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Nifty expected to trade around 18,400-18,880 in coming week: Sanjiv Bhasin

Realty, capex, consumer and select banks could outperform, going ahead, Sanjiv Bhasin, director at IIFL Securities told Mint’s Asit Manohar. Talking about overall market performance, he said hew highs will be seen in December with some days of consolidation as December historically sees good returns.

Here are edited excerpts from that interview:

Exuberance in global markets and return of FII money led Indian benchmark indices to hit a high on November 24. What is your reading of market movement this week?

It was a FOMO (fear of missing out) moment for foreign investors, who succumbed to global cues and sold Indian equities leading to Nifty’s fall to 15,200. But they soon realised the strength of the retail investor who put his money where his mouth is and made Sensex the best performing index, globally. Stronger than expected corporate results with banks & auto leading from the front saw demographic premium become the strength for Indian stock markets.

Where do you see the indices in the coming week?.

New highs will be seen with consolidation as December historically sees good returns as most news gets discounted with the Federal Reserve also indicating that rate hike in December will be 50 basis points which sees the USD fall & emerging markets tend to do well. China cutting the CRR indicates that the problem on ground has escalated since the return of Covid, making India the most expensive yet reliable market for foreign investors.So, 18,400-18,880 could be the levels expected for next week with Bank Nifty having a shot at 43,700.

The IT and banking sectors saw a strong performance this week. Are these long-term bets? Any favourite sectors?

Yes, IT has made a strong comeback as inflation and attrition fears recede with valuations the cheapest this year.Banks have been the outlier in the past 3 months with PSU banks seeing the best in over 5 years as scramble to buy mid & small cap banks sees stock prices jump anywhere from 25-125%.The liability side is holding well for banks with credit growth strong & write backs in infrastructure book adding to the kitty.However, we think realty, infrastructure capex stocks & Cement could be outperform in near term.

Broader markets have not participated in this rally. Any reason?.

Normally, the first leg of buying by foreign investors is in large cap followed by local buying by retail into mid & small caps which has seen PSUs do very well & which could see more institutional participation as ETF flows get directed into buying.

What are the sectors that are expected to outperform?.

Realty, capex, consumer and select banks could outperform with IT being the dark horse as inflation in the US and the Federal Reserve rate action peaking in early 2023.

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