By Samir Al Khoury,
The Indian Nifty 50 index continues its upward trajectory, recording 24,461 points yesterday, its highest level ever. It has also risen by approximately 16% since its low on 24 January 2024, when it recorded 21,137 points. As of now, it is trading near 24,300 points.
These notable increases in Indian stocks are attributed to several factors, the most significant of which are:
• Large foreign investment flows into Indian markets, especially following the victory of the new government under Indian Prime Minister Narendra Modi in June 2024. This victory reflects substantial confidence in Modi from foreign investors.
• Indian economic data exceeding analysts’ expectations, such as the rise in the manufacturing and services Purchasing Managers’ Indices (PMI), recording 58.3 and 60.5 points, respectively, in June 2024. These figures are higher than previous readings.
• The Consumer Price Index (CPI) on an annual basis in India recorded 4.75% in May, which is lower than both expectations (4.90%) and the previous reading (4.83%). However, it remains above the Reserve Bank of India’s target rate of 4%.
Indian interest rates have remained fixed at 6.50% since February 2023 by the Reserve Bank of India. According to Bloomberg, easing interest rates may attract more foreign investments to the country.
Despite Indian stocks reaching record levels and high earnings multiples of about 23 times, the upward trend for Indian stocks is expected to continue, particularly with ongoing foreign investment flows into Indian markets.
Technical indicators also seem to support the Nifty 50 index in the next phase for several reasons:
1. The Relative Strength Index (RSI) is currently at 68 points, close to the overbought area, indicating upward momentum for the Nifty 50 index.
2. The MACD indicator is in blue and exceeds the signal line in orange in the positive area.
3. The moving averages for 20, 50, and 200 days are in an upward trend, with the 20-day average exceeding the 50-day average, and the 50-day average exceeding the 200-day average.
These factors suggest that the Nifty 50 index is poised to maintain its upward momentum.
Please note that this analysis is provided for informational purposes only and should not be considered as investment advice.
Taurex is the trading name of Zenfinex Global Limited, Stochastic Africa SL Ltd, Zenfinex Global LLC, and Zenfinex Limited.
Zenfinex Global Limited is registered in the Republic of Seychelles with registration number: 8428731-1 and is regulated by the Financial Services Authority of Seychelles (license number SD092). Its registered office address is F20, 1st Floor, Eden Plaza, Eden Island, Seychelles.
Stochastic Africa (SL) Limited is a company registered in Sierra Leone with Company Number: SL270319STOCH05271 and is licensed by the Bank of Sierra Leone under license number BSL/SAL/2023 and with the registered office at 148D Wilkinson Road, Freetown, Sierra Leone.
Zenfinex Global LLC is a company registered with the Financial Services Authority in Saint Vincent and the Grenadines under registered number 138 LLC 2019. Its registered office is Hinds Building, Kingstown, Saint Vincent, and the Grenadines.
Zenfinex Limited is a company registered in England and Wales under registered number: 11077380. Authorised and regulated by the Financial Conduct Authority under firm reference number 816055. Its registered office is 4th Floor, 4 Eastcheap, London, EC3M 1AE, United Kingdom.
*All trading involves risk.
