Nifty May Touch 26,000 In Two Months Despite Resistance, Says Hemen Kapadia

Benchmark index Nifty is likely to touch the 26,000 mark in the next two months despite some resistance, according to Hemen Kapadia, senior vice president of institutional equity at KR Choksey Securities.

Banking stocks and Reliance Industries Ltd. are expected to drive the rally in the key index, the ace market analyst told NDTV Profit.

The 50-share index closed at 25,010.60, up 187.45 points or 0.76%, on Monday, extending the rally for eight straight days and marking its longest gaining streak in a year.

On the Nifty 50 reaching an all-time high level, Kapadia suggested that investors should follow a stock-specific approach. “The previous all-time high is going to provide some resistance in the coming week. I think one should be stock-specific rather than market-specific. It is going to be a bit choppy, not the way the market has behaved today,” he said.

“Another bright spot is that the Nifty Bank is participating; HDFC Bank has a lot to do with it. Also, Reliance is waking up. That means there are good times ahead for the markets,” Kapadia added.

The market analyst said that while the Nifty touching the 26,000 mark might seem far-fetched, it is likely to happen in two months’ time, driven by Nifty Bank and Reliance Industries Ltd.

“The Nifty reaching 26,000 is slightly far away but sometime down the lane, in the next couple of months, I think there is a possibility. Given that Nifty has touched its all-time high of 25,078, I believe there could be a small dip. Nifty scaling from 25,800 to 26,000 probably seems on the horizon,” he said.

Kapadia sees a positive path for banking stocks. “I am slowly getting positive about the Nifty Bank. HDFC Bank was sort of holding it back and Kotak was too, while ICICI Bank was good. State Bank and Axis Bank have taken off as well but HDFC Bank has done what it has been promising to do for ages. I think Nifty Bank can surprise big time in the next couple of months,” he said.

On the other hand, the PSU Bank index will face some more consolidation, according to Kapadia.

“PSU banks are in hibernation. This is the sixth month of PSU banks being like this. Led by SBI, everything is taking a prolonged, protracted breather. There is some more near-term pressure. Factors like non-trending, negative overhang, corrective bias—everything seems to suggest some more time in price consolidation,” the analyst said.