Nifty 50 At It Again As It Hits New Record Highs

Summary:
• The Nifty 50 Index has been on the uptrend since early June, and hit new record highs on Wednesday as positive sentiment drives growth

The Nifty 50 Index, India’s benchmark market Index, rose to new record highs on Wednesday, hitting 24,309 points in the intraday session.  After declining marginally by 0.07 percent on Tuesday, the Index returned to the upside, staying on an upward trajectory that goes back almost a month ago to underline the bullishness in Indian stock markets.  40 of the 50 stocks in the Index ended the day with gains on Tuesday. The S&P BSE Sensex, another flagship market index also flashes strength, having crossed the 80,000 points mark for the first time.

The Nifty 50 Index could grow further if the HDFC Bank weight is adjusted upwards on expected inflows of between $3.2 billion and $4 billion in the next week. India’s largest lender is set to extend its stake in the Index after news that its weightage in Morgan Stanley’s MSCI index will be raised. That will allow more foreign institutional investors to increase their stake in the bank. Generally, India’s bank stocks are on the uptrend as market sentiment around the Indian economy points to increased liquidity.

Outside of India, the UK’s FTSE 100, France’s CAC 40, Germany’s DAX, Japan Nikkei and Hong Kong’s Hang Seng indices also registered significant gains at the time of writing on comments by Federal Reserve Chairman Jerome Powell. The Fed Chair stated on Tuesday that US inflation had shown signs of subsiding, raising hopes of potential interest rate cuts in the third quarter of the year. However, those comments will come into broader perspective on Friday when the US Nonfarm Payrolls data come out.

Technical analysis

The momentum on the Nifty 50 Index currently signals the continuation of the upside from the pivot point at the 24,282.45 mark. The momentum will likely encounter the first resistance at 24,307.30, and potentially head higher to test 24,338.10 in extension. On the other hand, if the action goes below the 24,282.45 pivot, it could signal that the sellers are in control.  That could see the first support established at 24,255.40 If the sellers stay in control, the support will likely be broken, sending the next support lower to test 24,222.65 in extension.