Nifty 50 To Touch 20,000 Soon? Investors Hope So

This has become a hot subject of discussion among various stakeholders in the Indian financial market. A group comprising finance analysts, stockbrokers, seasoned investors, and even laymen have been drawn into this debate.

In financial parlance, the term 'Nifty' refers to the benchmark stock market index of the National Stock Exchange of India and is synonymous with the health and direction of the Indian equity market.

If the Nifty could indeed touch this landmark figure of 20,000, it would represent a significant leap and bear testimony to the robustness of the Indian economy.

However, reaching such a conclusion isn't achieved with a simple 'yes' or 'no.' The world of finance is a complicated one, packed with numerous factors working in tandem, which collectively influence market outcomes.

Market sentiments, for instance, play a crucial role in determining whether the anticipated milestone can be achieved. Essentially, this refers to the collective attitude or feelings of investors towards the market. These sentiments serve as a significant driving force that influences buying and selling decisions, which in turn dictate the direction of market indices, including Nifty.

A surge of optimism, for instance, might lead investors to invest heavily, thereby raising the Nifty, while market pessimism might have the opposite effect. However, market sentiments are not fixed or static. They fluctuate, especially due to economic variables that are anything but predictable.

These include aspects like inflation rates, GDP growth, industrial production, global market trends, geopolitical tensions, and fiscal policies, among others. Even factors like natural calamities, elections, or pandemics can send waves of uncertainty through the market and affect investor sentiment adversely or positively.

For instance, inflation has been running high for the past two years at least and Inflation in India has likely eased in August from a 15-month high in July, led by cooling vegetable prices, but it has held above the upper end of the Reserve Bank of India's 2%-6% target for a second month, according to a Reuters poll.

Hence, the prediction of Nifty touching the 20,000 mark by September 2023 is a rather intricate task, entwined with numerous underlying variables that are dynamic and unpredictable. Even seasoned market analysts, equipped with advanced predictive modelling tools and deep insights, might find the task of predicting the stock index a challenging endeavour.

Santosh Meena, Head of Research, Swastika Investmart Ltd said. "It was a stellar week for the bulls, where headline indexes Nifty, Banknifty, and Sensex joined the broader market party despite lots of negative global cues. Despite the US 10-year bond yield surpassing 4.3%, the dollar index reaching above 50, and Brent crude trading at over $90, the Indian market has displayed remarkable resilience. Bullish sentiment is strong, with hopes of the Nifty reaching the 20,000 mark this week. The standout performer last week was the Nifty PSE index, which experienced its best week in years. The broader market is also in high spirits, as the Nifty midcap and small-cap indices have posted substantial gains for the third consecutive week."

"However, caution is warranted in the broader market, as signs of frothiness are becoming apparent in certain segments. Despite last week's market rally, institutional investors remained net sellers throughout the week, making it crucial to monitor institutional flows going forward. On the global front, close attention will be paid to movements in crude oil prices, the dollar index, and US bond yields. Additionally, global factors such as the US inflation rate and the outcome of the ECB meeting will be of significance. Domestically, developments stemming from the G20 summit may lead to sector- or stock-specific movements. Furthermore, it is worth noting that our IIP and CPI numbers are scheduled to be announced on September 12," added Santosh Meena.

"From a technical perspective, the Nifty has recently broken out of a bullish flag formation, suggesting the potential for a significant upward move. However, it faces a critical psychological hurdle at the 20,000 mark, which currently acts as a key resistance level. If Nifty struggles to breach this level, there's a possibility of it forming a double top pattern around this point, which could trigger profit booking. On the downside, the range of 19,600-19,500 is a robust demand zone, providing support," Santosh Meena stated.

"In the case of Banknifty, it has displayed a strong recovery from its 100-day moving average (DMA). The immediate resistance zone for Banknifty is around 45,600-45,700, and surpassing this level may pave the way for an attempt to reach the all-time high of 46,350. On the downside, the key support level is at 44,400. Turning to the derivative market, it's noteworthy that FIIs (foreign institutional investors) hold a long exposure in index futures at 58%, indicating a neutral to bullish bias," said Santosh Meena.

"The Nifty index has shown strong performance recently, with a nearly 2% gain, finding solid support at the 19200 level. Currently, prices are trading above the 21-day EMA on the daily chart, indicating positive momentum. There's a strong likelihood that Nifty will break its all-time high in the upcoming weeks of September. The immediate support level now stands at 19650, while 19900 serves as an immediate resistance. Turning to Bank Nifty, the weekly chart displays a robust performance, closing above the high of the preceding four weeks and rising by more than 1.5%. On the daily chart, it has broken out convincingly above the 45000 level. Looking ahead, the initial resistance levels can be found at 45800-46000," said Arvinder Singh Nanda, Senior Vice President, of Master Capital Services Ltd.

In conclusion, whilst speculations abound and discussions continue around this topic, reaching a definitive answer remains elusive until September 2023 rolls around. The countless influencing factors make it impossible to predict the future of the market with absolute certainty. It's a waiting game where we are required to keep a keen eye on changes in the market and the economy at large.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.