Indian stock market: Sensex jumps 400 points, Nifty 50 tests 25K. What next?
Investor sentiment improved after global markets gained on hopes of progress towards a resolution of the Russia-Ukraine war. Optimism was fuelled by diplomatic engagements, including US President Donald Trump's meetings with Ukrainian President Volodymyr Zelensky, top European leaders, and earlier talks with Russian President Vladimir Putin.
On the domestic front, Prime Minister Narendra Modi's announcement of a major reform in the Goods and Services Tax (GST) structure provided a further boost to equities.
Analysts noted that rationalisation of GST rates could improve household consumption with limited fiscal cost, though the eventual impact on demand and corporate profitability would depend on the extent of benefit passed on by companies.
From a technical standpoint, the Nifty 50 continues to trade above its 20-day simple moving average (SMA) at 24,750, a positive indicator for market momentum. However, analysts remain cautious around the 25,000 level, which is acting as a key resistance zone.
'Nifty for the second straight day is struggling near the quarterly VWAP placed around 25,000 levels, which is acting as a key supply zone,' said Anshul Jain, Head of Research at Lakshmishree Investments.
He expects the index to consolidate in the 24,800–25,000 range for several sessions before attempting a sustainable breakout. 'Once a decisive move occurs above 25,000, fresh momentum should trigger, opening the path for Nifty 50 to test 25,250 in the near term,' Jain added.
Rajesh Bhosale, Equity Technical and Derivative Analyst at Angel One, highlighted that Nifty 50 has managed to break above the 24,750 hurdle that capped the index for the past two weeks.
'Prices have reclaimed the key 20 and 50 DEMA, with a bullish gap visible on daily and weekly charts. This suggests that dips should be viewed as buying opportunities. Immediate support lies between 24,700 – 24,800, while resistance is seen at 25,000 and subsequently 25,150. A sustained move beyond these levels could take the index towards 25,500,' Bhosale noted.
Shrikant Chouhan, Head of Equity Research at Kotak Securities, maintained an optimistic short-term outlook.
'For day traders, a buy-on-dips and sell-on-rallies strategy is advisable. Key support levels are at 24,700 and the 20-day SMA of 24,750, while significant resistance stands at 25,000 and 25,100. Buying between 24,700 and 24,750 with a stop-loss at 24,600 is recommended,' he said.
Analysts noted that a sustained breakout above the 25,000 mark could set the stage for further gains, while consolidation in the current range may help build strength for the next leg of the rally.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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