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Updated December 16th, 2023 at 17:21 IST

Nifty to cross 21,700-mark in near term, says Swastika Investmart

Foreign Institutional Investors (FIIs) re-entered the market with considerable enthusiasm last week, making substantial purchases exceeding Rs 18,000 crore.

Abhishek Vasudev
Dixon Technologies shares rally
On the downside, 21,200 serves as immediate support for Nifty | Image:Unsplash
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The Indian equity markets extended their gains for the seventh consecutive week, showcasing robust momentum that continues to strengthen. The rally, observed in the previous week, was distinctly fuelled by global cues, with a particular focus on the potential rate cuts hinted by Fed Chairman Jerome Powell and the diminished likelihood of a US recession in 2024.

A standout performer during this period was the Information Technology (IT) sector, evident in the Nifty IT index's remarkable gain of over 7 per cent. The IT sector benefited from the decline in US bond yields and a more positive economic outlook, supported by favourable valuations.

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Foreign Institutional Investors (FIIs) re-entered the market with considerable enthusiasm last week, making substantial purchases exceeding Rs 18,000 crore.

“The upcoming weeks are poised to be significantly influenced by the direction of funds from FIIs. While the previous week was shaped by US Federal Reserve policy developments, the focus now shifts to the Bank of Japan's policy decision on December 19th. This is crucial as the Japanese Yen experiences strengthening, and any tightening by the Bank of Japan could pose a risk of unwinding the Yen carry trade,” said Santosh Meena, head of research at Swastika Investmart Ltd.

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Market dynamics will also be impacted by factors such as crude oil prices and macroeconomic data from both the US and China, he said.

Technical setup

“From a technical standpoint, the Nifty has maintained its bullish momentum, and it is evident in the breakout from a flag formation. The immediate target is set at 21,700, with the potential for further upward movement to 22,000, although some consolidation may occur,” Meena added.

On the downside, 21,200 serves as immediate support, with a crucial support level at 21,000 in the event of any pullback, he said.

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“For Bank Nifty, the successful close above the 48,000 hurdle signals the potential for additional bullish momentum towards levels of 48,500-48,800. Immediate support lies at 47,500, with a critical support zone at 47,000–46,800 in case of a downturn,” Meena said.
 

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Published December 16th, 2023 at 14:10 IST

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