Nifty hits 20,000-mark; 21,000 by Diwali? Here’s what analysts say

The National Stock Exchange's benchmark index, Nifty50, created history on September 11 by crossing the 20,000 levels for the first time, on the back of broad-based rally, led by power and auto indices. The 50-share index rallied 1,000 points in less than three months after hitting 19,000 marks on June 28, 2023.

The benchmark index surged 10% in the calendar year 2023 and 11.5% in the last one year, while it rebounded 18% from this year’s low of 16,945 points touched on March 24, 2023. The recent rally in the equity market can be attributed to sustained foreign capital inflows amid improved domestic macroeconomic conditions.

On Monday, the NSE Nifty started the day on a positive note, boosted by the historic consensus achieved at the G20 summit, which bolstered confidence among investors. During the session, the benchmark index gained as much as 188 points to hit fresh all-time high levels of 20,008 in intraday, before settling at new closing high of 19,996 mark. The index has been rising for the last seven straight sessions and gained 2.9% during the same period.

Meanwhile, the BSE benchmark Sensex ended 528 points higher at 67,127 mark, after touching its fresh all-time high levels of 67,169 in intraday trade. The 30-share index hit its record closing high of 65,880 on September 6, 2023. In the last one year, the Sensex has rallied nearly 12%, while it grew nearly 10% year-to-date (YTD).

Will Nifty hit 21,000 by Diwali?

Given the recent momentum in the domestic equity market, analysts expect Nifty50 to cross 21,000 by Diwali this year.

Rahul Sharma, Director, Head-Technical & Derivative Research, JM Financial Services, says the Nifty is on track to hit 20,432 this month and 21,000 by Diwali.

"Last few days where weeks have happened in just a few days are testimony to the undertone of this Bull Market. The good thing is there new leadership from IT, Capital Goods and PSE's. BFSI which remained under most pressure is back to positive territory. We are on track to hit 20,432 this month and 21,000 by Diwali," says Rahul Sharma. 

Apurva Sheth, Head of Market Perspectives & Research, SAMCO Securities says Nifty has enough room for further expansion especially given that we are entering an election year, the room for upside is wide open.

“Nifty crossed the psychologically important mark of 20,000 points on September 11. With a breach of this important resistance level, we believe that the next target to look forward to in Nifty is 21,500, which is 3,000 points from the main breakout level of 18,500. Despite the markets hitting new all-time high the valuations are still reasonable. Nifty’s trailing twelve months PE is at 22.39 which is slightly above its long-term median of 20.62,” he says.

According to Sheth, it is notable that the sectors which pushed the Nifty up till 20,000 may not be the same which will push it to 21,500. “Nifty may have hit an all-time high but not all the sectoral indices have followed it... Bank Nifty is also trading at a relatively cheap valuation. Thus, Banks and IT could be the sectors which may take the index higher from the current level.”

Rupak De, Senior Technical analyst at LKP Securities, says the market sentiment is expected to remain upbeat as long as the Nifty stays above the 19,900 level. “On the upside, we can identify an immediate resistance zone between 20,100 and 20,200. If there is a convincing breakthrough above 20,200, it could pave the way for the Nifty to advance towards the 20,500 mark."

DISCLAIMER: The views and opinions expressed by investment experts on fortuneindia.com are either their own or of their organisations, but not necessarily that of fortuneindia.com and its editorial team. Readers are advised to consult certified experts before taking investment decisions.