Equity benchmark Nifty has gained 2.6 percent, so far this month, and is now just 281 points away from a new life-time high of 18,900 as the market momentum continues. The rally has been driven by improved market sentiments amid sturdy Foreign Institutional Investors (FII) inflows throughout the month. At 12:15 pm, the Nifty 50 index was up 19.70 points or 0.11 percent at 18,618.35, gaining for the fourth straight day in a row on Tuesday.

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Foreign Portfolio Investors (FPIs) have pumped in Rs 37,316 crore in domestic equities in May so far, primarily due to strong macroeconomic fundamentals and reasonable valuation of stocks. This is the highest investment by FPIs in the last six months.

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Going forward in June, analysts at ICICI Direct expect the Nifty 50 index to challenge a lifetime high and test the levels of 18,900. Meanwhile, the brokerage does not foresee the Nifty 50 index breaching key support threshold of 17,800.

"The stage has been set to challenge the all-time high in the coming month. We expect the index to resolve out of the intermediate hurdle of 18,500 and retest a lifetime high of 18,900 in the coming month," the brokerage said.

The analysts have presented their views on some of the sectors that could be in focus. According to the brokerage, sectors like BFSI, IT, and auto will remain in the limelight.

Below are the top sectoral bets for June —

BFSI: The banking, financial services and insurance (BFSI) space is seen to maintain its outperformance by the brokerage.

Top bets: Kotak Mahindra Bank, Axis Bank, SBI, IDFC First Bank, L&T Finance, M&M Finance

Telecom & IT: The large cap IT stocks are witnessing pullback from key support, offering fresh entry opportunity with favourable risk reward set up.

Top bets: Reliance Industries, TCS,LTIM ,HCL Tech, Persistent Systems, Newgen Software, BirlaSoft

Auto: The Nifty Auto index has rallied to a eight month high and currently placed at an all-time high with an improvement in both relative and momentum term. The auto stocks are expected to relatively outperform.

Top bets: Tata Motors, Maruti Suzuki, Eicher Motors, JK Tyres, Mahindra CIE, Gaberial India

Consumption & Retail: The FMCG index is seen to maintain its outperformance, mainly lead by ITC, by the brokerage.

Top bets: ITC, Marico Inds, Titan, Astral, Trent, Havells, United Sprits

PSU: 9HAL, BEL, BDL ,Coal India, ONGC, IOC, NALCO, PFC

Capital goods: Elgi Equipment, Grindwell Norton, Anup Engineering, Transformers & Rectifiers, Tega Industries

Pharma & Chemicals: Divi's Laboratories, Lauras Lab, Lupin, Syngene, Healthcare Global, Navin Fluorine, PI Inds

Infra, Real Estate, Metals: Ambuja Cements, DLF, Brigade Enterprises, PNC Infra, NCC, JSW Steel, Hindalco

Others: Tata power, Shoppers Stop, TCI, Globas Spirit, IRCON, GMDC ,Huhtamaki PPL, Jubilant Foods, Lemontree, Tejas Network, Wonderlla holidays

Further, in the process of testing record levels, analysts expect broader markets to accelerate upward momentum fuelled by an 18-month consolidation breakout in the midcap index.

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"The Nifty midcap index witnessed faster pace of retracement as it retraced past four month’s decline in just two months and approached near its all time high. Further, the ratio line of Nifty midcap/Nifty 500 have recorded breakout from cup and handle pattern after five years, indicating acceleration of upward momentum in the broader market," the note stated.

First Published:May 30, 2023 1:30 PM IST