at 70,514.20.

The trend for the market remained positive, Jain said. "FIIs who have been net sellers in cash and index futures have now turned net buyers in the last 15 days."

The next resistance target for the Nifty is around 21,370–21,400, Jain said.

The current rally in power finance companies, like REC Ltd., PFC Ltd., and Indian Renewable Energy Development Agency Ltd., is purely a fund flow-driven rally, according to Agarwal. Buy-on-dips could be a good strategy to enter at the current levels for power finance stocks, he said.

The rally seen in the entire public sector company space is driven by the robust order book, and the oil and gas story will continue for another five years, Agarwal said.

Information technology has started participating in the rally. While public sector unit banks are yet to see up-moves from the current levels, metals are looking positive, Jain said.

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