Nifty, Sensex end with gains, analysts suggest 'buy on dips' strategy

Indian equities are poised to enter CY24 on a buoyant note. Given that 2024, is a Union Election year, it will have a significant bearing on sentiments in markets.

Benchmark indices ended higher for the third consecutive session on December 26. BSE Sensex closed 230 points or 0.32 percent higher at 71,337, and the Nifty shut shop 92 points or 0.43 percent up at 21,441. About 2,232 shares advanced, 1,508 declined, and 139 shares remained unchanged.

Except Information Technology, PSU Bank, all other sectoral indices ended in the green with Energy, Metal, Pharma gaining over 1 percent each.

Divi's Lab, Hero MotoCorp, Adani Enterprises, NTPC, and Wipro were among major gainers on the Nifty, while losers were Bajaj Finance, Infosys, Tata Motors, Bajaj Finserv and TCS.

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The Nifty is consolidating recent gains, anticipating a positive trend. The recommended strategy in the current market context continues to be buy on dips, according to Shrey Jain, founder and CEO of SAS Online.

Global markets are rallying in anticipation of aggressive US FED rate cuts in 2024 and Indian equities too are experiencing a surge despite premium valuations driven by reversed FIIs inflows amid global risk-on, said Vinod Nair, Head of Research at Geojit Financial Services.

However, some exhaustion is noticed in mid- and small-caps after the stretched rally of the last 2 months. "Year 2024 is forecast to be a sector rotation period. Sectors like consumption, IT, Pharma and export-based stocks should do better," Nair said.

According to analysts at ICICI Securities, Indian equities are poised to enter 2024 on a buoyant note. Given that it is an election year, it will have a significant bearing on sentiment in the market. Historically, benchmark indices have performed well in election years despite spikes in volatility.

"Going by four-decade history, median returns in the election year have been 17 percent. Therefore, one should use volatility during the election year as a buying opportunity," the brokerage said.

Also Read | Investor focus to shift to national elections in 2024 as inflation cools off | Edelweiss MF Interview

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