IT Stocks, Banks To Lead Further Market Rally, Say Experts
A good rally can be expected in large-cap IT stocks in the coming few months, said Elixir Equities' Dipan Mehta.
There is a broad-based rally in Indian equities and more advances are yet to come with information technology and banks are likely to lead gains, according to experts.
Indian benchmark indices surged to a record high and ended higher for the seventh consecutive week on Friday, with the NSE Nifty 50 settling 1.29% up.
"We are seeing a broad-based rally. Banks have also taken off," Aamar Deo Singh, head of advisory at Angel One Ltd., told NDTV Profit. On the upside, Nifty is likely to meet resistance at 21,450, while on the downside, support is around 21,150–21,200 levels, he said. "The overall trend is positive and bullish."
The Bank Nifty, which recently reached an all-time high, can see support at 47,300–47,400 and resistance on the upside at 48,500 levels, Singh said.
The performance in IT stocks was triggered by optimism that the U.S. Federal Reserve will start loosening monetary conditions in 2024, said Dipan Mehta, founder and director of Elixir Equities Pvt. "Many positive factors have confluenced together, leading IT stocks to move up... Large-cap IT has a lot to catch up on."
A good rally can be expected in large-cap IT stocks in the coming few months, Mehta said. "Although, medium to long term, our preference is in mid-cap IT."
The Nifty IT hit a 20-month high at 35,349 on Friday, closing 4.56% higher. All constituents saw their scrip advance. HCL Technologies Ltd. and Tata Consultancy Services Ltd. were among the top gainers in the broader Nifty 50.
Rail Stocks 'Wait-And-Watch'
There is a new growth story in the railway sector, which is likely to benefit with more government spending on railway infrastructure, Mehta said. "They are great short-term bets, but on short-term, it is wait-and-watch."
Texmaco Rail & Engineering Ltd., Jupiter Wagons Ltd. and Indian Railway Finance Corp. were among rail stocks that advanced through Friday.
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