Nifty can hit 23,400-mark by June driven by pre-election rally: ICICI Direct report

In the midst of the volatility in the stock market, a pre-election rally has the potential to take NSE Nifty to 23,400 points by June 2024, predicted a report by ICICI Direct, where it advised stock market investors to embrace the dip in the markets ahead of the polls.

ICICI Direct said in its note that the dip in the market amid the February-March period will only encourage fresh entry opportunities, which will lead to a significant spike in Nifty points during the election season, reported Moneycontrol.

The report said that the benchmark indices have delivered strong performances in election years in the past, and the same can be expected after the 2024 Lok Sabha elections. The median market returns in election years have been 17 percent.

Nifty has a tendency to drop in February and March, followed by a minimum 14 percent rally as the results are expected to be announced after the polls, which has been the case for the past three decades over seven instances.

IT stocks in focus

Further, ICICI Direct also said that the outperformance of PSU Bank stocks is expected to amplify over the next couple of months, and investors should also keep an eye out for IT stocks despite the current dip in the market.

ICICI Direct’s top picks for PSU banks that may deliver a strong performance soon are State Bank of India (SBI), Bank of Baroda (BoB), Punjab National Bank (PNB), LIC Housing Finance, Union Bank and PNB Housing Finance.

Meanwhile, the firm’s top pick for IT firms to invest in ahead of the elections are Tata Consultancy Services (TCS), Infosys, HCL Technologies, Eclerx Services, and Coforge.