Shillong, September 11: Apurva Sheth, Head of Market Perspectives and Research at SAMCO Securities, suggests that the banking and IT sectors have the potential to elevate the index from its current level.
However, it’s worth noting that the sectors that propelled the Nifty to 20,000 may not be the same ones to drive it to 21,500. While the Nifty has reached an all-time high, not all sectoral indices have followed suit, according to Sheth.
As per IANS, Nifty IT, for instance, remains over 17 percent below its peak levels. Sheth asserts that for the markets to make significant gains from their current positions, heavyweight sectors like IT cannot be left behind. Additionally, Bank Nifty is trading at a relatively attractive valuation.
With the Nifty crossing the psychologically significant 20,000-point mark, Sheth anticipates the next target to be 21,500, which is 3,000 points above the key breakout level of 18,500.
Despite the market’s new all-time highs, valuations remain reasonable. Nifty’s trailing twelve months PE stands at 22.39, just slightly above its long-term median of 20.62. This suggests that there is ample room for further expansion, especially considering the upcoming election year.
Rahul Sharma, Director and Head of Technical & Derivative Research at JM Financial Services, points out the emergence of new leadership in IT, Capital Goods, and PSEs. Even the BFSI sector, which faced significant pressure, is back in positive territory. Sharma believes the index is on track to reach 20,432 this month and 21,000 by Diwali.