‘Nifty Will Rally If’: Ajay Bagga On Stock Market Today

The Federal Reserve decided to keep its benchmark interest rate unchanged on Wednesday, March 19, while signaling an expectation of two rate cuts later this year, despite increasing economic uncertainty. 

Along with this decision, the Fed revised its economic projections, forecasting slower growth for this year and next, and an uptick in the unemployment rate to 4.4% by year-end. Inflation is expected to rise slightly to 2.7%, above the central bank's 2% target. Ajay Bagga, a market expert, offered an optimistic outlook for the stock market on Thursday, sharing his views with Republic Business.

Fed's Impact and Global Trends
The Federal Reserve's latest projections signal cautious economic growth expectations and a slight uptick in inflation. Bagga highlighted these factors as critical in shaping market sentiment globally and in India.

"Investor reassurance from Fed Chairman Jerome Powell has had a significant impact," Bagga noted in his pre-market analysis. "Most Asian markets responded positively, excluding Hong Kong due to underperformance in tech shares."

Indian Market Response
On Wednesday, Indian markets closed positively, with the Sensex gaining 140 points and the Nifty closing above 22,900. Thursday saw a strong opening, with the Nifty surpassing the 23,000 mark early in the trading session.

"The key level to watch is 23,050, a strong resistance point," Bagga stated confidently. "Once breached, we anticipate a short-covering rally driving further gains over the next days."

Short-Term Outlook and Key Levels
Bagga cautioned about potential reversals in US markets post-Fed decisions, which historically influence global trends. "Short-term market movements often see reversals by Friday," he remarked, noting correlations between Indian and US markets.

Despite short-term caution, Bagga expressed optimism for emerging markets, where India holds a significant share. "As flows into emerging markets increase, India stands to benefit," he added, hinting at potential gains beyond immediate sessions.

Market Performance and Sectoral Insights
On Thursday, the Sensex opened at by 372.25, while the Nifty was above  23,008.75. Key gainers included Shriram Finance, Hero MotoCorp, TCS, and Tech Mahindra, while Trent, L&T, Dr Reddy's Labs, Bajaj Finserv, and Asian Paints faced losses.

Future Outlook
As markets navigate short-term fluctuations, Bagga highlighted April 2nd as a potential overhang due to upcoming economic data releases. "Investors should watch for sustained trends amidst global economic shifts," he advised.