In a remarkable streak, the Indian stock market notched its fourth consecutive session of gains, propelling the Nifty 50 index to new heights. The index displayed resilience by maintaining a foothold above the critical 21,800 support and overcoming the 22,000 hurdle. Market analysts are now keenly watching for a breakthrough at the 22,125 resistance level, with expectations of the Nifty 50 touching unprecedented levels, reaching 22,400 and 22,800 in the short term.
Here are the compelling reasons experts believe may fuel the Nifty 50’s ascent:
Lok Sabha Elections 2024
Anticipation of a pre-election rally is boosting market sentiment. Recent pre-poll surveys from India Today and Times Now forecast a comfortable majority for the BJP-led NDA, potentially providing a positive impetus to the Nifty 50.
Strong Global Market Cues
Optimism prevails with positive movements in European and Asian markets, coupled with Wall Street setting fresh records. Hopes of imminent rate cuts by the European Central Bank and declining bond yields are attracting investors to risky assets.
FII DII Data
Recent data indicates that Foreign Institutional Investors (FIIs) have been net buyers in the cash segment for four out of the last seven sessions. Analysts suggest this trend could signal the onset of a fresh bull trend in the Indian stock market.
Ample Liquidity
The market anticipates a potential rate cut by the Reserve Bank of India (RBI) following soft inflation data. This expectation contributes to projections of increased liquidity, creating a conducive environment for the ongoing bull trend.
Participatory Rally
The recent market rally witnesses bottom fishing in Indian PSUs and banking shares, indicating sustained interest from stock market bulls. Additionally, small-cap and mid-cap indices outperform key benchmarks, suggesting a diverse and sustainable market rally.
Nifty 50 Outlook
Vaishali Parekh, Vice President — Technical Research at Prabhudas Lilladher, underscores the positive momentum. The Nifty 50 index may retest previous peak levels, supported by a strong bias. The 21,800 level is deemed a crucial support zone, with higher targets of 22,400 and 22,800 expected upon a decisive breakout.
As the Indian stock market charts new territory, the convergence of these factors paints a promising picture for investors eyeing potential gains in the coming week.
