Nifty's journey to 17,000 could be bumpy, but bull run could lift it to 18,000 by December:

Nifty's journey to 17,000 could be bumpy, but bull run could lift it to 18,000 by December: Experts

KSHITIJ ANAND

 

AUG 04, 2021 / 09:36 AM IST

 
 
 
 
 

Historical data suggests the index could reach the 18,000 level by December, driven by the current momentum and the government’s focus on reforms, although a third wave of the pandemic and inflation fears may prove to be a drag.

The Nifty 50 hit a fresh record above the 16,100 mark on August 3 and while the road to 17,000 may be bumpy, a bull run could propel the index to 18,000 by December, experts said.

Can the Nifty 50 hit 18,000 in about five months? History suggests it is possible. The journey from 13,000 to 16,000 has been relatively quick, save the last 1,000 points from 15,000 to 16,000

The index took about a month to move from 13,000 on November 24, 2020, to 14,000 on December 21, 2020, and less than two months to reach 15,000 on February 5, 2021. However, it took six months from that point to reach 16,000, data showed.

If the current momentum continues and the government keeps its reforms focus going, they may help lift the Nifty 50 towards the 18,000 mark.

“We reiterate our Nifty target of 18,000 by December 2021. Corporate balance sheets have been significantly strengthened with record equity raised in FY21,” said Amar Ambani, senior president & research head at Yes Securities. “We expect the government to continue spending on infrastructure and fast-track the reforms agenda as we have seen with lowered corporate tax rates, production-linked incentive schemes, Reserve Bank of India support and strategic divestments and so on.”

India’s stock markets have rallied largely on support from retail investors and domestic institutions. Foreign investors have remained mostly net sellers, to the tune of more than Rs 23,000 crore in the cash segment in July, data showed.

The Nifty 50 advanced 1.55 percent to 16,130.75 on August 3, after an intra-day high of 16,146.90.

“Tuesday’s move was special as it was achieved despite muted global clues and continuous selling from foreign institutional investors,” said Sandeep Matta, founder of TRADEIT Investment Advisor. “We are in the initial phase of the exuberant bull run, which is well-supported by earning improvements, record tax collections and participation of new investors and will surely help the Nifty to trade above 17,000 in the short run.”

Here are the views of experts on where the Nifty 50 is headed:

Nirali Shah, head of equity research, Samco Securities

The Nifty 50 climbing above 16,000 shows resilience on the back of abundant liquidity, positive developments on the inoculation drive and signs of economic recovery under way.

FIIs have been underweight on Indian equities for four months and the Nifty’s 16,000-mark feat could bring back the focus on India. The ride up will certainly be bumpy, hence it should be tread with caution.

Ankit Pareek, research analyst at Choice Broking

Indian equity bourses hit a fresh record high in Tuesday’s session amid prevailing positive investor sentiments. Key triggers like the unlocking of the economy, improvement in the COVID situation, government plans to expand vaccination pace, optimism over corporate earnings and positive macroeconomic factors contributed towards the outperformance of the market.

In the near term, we remain cautious over rich valuation of the broader market and advise investors to adopt a bottom-up approach while picking stocks.

Ajit Mishra, VP-research, Religare Broking

The Nifty 50 has finally made a new milestone of 16,000+ levels after spending nearly two months in a range. Going ahead, we feel the up move would be gradual, given the surge in the last one and a half years.

Besides, the lingering fear of the third COVID wave would also keep the momentum in check. Meanwhile, the pace of vaccination and easing of restrictions from state governments would be important for the markets.

On the global front, the rising fear of inflation is likely to be an important factor.

Sumeet Bagadia, executive director at Choice Broking

Finally, the Nifty 50 index breached the hurdle of 15,900 and set a new benchmark after a long consolidation. It was an awesome rally on Tuesday’s trading session as, after a positive start, the Nifty climbed higher and managed to close above the psychological level of 16,000.

Based on the present setup, we are expecting the bullish rally to continue further till 16,400/16,500 levels in a short span.

Overall, we are bullish on the Nifty 50 index for the long term, so the immediate target for the index will be 16,400-16,500, and above that level, the rally could be extended till 16,700/16,800 levels.