Nifty, Sensex Bullish As Heavyweights Lead Rally, Says Analyst

The benchmark indices, along with the broader markets, have maintained their positive up trend, backed by the strong performance of the heavyweight stocks, according to Ruchit Jain, lead research analyst at 5Paisa Ltd. Private sector banks and many information technology companies have recovered from lower levels, according to him.

The bullish trend in the banking sector will continue to be led by the heavyweights, he said. Nifty Bank achieved newer records by touching the 53,180 mark in the previous week, he said. “It witnessed minor correction in the past trading sessions, but it didn't break its important supports.”

82% of foreign institutional investors are invested in the index future segment along the long side. While, 34% is the only long short ratio of the client section which includes retail trades and high net worth individuals, he said.

FIIs' positions were formed before the expiry, according to Jain. They are placed comfortably with profits and no panic is expected which may lead to profit booking, he said.

Jain's top stock picks include Power Grid Corp. of India, at target of Rs 352 per share and stop loss at Rs 325 apiece and Tata Consumer Products Ltd. at a target of Rs 1,220 per share and a stop loss of Rs 1,090 apiece.

Indian benchmarks indices settled at fresh highs on Wednesday, tracking sharp gains in HDFC Bank Ltd. and ICICI Bank Ltd.

The NSE Nifty 50 settled 162.65 points, or 0.67%, higher at 24,286.50, and the S&P BSE Sensex ended 545.34 points, or 0.69%, up at 79,986.80.

Investors shouldn't worry about the benchmark indices except broader markets, according to G. Chokkalingam, founder and managing director at Equinomics Research Pvt., since they are entering another phase of bull market.

Small and mid-caps have outperformed the bourses from the past five years, while the NSE Nifty 50 and BSE Sensex 30 have performed badly, he said. “This is the time for them to correct."

There is a structural change in terms of new investors, as 10 crore new investors have entered the market, which will give more scope for the market to grow, according to Chokkalingam. There is more fear around the mid- and small-cap, rather than the benchmark indices and large-caps, he said.

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