Nifty valuation near pre-Covid average, says Jefferies; tweaks stock portfolio

Despite recent market dips (Sensex Today Tanks 1,405 Points), Jefferies' positive outlook on banking suggests a potential rebound. The sector has faced headwinds (global tensions, oil prices) but improving fundamentals could drive future growth.

Look for entry points in fundamentally strong banking stocks, focusing on those with healthy NIMs and improving asset quality, with a bullish bias.

For Indian markets, this story mainly matters for , , and the Banking, Pharmaceuticals, Real Estate pocket. The current signal is bullish, so traders should look for follow-through in price, volume, and sector breadth instead of reacting to the headline alone.

Watch whether the next market session confirms the setup described here: Jefferies favors banks due to improving sector-specific outlook. Jefferies favors pharma due to improving sector-specific outlook. Also track volume confirmation, sector participation, and whether the move holds beyond the first reaction.

• •Nifty valuations have eased to near pre-Covid averages.
• •Jefferies has turned constructive on equities.
• •Jefferies favors banks, pharma, and real estate.
• •Jefferies is trimming autos and cement.
• •Jefferies sees moderate earnings growth ahead with limited downside risks.