According to Shah, the recent quiet in the Nifty is typical of a strong bull market, where you see market cap rotation. His target for the Nifty is a close above 25,200, which could then set up a rally to 26,200, a potential stopover at 25,600.
Among sectors, he likes the entire infra space and believes power is also shaping up well. “The top four or five names in both of these sectors (infra and power) look very good to us. They could generate 25 to 30% upside over the next six to 12 months.”
Also Read: US inflation eases more than expected in May
Shah also flagged renewed interest in pockets like capital goods, sugar and paper.
He’s cautious on defence stocks despite their sharp rally. “There are very clear signs of fatigue. I will want to believe that there is a greater fools theory that seems to be playing out there,” Shah said. “I agree it’s a great story for the next five years, but for investors, there are some amazing opportunities across the board.”
He’s bullish on the entire PSU banking sector. “That’s a theme that’s going to play out beautifully. Valuations are comfortable. Charts are great. They’re all coming out of three months of consolidation,” he noted.
