Domestic markets are expected to continue their momentum thanks to positive global sentiment. The Nifty 50 has risen for 11 consecutive days, its longest winning streak since October 2007, according to market participants.
Gift Nifty at 25,290 signals a positive bias for the domestic market. Despite the strong rally in heavyweights, analysts expect the momentum to continue, on the back of sound macroeconomic conditions.
Moody’s projection
Global firm Moody’s Ratings has raised India’s growth projection for calendar year 2024 and 2025 to 7.2 and 6.8 per cent, respectively. Earlier, the projection was 6.8 per cent 6.4 per cent for 2025.
“These forecast changes assume strong broad-based growth and we recognise potentially higher forecasts if the cyclical momentum, especially for private consumption, gains more traction,” the firm said its latest Global Macro Outlook. Further, it said that the economy expanded 7.8 per cent year-over-year in the first quarter of 2024, despite the persistence of tight monetary policy and demonstrated progress on fiscal consolidation.
Fitch Ratings has affirmed India’s sovereign rating at ‘BBB Minus’ with a stable outlook. It also said India is set to remain among the fastest-growing sovereigns globally. Sovereign rating is used as one of the parameters for investment decisions by foreign investors. ‘BBB Minus’ is the last investment grade.
Siddhartha Khemka, Head - Research, Wealth Management, Motilal Oswal Financial Services Ltd, said: “The market continued its winning streak for the 11th consecutive day and we expect this gradual uptick to continue, with Nifty making fresh highs day-on-day. This will be supported by India’s rating being maintained globally (rating agency Fitch affirmed India’s rating at ‘BBB-’ with a stable outlook) on the back of a strong medium-term growth outlook and strengthening fiscal credibility.”
Meanwhile, foreign portfolio investors have turned net buyers in the cash segment in the last few days. On Thursday, they bought shares worth ₹3,260 crore worth shares. Interestingly, both FPIs and DIIs were net buyers in the last few days, especially in the large-cap space.
Rajesh Bhosale, Equity Technical Analyst, Angel One, said: The August expiry session began on a flat note, but as the day progressed, prices gradually climbed to fresh new highs.
The action-packed August series ended with robust gains of over 3 per cent, supported by eleven consecutive sessions of daily advances. “With today’s strong close, prices have now surpassed the previous swing high, confirming a ‘Saucer’ formation and signalling the potential for further upside,” he said. However, it’s worth noting that the broader market has shown some weakness in recent days, with only a few heavyweights driving the index higher. Therefore, the next sessions will be vital for determining the market’s direction. Traders are advised to closely monitor the key levels and make informed decisions rather than reacting impulsively, he said.