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"There has been a change in the market leaders this time around. In 2014, the rally was led by pharmaceutical and information technology stocks. The baton has now passed on to RIL and stocks from the banking sector. Though stocks from the fast moving consumer goods (FMCG) segment did not participate, ITC which is an index heavyweight, has not corrected much and has provided support," explains A K Prabhakar, head of research at IDBI Capital.
Of the ones that have hit an all-time high, the rally in some has been news driven. For instance, the recent spurt in HDFC Bank, UltraTech Cement and Indiabulls Housing Finance has been on account of the March quarter results that rekindled investor interest in these counters.
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"One reason for the Nifty50 index reaching all-time high level is the rally in stocks that have a high weightage in the Nifty50 index - like HDFC and HDFC Bank. That apart, a large part of the up move in the Nifty50 has been on account of RIL. Though the stock is not at a lifetime high, it has moved nearly 40 per cent over the past few months," says Kunj Bansal, ED & CIO at Centrum Wealth Management.
"That apart, the rally this week in these stocks has been the fact that we are now closer to the derivative expiry for the April series. So traders could be covering their short positions post the results announcement in some of these counters," he adds.
Going forward, sustenance of positive results momentum, and more importantly management commentary about FY18 earnings recovery prospects, will be a key thing to monitor, analysts say, as valuations do not offer much comfort from here on. This, in turn, will also influence flows into the equities as an asset class.
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In the short-term, Prabhakar of IDBI Capital expects the Nifty50 index to scale up to 9,600 levels, and hit 12,000 by end of the current financial year 2017-18 (FY18).
"The index has seen a breakout after two years and the uptrend is likely to continue over the long-term if the domestic and global variables remain supportive. Sectoral-wise, the ones that have been laggards, especially the information technology sector can see a turnaround," he says.
Others such as Bansal, however, are cautious given the recent spurt. He expects continued support from the banking pack and RIL if the markets are to move higher from here on.