Stocks to watch out with likely Modi tide in equity markets

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The bond yields in the US are rising amid intense speculation that the Federal Reserve may cut rates early next year or even in the month of January itself.

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By S Jha

New Delhi, December 3: Ace traders have given up on advising new stocks in anticipation that the indices will blast off the roof tomorrow at the opening only. Some of the active traders are going wild in their celebrations of the Assembly verdict, claiming that Nifty may open at least 200 points higher which will correspond to almost 700 points gains in Sensex.

While the Indian traders are going gala over the election verdict with assessment that doubts over the 2024 Lok Sabha elections have been cleared, the bond yields in the US market are showing strength to stage a comeback after November selloff. The bond yields in the US are rising amid intense speculation that the Federal Reserve may cut rates early next year or even in the month of January itself. The US economy has grown fast despite high interest rate regime.

With the investors searching for value buying in the stock markets in anticipation that the equities may rally strongly because of the election mandate, it is worthwhile to note that theme-based rally has been seen in some of the stocks in the recent months. Railway, defence, power, and auto stocks have been seen to be clear favourites among the investors.

In the power sector, there has been furious run in a select few which includes the likes of Power Finance Corporation, Rural Electrification, KPI Green Energy, and NTPC. There are several others which have sharply gone up in the power sector. IREDA also listed with a massive gains on Thursday. With the current phase of rally in the indices being led by the fund-based buying, it may be noted that NTPC has seen rise in the FII ownership in the last quarter.

Defence stocks have been on the top of the investors minds who have been linking the run in the scrips to Modi’s focus in building self-reliance in the defence sector. The likes of Hindustan Aeronautics, Mazhgaon Docktard, Cochin Shipyard, and a few more have seen sharp appreciation in their respective share prices.

The Modi government is also claiming to be accelerating the development of the railways. The high speed rail corridor between Ahmedabad and Mumbai has seen major completion of the construction of civil works. The focus has also been on the introduction of Vande Bharat. The likes of Rail Vikas Nigam, IRCON, Titagarh Wagon, Jupitor Wagons, Rail Tel, Rail Finance Corporation and a few more have seen sharp rise in the share prices.

With the FIIs returning to India in a big way, the market participants see a clear focus on the auto stocks with a secular rally being seen in the sector. The likes of Bajaj Auto and Hero Motocorops have gained in share prices speedily in the last few weeks. Even the technology companies in the auto space such as KPIT Tech and Tata Technologies are seen to be commanding PE valuation in excess of 80.

(Disclaimer: This article doesn’t recommend buy or sell of any stocks, and one should always take advises from a SEBI-registered advisor before making an investment decision)

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