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Indian equity markets are witnessing strong momentum following the Diwali and Samvat Mahurat trading sessions, supported by heavy foreign institutional investor (FII) inflows, stable macroeconomic conditions and buying across sectors, Hemang Gor, Senior Research Analyst Derivatives & Technical Research at Axis Direct, said.
Speaking to ANI on Monday, Gor said positive corporate earnings and strong foreign investment have supported the recent market rally, with investors factoring in quarterly results. "If we look in just one week of time, FIIs have significantly bought almost 48,000 crore in this last week. So that's a very big number... this is probably the highest buying side as of now," Gor said. He added that strong FII inflows have helped stabilise the rupee against the US dollar, while the benchmark Nifty index gained nearly 1,900 points during the week. Gor said factors such as short covering and stable crude oil prices have further supported market sentiment and encouraged buying in select sectors. On sectoral opportunities, he identified banking, automobile and pharmaceutical stocks as areas with strong earnings visibility and positive technical indicators. "Banking still has a steam to go," Gor said, naming HDFC Bank, ICICI Bank and State Bank of India (SBI) among his preferred stocks in the sector. In the automobile segment, he said lower crude oil prices could support the sector and highlighted positive technical trends in select stocks. "Mahindra & Mahindra has given a good breakout... The same follows from the two-wheeler side, Bajaj Auto and Hero Honda," he said. Gor also pointed to continued strength in pharmaceutical stocks, particularly Dr. Reddy's Laboratories, Laurus Labs and Aurobindo Pharma. However, he advised investors to remain cautious about the information technology (IT) sector, which could see some profit booking or consolidation. "IT is the only sector which I think is likely to show a bit of nervousness or caution," he said. Looking ahead, Gor said the market outlook remains positive over the next six to 12 months and advised retail investors to follow a disciplined investment approach rather than chase short-term market movements. He recommended using market corrections as an opportunity to accumulate fundamentally sound stocks available at attractive valuations. "Any dip, I think, should be used as an opportunity to add some stocks which are cheap by valuation," Gor said. He added that the positive market momentum is expected to continue in the run-up to the Union Budget. (ANI)
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