The Nifty has been on an impressive trajectory, achieving five consecutive days of gains and successfully reclaiming a crucial support level of 24,000 on Monday. However, with ongoing global market uncertainties and recent criticisms from former U.S. President Donald Trump aimed at Federal Reserve Chair Jerome Powell, the question remains: Can Indian markets maintain this upward momentum? Investors are keenly observing the Nifty’s performance.
Are Bulls Gaining Ground?
Market analysts suggest that the surge in India’s valuations is backed by strong fundamentals. Positive expectations for Q4 FY25 and decreasing inflation rates are bolstering the bullish sentiment. According to Akshay Chinchalkar, Head of Research at Axis Securities, the Nifty has successfully closed above its 200-day moving average for the first time this year. “To keep the rally alive, bulls need to ensure a close above yesterday’s high, with significant support at 23,872. If they succeed, the next targets could be between 24,000 and 24,500,” he added.
Rohan Mandora, an analyst at Equirus Securities, remarked that while valuations have risen amidst the rally, they remain significantly below historical highs, indicating minimal risk of overvaluation.
Persistent Market Volatility
Despite these encouraging signs, volatility is likely to continue as Wall Street remains unsettled following Trump’s critical comments about interest rate adjustments by Powell, alongside ongoing tensions in U.S.-China trade relations.
Technical Indicators Show Positive Trends
From a technical perspective, Samco Securities highlighted that the Nifty has broken through a falling trendline resistance on its daily chart, which had previously hindered its rally attempts. This breakout, marked by a robust bullish candle formation, signifies a promising shift in market momentum. The trend of higher highs and higher lows confirms the ongoing positive trajectory.
Furthermore, if global uncertainties continue, foreign institutional investors (FIIs) may resume their investments in Indian equities, especially as the dollar index has fallen to a three-year low, as noted by Vinod Nair, Head of Research at Geojit Investments.
Optimism for Market Continuation
“We anticipate sustained positive momentum in the market, driven by robust domestic factors and sector-specific movements during the current Q4 earnings announcements,” stated Siddhartha Khemka, Head of Research and Wealth Management at Motilal Oswal Financial Services.
However, it’s important to note that while overall asset quality is expected to remain stable, certain sectors such as microfinance, unsecured business loans, and credit cards may face higher credit costs during Q4. Mandora expressed optimism for the financial sector, anticipating favorable conditions supported by improved business momentum and macroeconomic tailwinds starting in H2 FY26.
In summary, market experts are optimistic that the Indian markets will continue their positive trend, fueled by strong fundamentals and encouraging earnings reports for Q4.
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