Nifty50 likely to hit 18,600 in CY2021 – 60 stocks from 9 sectors in Nifty500 to lead next bull run, says ICICI Direct

While the NSE Nifty50 hit an all-time high of 17,644.60 on Thursday, it is poised well to achieve levels of 18,600 by the end of Calendar Year (CY) 2021 according to a report published by ICICI direct.  

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Nifty 50 has gained 23 per cent from the lows of 14,151 it hit in April 2021, the report said.  

The index has followed a specific rhythm since April 2020 wherein the magnitude of each major rally has been around 33 per cent, containing in between corrective phases of 5-6 per cent.  

Relative performance ratio of Indian equities against S&P500 is on the cusp of breakout indicating multi-year phase of relative outperformance ahead, the report said.  

Midcap and small cap indices are in the early stage of multi-year bull market after reversing 2018-20 down cycle 

Indian equities are in the middle of a multi-year secular bull cycle, the report noted. The next leg of the rally will be seen in Nifty500 led by sectors including BFSI, IT & telecom, automobile, capital goods, realty and infrastructure, the report said.  

Here is a list of stocks and sectors in Nifty500 index that are expected to be the part of this bull run: 

BFSI – Banking, Financial Services and Insurance sector stocks that are expected to do well include HDFC, Kotak Mahindra Bank, SBI, Canara Bank, Bajaj Finserv, M&M Finance. 
IT & Telecom - TCS, Tech Mahindra, Reliance Industries, Bharti Airtel, Mphasis, LTTS, Firstsource. 
Consumption - Asian Paints, Titan, Pidilite, Varun Beverages, Dixon Technologies, Havells, Trent 
Auto - Tata Motors, Ashok Leyland, Escorts, Balakrishna Industries, Minda Industries 
Capital Goods - L&T, Siemens, HAL, BEL, Grindwell Norton 
Metals - Tata Steel, Hindalco, SAIL, Tata Metaliks, Vardhaman Speciality Steel 
Infra and Realty - Concor, KNR Consts, Orient Cement, DLF, Brigade Enterprises, Godrej Properties 
Healthcare - Divis Laboratories, Cipla, Sun Pharma, Laurus Labs, Abbott India, Fortis Healthcare 
Chemicals - Navin Fluorine, Deepak Nitrite, Tata Chemicals, PI Industries, Nocil 
Others - Gujarat Gas, Butterfly, Interglobe Aviation, Balrampur Chini, Indocount Industries, Gateway Distriparks   

ICICI Recommendations:  

Bouts of volatility should be used as incremental buying opportunity. It said that it was unlikely that the Nifty would breach 16300 on market corrections.  

Temporary spells of volatility of around 5 per cent from here on would offer incremental buying opportunity 

What History Suggests? 

Each of the major bull markets over two decades have generated average returns of 130 per cent from breakout level. From 2020 breakout point, midcap and small cap indices have gained around 70 per cent. 

“Going by history, both indices are expected to gain another 30 per cent from the current juncture over the next one year with intermediate corrective phases of 8- 10 per cent, which will offer incremental buying opportunity,” the report said.