Nifty might hit the 24200 stage in 2024, pushed by heavyweight shares from the BFSI, auto, cement and healthcare sectors, ICICIdirect has mentioned in its newest Quant Yearly Outlook report.
The Nifty was up by 119.10 pts or 0.56 per cent at 21,379.10 as of 11:30 am on Friday. The Nifty 50 pack was at 21,373.90, up by 118.85 factors or 0.56 per cent. Main shares that gained on the NSE as of 11:51 am have been Divi’s Laboratories, Tata Motors, Coal India, Maruti, and Tata Metal.
“Whereas the Lok Sabha elections in India and the Presidential elections in US might set off near-term volatility (spike) within the markets, declines are more likely to be restricted,” ICICIdirect mentioned.
The brokerage agency expects volatility to be sticky round present ranges within the coming months, and therefore, recommends shopping for on dips within the first half of 2024. US VIX and India VIX have did not maintain at increased ranges, suggesting the power of the fairness markets.
“Regardless of buying and selling close to highs and gaining virtually 7 per cent within the December collection, Nifty has delivered ~16% returns thus far within the final 12 months, which is comparatively on a par with different markets,” it mentioned.
Based on the report, FPIs, who’ve returned to the fairness markets since April 2023 as US charges appear to have peaked, purchased virtually ₹1,61,000 crore until August 2023. Greater FPI flows have been seen within the capital items, auto and energy sectors, whereas IT and metals remained subdued.
On the capital entrance, FPIs flows might improve additional within the upcoming calendar 12 months and US charge cuts ought to induce capital flows, the report mentioned.
The market has witnessed continued FPI flows for nearly 5 years from 2010 to 2014 because the US Fed has maintained zero rates of interest following the 2008 disaster. The free cash has helped danger belongings outperform the market, the brokerage mentioned.
Sectors to draw FPI inflows
The banking sector shares have largest headroom to soak up FPI inflows, whereas the metals sector would seemingly outperform in CY24. The financial institution nifty was the foremost driver of the bull run within the 2012 to 2020 cycle.
“We count on contemporary flows to proceed within the healthcare house, which ought to set off an additional outperformance within the months to return,” it added. Infrastructure sector ought to stay agency. Though monetary companies has been a relative underperformer, ICICIdirect mentioned current information advised a change within the development because the sector appears to be attracting FPI flows.
“Development associated shares have seen continued outflows and heavyweights from the sector have comparatively underperformed the market. Nonetheless, as a result of rate of interest minimize expectations, contemporary flows are seemingly in CY-24, which ought to propel an outperformance from the sector,” it mentioned.
The rupee has been resilient in opposition to the greenback in current months. Commenting on the greenback index, ICICIdirect says, “we count on the greenback index to weaken additional and capital flows ought to be seen in rising markets. Historic proof means that India can be a serious beneficiary of those flows.”
As per ICICIdirect, really useful shares embrace: Dalmia Bharat Cement, Federal Financial institution, GAIL, Hindustan Copper, IPCA Lab and Shriram Finance.
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