Nifty target of 19,000 will remain intact?
Factors including RBI’s interest rate decision, election results will determine the market’s next move
Forecast – Nilesh Vaghela
MUMBAI: After a one-sided bullish move this week, especially ahead of the RBI’s interest rate announcement, the initial consolidation is likely to continue, but experts believe that the Nifty is likely to resume its upward trend soon. Overall, factors including RBI’s interest rate decision this week, assembly election results will determine the market’s next move.
The past week under review was a good one for equity market investors as both the benchmark indices posted a one per cent gain in the second week ended December, thanks to positive global cues and upbeat economic data, though bulls took a beating on Friday after eight straight sessions of gains. .
The Sensex rose 575 points to 62,868 and the benchmark Nifty-50 gained 183 points to 18,696, while the broader markets gained significant momentum and outperformed the leading benchmarks, with the Nifty Midcap-100 and Smallcap up 102 percent respectively. More and increased by 100 percent.
All sectors showed good improvement with technology, metal, FMCG, energy, oil & gas and realty leading gainers. Given the recent one-sided run this week, some further consolidation is likely initially especially ahead of RBI’s Monetary Policy Committee meeting but the Nifty is expected to move towards 19,000 once again due to strong momentum and favorable signals overall, experts said.
On the technical side, a leading chartist said the Nifty formed a bearish cancel on Friday due to profit booking after eight consecutive sessions of gains. However, the Nifty has also shown a higher high formation for the seventh consecutive week indicating that the benchmark still has momentum and its target of 19,000 remains intact for the coming weeks.
Apart from the Reserve Bank of India’s decision on interest rate hike this week, factors including the movement of global markets, flow of foreign investment, results of state assembly elections are likely to determine the movement of the stock market.
According to market experts, the global factor was currently having a greater impact on the stock market, but due to the RBI meeting and the result of the assembly elections this week, the market’s focus is likely to focus on domestic issues. The RBI will decide on the interest rate hike on December 7, while the results of the Gujarat and Himachal Pradesh elections will be announced on December 8.
On the global front, the US bond yield and the dollar index have seen a sharp fall and the market is likely to keep a watch on the situation. Talking about the macro data, the Purchasing Managers Index (PMI) of the service sector will be released on this Monday.
Other factors affecting stock market movements this week include the international price of Brent crude and movement of the rupee against the dollar. The market is expected to be very sensitive this week considering the current high valuations in the stock market, the Fed policy meeting and the strict measures against Covid in China. Overall, the next RBI meeting on December 7 is likely to give an idea about the future movement of the market and the intensity of the interest rate hike. A