By Samir Al Khoury,
There is no doubt that Indian markets have been affected by the overwhelming political atmosphere in the recent period. We witnessed a record rise in the Nifty 50 index, reaching 23,338 points on Monday, June 3, 2024, following expectations that Indian Prime Minister Narendra Modi would secure a majority of parliamentary votes. Contrary to these expectations, the Nifty 50 index fell to its lowest level since January 25, 2024, on the day of the election results, recording 21,281 points after Modi lost a significant number of seats.
However, due to political alliances formed by Modi for the first time since he took power in 2014, the Nifty 50 index rose again, reaching 23,230 points today.
India is considered the third-largest economy in Asia after China and Japan in terms of gross domestic product (GDP), which currently stands at about 3.5 trillion US dollars. The consumer price index (CPI) on an annual basis in India recorded 4.83% in April, which was higher than expectations (4.80%) but still far from the Reserve Bank of India’s target rate of 4%.
Regarding Indian stocks, the Nifty 50 index has risen by about 10% since its low on January 24 this year, when it recorded 21,137 points, to the peak recorded last Monday at 23,338 points. The index is currently hovering near the 23,200-point level. The GOLDEN CROSS between the 50-day moving average (in blue) at 22,475 points and the 200-day moving average (in yellow) at 21,146 points remains in place, indicating upward momentum for the Nifty 50 index.
Despite Indian stocks reaching record levels, along with high earnings multiples of about 20 times, it appears that the upward trend for Indian stocks will prevail in the next stage, especially with the expectations of continued foreign investment flows into Indian markets.
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.
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