Popular domestic market index, Nifty50, is expected to witness a massive surge in the coming weeks, and is poised to better its 52-week high of 8,900 recorded in September last year, market experts have claimed.
This comes even as several global indicators including the European economic turmoil, rate-cut fears from the US Federal Reserve, demonetisation, and Trumponomics have evoked uncertainty in markets.
The record high of 8,900 posted in September is indicative of impressive market resilience, paving the way for further upswing even amidst negative global economic indications. The index has already been gaining consistently in the last few weeks, after it hit a temporary low of 7,900 in December.
The downswing in December was mostly due to the government’s demonetisation move that affected output in many domestic sectors. The index has gained a healthy 13 percent since its low point in December last year.
Besides the Nifty50 index, the S&P BSE Smallcap and the Nifty MidCap indices also reached record highs, giving investors a good reason to rejoice. Moreover, the index witnessed a breakout on Friday last week and went on to form a Golden Cross on Monday, fundamentally indicating that it will be on a consistent upswing in the short to medium term.
The Golden Cross formation is a phenomenon that occurs when the moving average for the short term overshoots the moving average for the long term, a healthy sign for the index. Experts claim that the performance of domestic market indices are in a good position to attract investments from FIIs.
Recent estimates point out that FIIs have already purchased shares worth a whopping Rs.9,000 crore this February. This comes as a good sign for the markets after FIIs sold heavily in December amidst the rupee falling significantly against a strong US Dollar. January figures indicate that FIIs sold shares worth Rs.1,177 crore.