Indian stocks have continued rising this year as demand from local and international investors rose. The closely-watched Nifty 50 index is sitting near its all-time high of INR 21,722, meaning it has jumped by over 43% from its lowest point in 2022.
India earnings aheadThe Nifty 50 and BSE Sensex index have been in a strong uptrend in the past few months. This rally happened as many foreign investors diversified their holdings to the country. They have also risen as the country’s economic growth continued in 2023.
Most recently, the index has risen because of Adani’s companies. Adani Group stocks have jumped this year after the Supreme Court asked regulators to end their investigations, which were triggered by Hindenburg Research.
Estimates are that the economy expanded by more than 7%, higher than most countries. Analysts expect that the economy will continue growing this year. At the same time, the Reserve Bank of India (RBI) is expected to start cutting interest rates later this year since inflation is falling.
The Nifty and BSE indices will be in the spotlight this week as the US and Indian earnings season starts. In the US, giant banks like Citigroup, JP Morgan, and Wells Fargo will publish their fourth quarter.
Some of the biggest Indian companies will publish their financial results soon. Reliance Industries, HDFC Bank, Hindustan Unilever, and Kotak Mahindra will release their results this month. Other notable companies that will publish their results are Asian Paints, SBI Life Insurance, Paytm, and ICICI Bank.
Analysts expect these results to show moderate earnings growth. Analysts at Nuvama Wealth Management see the companies earnings growing by 10% YoY. Companies with exposure to commodities, exports, and consumers are expected to publish weak results while banks and finance will publish stronger earnings. In a note, an analyst said:
“I feel Q3 is likely to be a period of mixed signals for the Indian market. While cautious optimism is certain, investors should be aware of the potential for short-term volatility.”
Adani Ports is the best-performing company in the Nifty 50 index this year as its stock jumped by 17%. The other top performers were Bajaj Finance, Oil & Natural Gas Corporation, Adani Enterprises, and Bajaj Auto.
Nifty 50 index forecast
The daily chart shows that the Nifty 50 index has been in a strong uptrend in the past few months. This rally accelerated in 2023 as the economy continued growing. It has remained above the 50-day and 100-day Exponential Moving Averages (EMA).
Meanwhile, the Relative Strength Index (RSI) has moved below the overbought level of 70. Similarly, the Stochastic Momentum Index (SMI) has also drifted downwards. Therefore, the index will likely remain in a consolidation phase ahead of earnings. In the long term, the index will rally to the key resistance at INR 22,000.
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