Public Sector Undertaking or PSU stocks have garnered significant attention from analysts, despite a 4.19% decline in June '24. This drop is largely attributed to the tighter-than-expected election results released on Tuesday. Nonetheless, the sector has experienced a 176.87% surge over the past five years, and analysts forecast the continuation of this upward trajectory.
"Entire PSU basket was a shunned area in the past. Modi government revamped the entire PSU space and made it a loved sector. PSU stocks are prominent among the ‘Modi group stocks'. Don't see big time selling in PSUs due to the strong order book," Dr CK Narayan, founder, NeoTrader, said at the NDTV Profit Invest 2029 event.
Kush Bohra, the founder of Kushbohra.com, concurred. According to him, while he would buy PSUs even at the current price, he remains selective while picking stocks.
Gautam Shah, founder of Goldilocks Premium Research, on the other hand is not a big fan of PSUs in the defence and the railway space.
Despite this, Shah said, "Continuity will still be there in the PSU sector."
Defence
While Narayan is constructive on PSUs, he said the defense sector has over-delivered in the last few years and will not lead the next up-move in the markets.
According to him, "Leader of a bull market cycle is never a leader in the next cycle." Such sectors don't tend to repeat the growth, he said.
What's Next For Markets?
Every investor is wondering where the markets will move next, and Narayan said, "We all wish 50,000 on Nifty becomes a reality in the next five years. Cycles may change, but they pretty much hold the same pattern."
Shah said the market reaction was emotional, but they made a matured comeback. The market will be a "stock pickers market" for the next six months, he said.
Gold
While the equity markets were setting new records until last week, Shah said that gold will most likely beat the returns from the equity market in the next one year. Metals will also outperform the Nifty in the next one year. he said.
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