Nifty Aiming for the 16,000 Mark Before July 1

First up, grateful for all the messages received for the inaugural article written last week. The icing on the cake was the fact that the market moved almost as predicted, and we found our way to 15,450 on Nifty and 34,000 on the Bank Nifty. The markets didn’t stay there for too long, though they did climb higher again.

The question is what next? Well, today, ie, June 24, is also the monthly expiry on the futures and options and that always makes for an interesting day, which has much volatility. As big positions are either “settled” or “rolled over”, this is not a day for the faint-hearted, as the swings can truly be quite wild. However, since this piece is always written with an investor in mind, there lies some opportunities.

My outlook this week goes from mildly bearish to one of hope that in the week ahead, Nifty will actually scale the elusive 16,000 peak. As I’d written last week as well, it’s a number that seems so close and yet so far. Last week’s correction and the subsequent bounce back makes me believe that if not on Monday, we will get there by the time I write my next piece, on July 1. Of course, this is just my personal opinion, so please don’t do anything without consulting your financial advisors first.

With that said, for Nifty to hit 16,000, there is one sector that has to come to the party, a sector that has been lying low for almost 3 months now and has been virtually stagnant since mid-March.Yes, you guessed right… the banks. The Bank Nifty has showed little signs of life, and while the Nifty has hit new highs, the Bank Nifty is still quite a fair distance from its last peak of 37,708. Yesterday, Bank Nifty closed at 34,571, and if Nifty has to get those 314 points to touch 16,000, then the banks are vital.

Sectors I’m personally looking at in the week ahead is naturally the banks, the successful sale of UB (United Breweries) assets will help PSU banks, and with the sale of USL (United Spirits Limit) assets coming up next, things look good here. I expect the private sector banks to follow the state-run banks as well. There was some disinvestment news in the sector, which will give an additional push too.

Another sector that has corrected last week and I feel can be looked at is power. Some of the big players were down as much as 5 per cent, and that is always a healthy correction. So power is on my shopping list this week. The pharmaceutical sector has been a little sluggish and I have been adding that to my portfolio too. Another sector that shows potential is insurance and should definitely be added, tremendous value here.

To summarise, this week I’m moving into banking and insurance, making some allocations to the power sector and staying positive on pharma. The rupee has had a great run and should consolidate, so neutral on IT this week. Rest, we need to watch global cues and the big annual general meeting of India’s biggest contributor to the Nifty — Reliance Industries — with over 10 per cent weightage. I have a feeling that this is the week we’ll finally get to 16,000 or somewhere real close. See you again next week. Until then, stay safe, stay well and happy investing.