Public sector banks, IT, capital goods and power stocks could be among the top gainers in the run-up, it said.
“Empirically, in a general election year, Nifty has a tendency to bottom out in February-March, followed by a minimum 14% rally towards the election outcome in each of seven instances over past three decades,” said the brokerage’s analysts Dharmesh Shah, Nitin Kunte, Ninad Tamhanekar and Vinayak Parmar in a note on February 1.
ICICI Sec expects Nifty to form a ‘durable bottom’ in the February-March period wherein 20,500-20,800 levels could be a strong support. “Usual bull market corrections in Nifty are around 8% (multiple cycle average) followed by new highs,” the analysts said. “Volatility from hereon should be embraced as a buying opportunity.”
The firm said the ratio of Nifty to Nifty500 is at the bottom of the cycle. “Over two decades, this ratio bottomed out at 1 on two occasions, followed by large-caps performing in subsequent quarters,” the analysts said.
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