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Earnings to drive stock specific moves while IT sector to remain in focus

ICICI Securities 01 Oct 2022

Market Outlook:

  • Indian equity benchmarks snapped three week losing streak. Midcaps outperformed with gains of ~2% for the week
  • Structurally we maintain our positive stance with Nifty target of 18100 in October with strong support at 16700 levels. Buy the dips
  • For the coming week, we expect Nifty to hold 16900 with target of 17500. Sustainability above 17500 would lead to acceleration.
  • Seasonality: Historically, September has been a volatile month. However, over past two decades, Q4 returns for Nifty has been positive (average 11% and minimum 5%) on 70% of the times. The history favours buying dips from hereon
  • Relative outperformance: Indian equities continued to relatively outperform global peers while pricing in many negatives in the process. We expect outperformance to continue
  • Sectorally, BFSI, Consumption, Pharma and PSU expected to outperform
  • Preferred Largecaps: TCS, Indusind Bank, Bank of Baroda, Reliance Industries, Sun Pharma, Titan, Tata Motors, Coal India
  • Preferred Midcaps: Havells, Bajaj Electricals, TCI Express, Tata communications, Tata Chemicals, Bharat Forge, Midhani, Cyient, Kewal Kiran Clothing