Market at an all-time high: The Indian equity market is on a strong footing. After months of tussling, the bulls finally emerged victorious in June, thereby lifting the benchmark indices to fresh record highs. The S&P BSE Sensex has now breezed past 65,500 levels, and the Nifty50 has topped the crucial 19,400 level. Nifty's journey from 18,000 to 19,000 took 425 trading days (from Oct'21-Jun'23). In comparison, the index took only 31 days when it covered the journey from 17,000 to 18,000.

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A host of factors, such as steady FII inflows, a robust GDP print, moderating inflation, and strong GST collections, have helped domestic stocks put on a strong show. On a year-to-date (YTD) basis, the broader Nifty50 has rallied 11 per cent in FY24.

FIIs remained net buyers for the fourth straight month, at $6.7 billion in June 2023. YTD, inflows stand at $11.2 billion.

Motilal Oswal Securities says, "With healthy macros, range-bound oil prices, a robust fiscal balance sheet, and moderating inflation, the outlook for the market looks optimistic. While the benchmark soars to a new high, the Nifty trades at a forward P/E of 18.8 times, at a 6 per cent discount to its own long-period average (LPA). Further, it also trades at a P/B of 3x, at a 10 per cent premium to its LPA. "

Notably, Nifty earnings per share (EPS) grew nearly 19 per cent over FY20-23 to Rs 807 as against a market return of nearly 14 per cent (over Dec. 20–Jun. 23). Thus, the valuations are far more reasonable today as compared to their last high in October 2021, the brokerage added.

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Sectors and stocks that brokerages are bullish and bearish on

Motilal Oswal Securities remains overweight on Financials, Capex, autos, and Consumption themes. However, it is Neutral on IT and Healthcare and underweight on Metals, energy, and Utilities.

Top investment ideas: large caps

ICICI Bank, ITC, L&T, Titan, M&M, HCL Tech, Apollo Hospitals, Ultratech, and ONGC

Midcaps and Smallcaps

Ashok Leyland, Vedant Fashion, Metro Brands, MMFS, APL Apollo, Godrej Properties, and Lemon Tree.

IDBI Capital is positive on HDFC Bank, Infosys, TCS, City Union Bank, APL Apollo, Safari, Mold-tek, NCC, Prince Pipes, HG Infra, and Rolex Rings. 

Manish Chokhani, the director at Enam Holdings, is bullish on Financials and cyclical stocks in India, cautious on IT and pharma, and bearish on consumer staples.

Disclaimer: The stock recommendations given here are by brokerages. These are not the views of Zee Business. Consult a professional advisor before making an investment decision.