Nifty may hit 21,000 in 6-9 months; rally likely to be non-linear with 5-7% intermediate corrections, says ICICI Direct

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macroeconomic conditions. According to the brokerage firm, Nifty’s lifetime highs have reinforced the uptrend. “We reiterate structural bullish stance with Nifty target of 21,000 over 6-9 months, with strong support at 18,200," ICICI Direct said in a report.

The current breakout in Nifty resembles that of CY14,CY17, wherein, the index rallied 11% post breakout in subsequent six months, the brokerage noted.  However, analysts at ICICI Direct also expect the rally to be non-linear with intermediate corrections of 5-7%. Over the past four decades, third year returns of each decade have been positive with a median of 18%. “We expect, index to maintain the same rhythm and head towards our target of 21,400 by December 2023," ICICI Direct said.

Also Read: With nearly 20% upside, Religare reiterates ‘buy’ on these IT majors post Q1FY24 results; do you own? It further noted that going by past four General elections since 2004, Nifty has gained a minimum 11% in election year. The cyclical stocks tend to outperform in the election years. BFSI, a key heavyweight sector, has delivered double digit returns in three out of four election years, while Auto, Power, Construction & Infra have been in limelight on at least three occasions.

Hence, staying invested through event related volatility has been rewarding, the brokerage house said. It believes Indian equities to outperform developed and emerging market (EM) equities over next few years. “Weak US dollar has been positive for foreign investments inflow to emerging markets and India stands to be a key beneficiary of the same," the brokerage report said.