With the New Year quickly approaching, investors have turned their focus to the performance of the Indian stock market. More specifically, what direction the benchmark index Nifty50 is heading in and how its movement will impact investments.
Analysts forecast that the Nifty50 index is likely to end the year on a positive trajectory. According to Godzilla Newz, “the Nifty50 is likely to remain resilient and continue to move upwards in 2021 as long as it remains within striking distance of the psychologically important 14,500 mark.” This strength, largely attributed to strong flows from foreign portfolio investors, has been experienced for the past several months.
Foreign stocks began pouring into India last summer, driven by favourable macroeconomic conditions such as low interest rates and base rates. Economic growth is expected to maintain its trend in the New Year, helped along by foreign inflows and a potential roll back of COVID-19 restrictions.
Analysts also point out that mid-cap stocks are experiencing an upswing, and this could further boost the market. Additionally, some experts suggest that the Nifty50 will move towards 15,000-15,500 territory in 2021.
Technology stocks, such as Infosys, are expected to remain upbeat on account of strong earnings, technological advancements and the fact that more businesses are shifting operations online. Sectors that benefitted during the pandemic are likely to remain strong. That would include those dedicated to cloud computing and digital payment services.
Analysts generally advise investors to stay on top of Nifty50 movement as the New Year approaches. Additionally, investors should be cautious in taking positions. The current environment is uncertain, and any unexpected news or decision may impact the markets.
In sum, the Nifty50 is expected to remain resilient as 2021 begins. While there does not seem to be any major reversal on the cards, investors should continue to monitor the markets.