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Canara Bank and Punjab National Bank may gain 30-35% in a bull case, says Nuvama
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PSU banks likely to outperform private banks over the next six months, says Manav Chopra
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Small-cap stocks and sectors like tyres, infra, auto, and small banks show improving outlook
Nuvama Institutional Equities believed that Canara Bank Ltd. and Punjab National Bank have the potential to report 30–35% gains in the bull case scenario, according Manav Chopra, executive director, technicals. The brokerage is highly constructive on public-sector banking space, in which Canara Bank and Punjab National Bank are the top choices.
Chopra said that PSU banks probably outperform private banks. Nuvama Institutional Equities does not expect a cool down in PSU bank stocks at least for next six months.
He also believes that the outlook has started to brighten for small-cap stocks. Smallcap stocks have been underperformer. A bottoms-up approach in this space is becoming visible. Tyres, smallcap-infra and auto stocks are expected to give good returns. Small banks are also seeing traction. The theme will be bottoms-up in this space.
Nifty's Medium-Term Target At 26,000–27,500
Nuvama Institutional Equities remained very constructive on the markets. The brokerage believes that Indian markets will continue to gain going forward. There are some macroeconomic factors shaping up well for India, he said in an interview to NDTV Profit.
A pack of IT, infrastructure, and some beta stocks will take the NSE Nifty towards 27,500. The medium-term target is 26,000–27,500, he said.
In IT, there are still shorts and under-ownership. Chopra also believes that infrastructure will also do well. Reliance Industries Ltd., Larsen & Toubro Ltd., and Adani Ports and Special Economic Zone Ltd., which are still under-owned in terms of weightage with the institutions, are going to do well. Stocks belonging to the consumption space will also do good, he said.
Market participants have already seen green shoots, which is why the NSE Nifty 50 hit a new high. A combination of shorts and under-ownership will take the markets higher, Chopra said.
South Korea's KOSPI and Taiwan's TAIEX have recorded significant gains. The expectation is the money will likely shift out of these markets and flow into Indian markets, according to him.
In the emerging-market basket, India remains underweight across foreign institutions, he said.
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