Here is what experts say about the strongest sectoral leaders and laggards of current market rally

Experts' take on Sectors

The market staged stellar performance after forming tariff bottom on April 7 and recorded 2,500 points rally on the Nifty 50 till April 22, which is just 9 trading sessions. Banking & financial services sector was the main driver for this smart upward journey of the market, as the Nifty Bank and Finance indices gained 11.6 percent and 11.4 percent, respectively from April 7. This sector has significant weightage in the benchmark index.

Realty, Auto, Metal and Energy were also leaders in this short period rally, rising between 10 percent and 14 percent, while the performance of Nifty IT (up nearly 4 percent), Pharma (up 7.2 percent) and FMCG (up 7.4 percent) remained below compared to leading sectors.

Experts are hopeful for the continuation of this market rally despite intermittent consolidation, anticipating the Nifty may move toward its previous record high 26,277 in the coming months driven by rate sensitives and domestic themes than global.

"Nifty can probably test lifetime high levels, but it might take nearly around 2 to 3 months of time before that is achieved. The overall undertone looks to be bullish for both Nifty and Bank Nifty," said Ashish Kyal of Waves Strategy Advisors.

According to Dharmesh Shah of ICICI Securities, the statistical model suggest that host of the negative news are now priced-in and the Nifty 50 has entered in to base formation in the vicinity of 21,900-23,800. The current strong recovery supported by positive divergence on the weekly chart, indicates that bottom is in place, he believes.

Here's what technical experts say about the journey from here on of the leaders and laggards of current market rally:

Ashish Kyal, CMT, Founder and CEO of Waves Strategy Advisors

We can clearly see that the interest sensitive sectors like realty, banking, and financials have been the top performer from the lows which was made on of April 7. It seems that the overall economic cycle is possibly again turning back on the upside and we might be in the late contraction or early expansion Phase of the economic cycle. During such phase interest sensitive stocks tend to do well, and we should start seeing Auto also catching on the upside.

On the other hand, IT, pharma and FMCG have been laggards so far, but the consumption should increase and FMCG stocks can start out performing to some extent. Pharma has shown steep decline, and it has been falling even before tariff announcement. There is a possibility that we might see some kind of a consolidation in IT and pharma before we see a smart recovery in this sector.

In summary, we can expect interest sensitive sectors to perform overcoming weeks and months and some base formation across IT pharma and FMCG is expected.

Dharmesh Shah, Technical Head at ICICI Securities

Sectorally, focus should be on domestic themes rather than global wherein we expect Financials to continue with its leadership supported by PSU, Metal, Telcom, Pharma, Consumption while IT, capital goods & infra offers favourable risk reward set up.

Rajesh Bhoshale, Technical Analyst at Angel One

Nifty Realty: On a monthly basis, the sector has gained 4 percent, but from the panic lows of April, it has rallied impressively by nearly 14 percent. The daily chart shows a bullish double bottom formation, and with indicators still away from overbought territory, there's room for further upside. The index may extend its move towards the previous swing high of 960, aligning with the 200DSMA, while Rs 840 is likely to act as strong support. Macrotech Developers, Sobha, Prestige Estates Projects, and DB Realty are preferred picks, poised to extend their upmove in the near term.

Nifty Bank: In just 9 sessions, Bank Nifty has rallied 6,800 points (nearly 14 percent) from the April swing low. The daily RSI is now in overbought territory, highlighting stretched conditions. While the broader trend remains bullish, the rally looks due for a pause either through time-wise consolidation or mild correction. With monthly expiry nearing, we don’t expect major upside in the short term. Avoid chasing momentum; wait for pullbacks toward the 54,600–54,400 support zone. On the upside, 56,300 remains a strong resistance.

Nifty Finance: Along with the banking sector, financial stocks too have seen a stellar rally. However, prices are now nearing a key golden retracement resistance around 26,900, coupled with overbought conditions. This suggests that the next leg of the uptrend may not be as swift. Hence, we continue to advise against initiating fresh longs at current levels due to an unfavourable risk-reward setup. Ideally, better opportunities may arise in the 26,000–25,800 zone.

Nifty Auto: After months of underperformance, the index has shown a strong turnaround in April, forming a bullish Hammer-like pattern on the monthly chart. With several constituents trading well below their 200DSMA, a catch-up move looks likely. In the near term, Nifty Auto may extend its upmove towards the 22,800–23,300 zone, with a strong base seen near the bullish gap around 21,000.

Nifty Metal: This space has been highly volatile in recent months, with sharp swings on both sides. Uncertainty is likely to persist, so a selective approach is advisable. Avoid aggressive bets until a clear trend emerges. Strong resistance lies in the 9,000–9,200 zone, while immediate support is seen around 8,200.

Nifty IT: Amid recession fears and weak results from key heavyweights, the IT index has underperformed the broader market. However, with prices at long-term support and still in oversold territory, no major downside is expected in the near term unless global uncertainties arise. While sharp gains may be limited, a relative recovery from current levels is likely. The 32,000 zone acts as a strong base, aligning with the May 2024 swing low and 200 WMA, while 36,000 is the immediate resistance.

Nifty Pharma: Tariff-related uncertainty had triggered volatile swings in this space over the past month, keeping the index in a broad range. While the index lacks clear direction, several individual stocks are showing strength. A stock-specific approach is advisable, with Lupin, Divis Laboratories, and Cipla emerging as preferred picks based on their technical setups.