The Nifty, India’s benchmark index, is set to enter the new year on a positive note. The index has been on an uptrend since October and is currently just above the 14,000 mark. This indicates that despite the numerous headwinds faced by the Indian economy in 2020, the stock market has largely held up well.
Despite the economic woes of the last few months, analysts expect the Nifty to start 2021 on a strong footing. This is in-line with the bullish sentiment in the equity markets. The sentiment is being driven by strong inflows of foreign investments in Indian equities and positive macroeconomic data.
The growth in investments has been backed by several key developments such as the government’s focus on continued infrastructure development and reforms in direct and indirect taxes, among others. This has led to increased investor confidence and improved sentiments in the equity markets.
Experts expect the Nifty to remain range-bound in the near term and may even test its lifetime high of 15,714. On the downside, the index has good support below the 14,000 mark. Going forward, unless there are major shocks or a negative surprise in the quarterly results, it is expected that the index will remain range-bound in the near-term.
Moving ahead into 2021, experts believe that the Union Budget and the Reserve Bank of India’s monetary policy will be the key drivers of the market in the near term. The Budget is expected to focus on infrastructure development and macroeconomic stability, while the monetary policy announcement will likely feature a accommodative stance as the RBI seeks to ease liquidity constraints and provide more growth impetus to the economy.
Overall, the outlook for the Nifty remains positive and investors should look to use this opportunity to capitalize on the available market opportunities. However, investors should be cautious and exercise risk management when making any investment decisions as the stock market is ever-changing and unpredictable.