Nifty 50 Index Forecast: Brief Rebound Seems Likely

The Nifty 50 index pulled back as global investors eyed the start of the US earnings season. The index slipped to a low of 15,965 INR, which is lower than this week’s high of 16,267 INR. It has dropped by about 12% from its highest level in 2022, meaning it has outperformed its American peers like the Dow Jones and Nasdaq 100.

Why are Indian stocks falling?

The Nifty 50 index has done better than American and European stocks in 2022 as business activity has remained vibrant in the past few days. For example, while business consolidation has slumped in the US, it has surged in India. Recent data shows that deals worth over $85 billion have been announced this year.

At the same time, the Indian energy sector has done well as companies have taken advantage of the relatively cheap oil and gas from Russia. Moreover, the heavily sanctioned country has offered significant discounts to buyers from India and China. As such, many energy players like Reliance have benefited.

Another possible catalyst for the Nifty 50 and Sensex is that some analysts see no major urgency for the Reserve Bank of India to continue its rate hikes. This is despite the fact that inflation is still a thorn in the flesh of the country.

The Nifty 50 index is sliding as investors focus on the surging US inflation and the upcoming earnings season. Data from the US showed that the country’s inflation surged to 9.1% in June, pushing many investors to price a 100 basis point rate hike. 

The earnings season will start on Thursday as companies like JP Morgan, Wells Fargo, and Morgan Stanley are set to publish their result. These results will provide more information about the state of the global economy.

Most Nifty 50 constituents were in the red. The best performers were companies like Divi’s Labs, JSW Steel, Cipla, Asian Paints, and Kotak Mahindra Bank. On the other hand, the biggest laggards were firms like IndusInd Bank, Bharti Airtel, Reliance Industries, and Tata Consultancy.

Nifty 50 forecast

The four-hour chart shows that the Nifty 50 index has been in a bullish trend in the past few days. Along the way, it has formed an ascending channel pattern that is shown in blue. The current price is along the lower side of the channel. The index is still slightly above the 50-day moving average. It is slightly above the 23.6% Fibonacci retracement point.

Therefore, the index will likely resume the bullish trend as buyers target the upper side of the channel at 16,295 INR. A drop below the support at 15,900 INR will invalidate the bullish view. Subscribe to our highly accurate S&R indicator for excellent trading signals.

Nifty 50