The broader market remains in a bull phase despite the recent consolidation in the benchmark indices, according to Manav Chopra, Executive Director at Nuvama Institutional Equities. Chopra said while speaking to NDTV Profit that the strength in the equal-weight index, Next 50 and small-cap and mid-cap stocks suggests that the current phase is a correction within a larger bull market rather than a structural breakdown.
Chopra pointed out that the Nifty Equal Weight Index has already recovered its entire decline and touched a fresh all-time high. The Next 50 and SMID segments are also at record levels, while the NSE 500 remains close to its peak.
Nifty 500 Could Gain 15-25%
Rather than focusing only on the Nifty 50, Chopra said he prefers the Nifty 500 as a broader gauge of market strength, given its representation of around 97% of total market capitalisation.
He expects a 15-25% upside for the Nifty 500 over the next 12-15 months once the market confirms a breakout above the 24,500 level on the Nifty. According to him, the ongoing consolidation is helping markets build higher bases before the next leg of the rally.
Chopra remains particularly bullish on small and mid-cap stocks, with auto ancillaries, mid-sized private banks, NBFCs, microfinance, healthcare and capital goods among his preferred segments.
Tyres, Chemicals Among Turnaround Bets
The tyre segment could see a sharp turnaround if there is further de-escalation in global tensions and crude prices continue to ease, Chopra said. He noted that crude has formed lower peaks during successive phases of escalation, while several tyre stocks have held their recent lows and are showing signs of accumulation.
International rubber prices also appear to be topping out, adding to the positive setup for tyre companies. Chopra expects several stocks in the segment to retest their previous all-time highs and potentially move another 20% higher.
He also remains bullish on auto ancillaries, although the space may consolidate after its strong performance over the past six months.
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Private Banks Seen As Key Market Leaders
BFSI remains Chopra's preferred leadership sector. He highlighted a breakout in the Nifty Private Bank-to-Nifty 50 ratio after nearly five years of underperformance, suggesting the private banking sector could sustain its relative outperformance.
He expects the private banking index to rise from around 27,000 towards 32,000. Within the space, he remains positive on Axis Bank and ICICI Bank, while seeing further upside potential in mid-sized names such as RBL Bank and IDFC First Bank.
For the Bank Nifty, Chopra sees 58,500 as an important trigger. A sustained move above that level could take the index towards 63,000-64,000.
For his dark-horse bets, Chopra favours a combination of tyres, chemicals and mid-sized private banks.
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