Indian equity markets are poised for significant growth with the Nifty 50 index potentially reaching 26,800 by the end of December 2024 and extending gains to 27,500 by the conclusion of 2025, according to prominent market expert Rohit Srivastava.
Technical Indicators Signal Bullish Momentum
Rohit Srivastava, founder and market strategist at Indiacharts.com, shared his optimistic outlook in an exclusive interview with Mint. Despite November's volatility driven by global market fluctuations, Srivastava believes the worst is behind us.
Weekly and daily momentum indicators remain firmly in bullish territory, supporting the market's gradual but consistent upward movement. The expert noted that while mid and small-cap stocks experienced some weakness during the latter half of November, causing investor anxiety, earnings momentum has begun to recover, promising greater stability ahead.
An important technical indicator, the 20-day advance/decline ratio has entered oversold territory, suggesting limited downside potential for the broader market in the coming sessions.
Key Drivers for Market Growth
Srivastava identified several crucial factors that could propel the Nifty 50 to new heights. The index has demonstrated resilience by finding support multiple times near the 24,500 level before decisively breaking through the 26,000 barrier.
Positive developments on three fronts could accelerate market gains: potential rate cuts by the US Federal Reserve, similar monetary policy easing by the Reserve Bank of India, and the much-anticipated India-US trade deal. The market is already beginning to price in robust festival season sales, which should become evident when third-quarter results are announced in January.
Banking Sector Emerges as Safe Haven
With the Nifty Bank scaling record highs, Srivastava expressed particular optimism about banking stocks. Global banking stocks have demonstrated remarkable outperformance, with US bank stocks showing minimal decline during recent corrections due to increasing certainty about interest rate trajectories.
In the Indian context, credit growth has accelerated from 9% to 11.3% in October, indicating expanding business activity and improved profitability for financial institutions. Srivastava emphasized that banking represents the most undervalued sector in an otherwise overvalued market, making it an attractive safe haven for institutional investors concerned about stretched valuations elsewhere.
Limited Downside Risks, But Geopolitics Remain Concern
Addressing potential risks, Srivastava noted that most negative news has already been priced into the market, reducing the likelihood of significant negative surprises. While rate cuts and trade deals might experience delays, the overall direction remains positive with earnings expected to gradually emerge from their trough.
The primary uncertainty lies in the speed of improvement rather than the direction. Geopolitical developments represent the most significant unpredictable risk factor, though the expert sees no immediate macro risks visible on the horizon.
Sector Recommendations: What to Buy and Avoid
Srivastava recommends focusing on interest rate sensitive sectors like banks, automobiles, and metals as relatively safe bets. Growth-oriented sectors including power, digital platforms, and defense are expected to continue driving market movement.
Investors should exercise caution with defensive sectors such as IT, FMCG, and pharmaceuticals unless they're willing to accept potentially lower returns compared to growth-oriented segments.
The expert's analysis suggests that while the market may be discounting healthy earnings growth for fiscal year 2027, the probability of negative surprises remains low given that most adverse factors have already been accounted for in current valuations.
