Analysts suggest that the selloff in PSU stocks provides a good entry point for investors.

According to Soni Patnaik, assistant vice president of equity derivatives research at JM Financial Services Ltd., there has been some volatility and profit booking in the PSU space. She suggests that the market correction provides an opportunity for a buy-on-dip strategy, particularly in stocks like NTPC Ltd., Coal India Ltd., and ONGC Ltd., which have dropped to levels where investors can reinitiate long positions and ride the momentum for a 5-6% upside.

Dharmesh Kant, head of equity research at Chola Securities, believes that PSU stocks are well-poised for further growth, as their third-quarter results meet expectations.According to Kant, sector rotation is the prevailing trend in the market, with a focus on liquidity rather than valuation, as the latter is already priced in. He anticipates the market to remain rangebound in the near term, with a potential breakout after the fourth-quarter earnings and elections.

On Tuesday, the Nifty and Sensex rebounded after a one-day drop, led by gains in ICICI Bank Ltd. and Reliance Industries Ltd. The Nifty 50 ended 0.59% higher at 21,743.25, and the S&P BSE Sensex gained 0.68% to close at 71,555.19.

Patnaik states that the Nifty may reach 22,000–22,100 if it breaks the resistance zone of 21,850, while the Bank Nifty could face resistance at the 46,000–46,200 levels. Analysts expect the markets to oscillate in the coming period, with no significant breakout.

However, the overall tone is still positive, and there is potential for the market to build up momentum. It is important to note that the views and opinions expressed by the investment advisers on NDTV Profit are their own and not those of NDTV Profit.