Stock market outlook: 5 reasons why Nifty 50 index can set fresh record this week

Is Nifty 50 expected to set a fresh benchmark?

The following five triggers, according to Indian stock market experts, might keep the bull trend on Dalal Street going if the Nifty 50 rises to a new all-time high this week:

1] Upcoming Lok Sabha elections 2024: “We expect market sentiment to strengthen further as the prospect of a pre-election rally is quite strong. Two important pre-poll surveys by India Today and Times Now predict a more than comfortable majority (272+ seats) for the incumbent BJP-led NDA. Nifty is hovering near all-time zones and is all set to make new highs next week,” stated Siddhartha Khemka, Head – Retail Research at Motilal Oswal.

2] World market: “Shares advanced in Europe and Asia on Friday after stocks on Wall Street set a fresh record following mixed reports on the state of the US economy. Hopes of imminent rate cuts by the European Central Bank and a decline in bond yields lifted investors’ appetite for risky assets,” mentioned Deepak Jasani, Head of Retail Research at HDFC Securities.

3] FII DII status: “In the last seven sessions (till Friday last week), FIIs have remained net buyers on four sessions in the cash segment while in the F&O segment, they have remained net buyers on four sessions. However, DIIs have remained net sellers in the F&O segment in six out of seven last sessions while they remained net buyers in the cash segment in six out of seven sessions. This means DIIs are switching from short to long positions while FIIs are also looking forward to this trade practice. If FIIs repeat the same pattern, then chances are very strong that the Indian stock market witness a fresh bull trend this week,” added Sandeep Pandey, Founder of Basav Capital.

4] Liquidity data: “After the soft Indian inflation data, the market is expecting a rate cut from the Reserve Bank of India (RBI) in the near term. At least, a signal or timeline for rate cust is something that market observers are expecting in the next RBI meeting. This is expected to fuel liquidity in the market as lowering of interest rate may lead to more availability of the money in the markets,” stated Sandeep Pandey.

5] PSUs and Banking shares: “After a strong sell-off in the Indian PSUs and banking shares last week, we are witnessing bottom fishing in these stocks in the current rally, which means the PSU theme is still under the radar of stock market bulls. Apart from this, small-cap and mid-cap indices are still dominating over the key benchmark indices, which means the recent rally is across segments and it is going to sustain,” claimed Avinash Gorakshkar, Head of Research at Profitmart Securities.

Stock market status

Vaishali Parekh, Vice President — Technical Research at Prabhudas lilladher addressed the forthcoming outlook of Nifty 50, “The Nifty 50 index gained further with a gap up opening and once again breached above the 22,000 zone and sustained the levels with bias maintained strong expecting to retest the previous peak levels in the coming sessions. The index would have the 21,800 level as the important support zone and can expect for higher targets of 22,400 and 22,800 levels once a decisive breakout above the previous peak level is confirmed.”