Sensex, Nifty Hit 52-Week Highs: What Market Experts Make Of It

India's stock benchmarks opened higher on the back of broad-based gains, tacking a global rally on expectations that a lower consumer inflation number in the U.S. may slow down the pace of Fed rate hikes.

The Sensex gained at open to post a 52-week high on Friday morning. Nifty 50 also rose, and reached a 52-week high around 2:30 p.m.

Here's what market participants have to say about the rally:

'More Upside If...'

Rahul Sharma, director & head of research, JM Financial

Bear market rally or a new bull run in the U.S. markets is something that has got many thinking, but one thing seems obvious that we are in a bull market and a new an all time high is within sniffing distance. Technically, we should see more upside if we close above 18,300 today and 18,605 can be challenged in the next week itself.

'Don't Expect Big Move On Either Side'

Hemen Kapadia, VP at KRChoksey Securites

Nifty all-time high is at 18,604 level which we achieved in October 2021. Usually, we have not been able to sustain above 18,300 levels. It is crucial for Nifty to sustain above 18,300 for the rally to sustain and Nifty to inch higher. Market setup looks good, however we are running into historically strong resistance levels. If the markets are able to remove historic resistance levels, the uptrend will continue. India VIX has inched below 15, which is a good sign. Hence, one should not expect a big move on either sides. Currently, there are no negatives in the market. US VIX has also cooled.

US dollar index made an intermediate peak after an eight-month of trend. The world setup, India and U.S. VIX, dollar index suggest good times for the equity markets. After hitting a fresh high today, Bank Nifty needs to close above 41,830. IT has bottomed out from a medium term.

If Nifty is able to take out 18,300 and 18,604, then 19,200 is the next level to watch. Expect Bank Nifty to hit 45,000.

Reliance Industries Ltd., Banks, IT and Metals expected to support markets to its journey to 19,300 levels.

'India To Be Among Best-Performing Markets'

Dinshaw Irani, Chief Investment Officer, Helios Capital, India

Our belief is that the Indian market rally has just started. We expect India to be one of the best-performing markets in dollar terms.

Taking the real and nominal growth of GDP into consideration, we expect a 13-14% growth in earnings for index-based companies. Markets are a slave to earnings growth and if you build that in then, we are talking of a 13-14% growth on a consistent basis. Friday's high will be one of the milestones of the bullish journey that Indian markets have embarked on.

We are bullish on banks and consumer-facing NBFCs. Also positive on consumer discretionary. We remain cautious on information technology and pharma stocks which are export-oriented.

'Nifty Will Gradually Move Towards 19,000'

Nirav Chheda, AVP derivatives & technical research, Nirmal Bang

Nifty had fallen from 18,550 to 15,200. There will be 100% retracement and we are 150-200 points away. Bank Nifty has broken out already. Will see Bank Nifty inch to 45,000 levels which will then take Nifty to 19,000 levels.

If Nifty hits 18,550 in the next couple of trading levels, there is a possibility of some selling pressure, post which there will be consolidation and a gradual move to 19,000 levels.

Open interest and delivery data is suggesting HDFC Bank will start performing. Over next 10 days, you will see huge buying interest in the stock. HDFC Bank is expected to aide market upmove.

We are positive on Federal Bank, IDFC First, Axis Bank and ICICI Bank.

'History Favours Buy On Dips From Here On'

Dharmesh Shah, VP & head of technicals, ICICI Direct

We have a target of 18,900 on the Nifty and expect it to challenge like high level of 18,600 in the coming week. Gradually by December, Nifty will head towards 18,900. Post breakout of Nifty's falling trendline, we see a resumption of primary uptrend.

Historically, over past two decades, Q4 returns for Nifty have been positive with an average of 11% on the higher side and 5% on the lower side. Out of 21 occasions, Nifty has given positive returns 15 times. As we are entering Q4, history should favour buy on dips from here on.

BSE PSU Index has seen a breakout from a decade-long consolidation, indicating a structural turnaround which should support the index at 18,900 levels. India VIX is below 16 levels is a positive.

Indian equity markets is expected to relatively outperform global peers and correction in dollar and dollar index suggests that the momentum in Indian markets will continue.

Mid-cap index should form a higher base above the falling channel breakout and see the catchup happening in December.

Banking remains a top pick, including stocks like HDFC Bank Ltd., State Bank of India, Kotak Mahindra Bank Ltd., Bajaj Finance Ltd., Sundaram Finance Ltd., Bank of Baroda Ltd., Canara Bank Ltd. Coal India Ltd., Container Corp., BHEL Ltd., Shipping Corp. are are top picks from the PSU sector.

The IT index witnessed falling channel breakout in Friday's session, indicating end of a correction phase and resumption of a fresh uptrend. We prefer stocks like Tata Consultancy Services Ltd., HCL Technologies Ltd. and KPIT Technologies Ltd. We expect Reliance Industries to challenge life-time high levels.

'Important To Sustain Above 52-week High Level'

Ambareesh Baliga , Independent Market Analyst

Markets crossing a 52-week high is no doubt an “Event” but it’s important for it to sustain above those levels and continue with the momentum. We are today in a unique situation where the global economies are staring at a slowdown and the Indian economy is expected to be the lone bright spot, though our GDP forecasts are being downgraded.

Liquidity and positive sentiments have played a major role in this rally as earnings have been mixed, pointing towards a strain at the lower-end of the pyramid.

Though I believe in the longer-term India story, in the short-term, we seem to be getting overvalued in view of the numerous red flags globally, which includes a slowdown, increasing rates and inflation, and geo-political issues.

Sector-wise still see defence, automobiles, BFSI, speciality chemicals outperforming while metals, cement, textiles and export oriented segments underperform.