The Nifty index has reached a significant milestone by touching the 20,000 mark, marking a successful second attempt since July 2023, according to Dhiraj Relli, MD & CEO of HDFC Securities. This achievement has been attributed to robust flows from local investors, even in the face of mixed and negative flows from foreign investors.
Impact of Local and Foreign Flows
Rising sentiment in Indian stocks has been bolstered by recent achievements in space exploration and foreign diplomacy, especially considering the uncertain global situation. Notably, small-cap and mid-cap stocks have seen substantial and, in some cases, seemingly unjustified surges in value. As a result, experts recommend a review of asset allocation, profit booking, and raising some cash as a prudent approach.
India’s Recent Achievements Boost Sentiments
Rupak De, Senior Technical Analyst at LKP Securities, notes that the bullish trend in the market has been dominant as the benchmark Nifty index surged to an all-time high, surpassing the 20,000 mark for the first time. This remarkable rally followed a breakout from a descending channel observed last week. Looking ahead, market sentiment is expected to remain positive as long as the Nifty remains above the crucial 19,900 level.
Caution on Small-cap and Mid-cap Stocks
In terms of technical analysis, an immediate resistance zone can be identified between 20,100 and 20,200. If the Nifty convincingly breaks through the 20,200 level, it could potentially open the path for further gains, with the index targeting the 20,500 mark.