🔥 Premium AI-powered Stock Picks from InvestingPro Now up to 50% OffCLAIM SALE

Nifty 50 price forecast according to CLSA

Published 2024/05/31, 05:24
© Reuters

Investing.com-- India’s benchmark Nifty 50 index is likely to gain in the coming months, with historical data indicating that the index usually performs favorably in an election year, CLSA analysts wrote in a note. 

The Nifty hit a record high of 23,110.80 points at the beginning of this week, although it then fell sharply from those peaks and was trading around 22,488.65 points by Friday.

Volatility in Indian stocks came in anticipation of the 2024 general election results, which are due on June 4.

No exit polls were permitted before the end of voting on June 1, but opinion polls conducted before the elections had predicted another victory for the incumbent BJP and its allies. 

Investors have largely welcomed the BJP’s pro-business policies, which included more support for the manufacturing sector and increased infrastructure spending. The Nifty has been a key outperformer among its global peers for the past two years, while the Indian economy has also seen outsized growth.

CLSA analysts said that looking back to the Nifty’s election year performance since 1991, the market had on average recorded returns of over 25% in election years. 

But they also noted that while the Nifty had managed to break out of a May-March trading range this week, a daily momentum indicator for the index showed some laggard performance going into the elections results next week.

They said the price set-up for the Nifty was similar to that seen before the 2019 elections, where the index had risen sharply in the immediate aftermath of the results (which were a resounding BJP victory), before seeing an at least 10% correction after a few weeks. But the Nifty still rallied into the year-end. 

CLSA analysts recommended taking profits around 23,745 to 23,750 points in the Nifty, in anticipation of a similar consolidation taking place after the 2024 results. 

They forecast the next resistance levels for the Nifty would be around 23,100, 23,745-23,750, and 24,000 points. 

In terms of sectoral positioning, CLSA analysts recommended sticking to the infrastructure sector over consumption on anticipation of stronger performance in the sector. 


Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.