Riding the Wave: Nifty’s Remarkable Ascent
In a notable move, the Nifty reclaimed the coveted 20,000 milestone after a span of 47 trading sessions. The burning question in every investor’s mind is, “What is propelling this impressive rally?”
Breaking Barriers: Resistance Levels Beyond 20,000
Beyond the 20,000 mark, the index encounters immediate resistance at 20,100 and 20,150.
The equity benchmark witnessed a consecutive surge on November 29, as the Nifty soared past the 20,000 level for the first time since September 18. This remarkable feat was propelled by positive global cues and substantial gains in heavyweight stocks like HDFC Bank, Infosys, and Reliance Industries (RIL).
Unpacking the Rally: Factors at Play
Market optimism found further wings with dovish comments from US Federal Reserve official Christopher Waller. Waller hinted at the possibility of an interest rate cut as early as March 2024 if inflation continues its current trajectory.
Heavyweights Leading the Charge
RIL experienced a notable boost after global brokerage firm JPMorgan bestowed an “overweight” rating on the stock, setting a target price of Rs 2,810 apiece. This projection implies an impressive upside of 17 percent from the current levels.
The recent announcement by the US-based Federal Retirement Thrift Investment Board (FRTIB) regarding a potential transition to a new MSCI Index adds another layer to the positive outlook. According to Abhilash Pagaria, Head of Nuvama Alternative & Quantitative Research, this shift could result in $809 million inflows for key players like RIL, ICICI Bank, Infosys, HDFC Bank, and Tata Consultancy Services (TCS). Consequently, these heavyweights experienced gains of up to 1 percent.
Global Dynamics in Play
Asian stocks marked one-week highs, reflecting the prevailing upbeat market sentiment. Additionally, the dip in the US 10-year bond yield to 4.3 percent and the dollar index slipping below 103 are viewed as favorable indicators for local markets.
“Given the ongoing favorable global market backdrop, the upward momentum in India is expected to persist,” notes VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Charting the Course: Navigating Resistance
“Analyzing the charts, it appears that the Nifty is finding support at 19,850, followed by 19,800 and 19,750,” observes Deven Mehata, Research Analyst at Choice Broking.
On the upside, post the 20,000 mark, the index faces immediate resistance at 20,100 and 20,150.
Strengthening Rupee Adds to the Positivity
The firming up of the rupee against the US dollar has contributed to the prevailing positive sentiment. In early trade, the local currency gained 3 paise, reaching 83.31 against the dollar. Simultaneously, the dollar index, tracking the greenback against a basket of six major world currencies, saw a slight decline of 0.09 percent, settling at the 102.65 level.
