The stock market seems to be moving towards record highs after a strong festive season. Positive investor sentiment and growing hopes of a trade deal between India and the US have brought back optimism to Dalal Street.
After weeks of steady growth, benchmark indices are now showing signs of reaching fresh all-time highs, with investors looking for the next big opportunity.
Gaurav Sharma, Associate Vice President and Head of Research at Globe Capital, said that the market’s upbeat mood is linked to progress in trade discussions between India and the US.
He said that Commerce Minister Piyush Goyal’s recent visit to the US and meetings with American officials have strengthened hopes of a deal.
“I think it’s basically the outcome of the fact that we are nearing a deal. India and the US are nearing a deal. Piyush Goyal has visited and met a lot of American counterparts. And if that deal happens, IT and pharma will be the most to gain out of it because they were the ones impacted the most,” he said.
Sharma pointed out that the IT index has seen a rare surge of 2%, driven by renewed optimism. “It’s been such a rough year for IT. Infosys gaining 3% is not a surprise. The company earns a large part of its revenue from the US. As we get closer to the deal, IT stocks are gearing up for an upmove,” he explained.
He also said that Infosys shares are gaining strength partly because the company’s promoters are not participating in the ongoing buyback. “This has raised hopes that more retail investors will be able to tender their shares, which is supporting the stock’s rise,” Sharma added.
Apart from IT and pharma, Sharma highlighted that the auto and banking sectors also look promising. “We are optimistic on some of the auto names. We remain bullish on Mahindra & Mahindra from the four-wheeler segment and Hero MotoCorp in the two-wheeler space,” he said.
In banking, Sharma believes the large public sector banks still have room to grow. “We are bullish on SBI, Canara Bank, and Bank of Baroda. The smaller ones can also be considered for short-term trading. But for the long term, SBI and Canara Bank remain our top picks. HDFC Bank is already at its lifetime highs, but we expect it to deliver strong results in the next two quarters,” he said.
When asked about other strong areas, Sharma mentioned Titan as one of their top Diwali picks. “Titan remains one of our favourites. We are also bullish on the housing finance sector, as we expect a better recovery there. The impact of the 1% repo rate cut will now start to reach the end users, which usually takes about two quarters. We expect housing finance companies to perform well in the coming months,” he said.
According to him, Aptus and LIC Housing Finance are among the key stocks to watch in this space. “We are bullish on both Aptus and LIC Housing. The real estate sector is showing signs of improvement, and these companies are well-positioned to benefit from it,” Sharma said.
With the festive season demand boosting sales and the market showing steady momentum, analysts believe the coming weeks could take the indices to new highs. However, experts also advise investors to remain selective and focus on sectors that have strong growth potential and sound fundamentals.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)
