Expert view: Rohit Srivastava, founder and market strategist at Indiacharts.com, believes the Nifty 50 can easily reach 26,800 by year-end. Positive news flows from the US Fed and RBI rate cuts, as well as an India-US trade deal, may drive the index to 27,500 by the end of 2025. In an interview with Mint, Srivastava shared his views on the Indian stock market and sectors he is positive about. Here are the edited excerpts of the interview:
Do you expect the Nifty 50 to sustain its gains in December? What do technical charts indicate?
November saw a lot of volatility due to global markets, but that should be behind us. Improving earnings picture and expectations of interest rate cuts are going to pave the way ahead for further gains in December.
Weekly and daily momentum indicators remain bullish, and the market is making slow and steady gains.
Weakness in the mid and small-cap stocks was also seen in the second half of the month, which unnerved a lot of investors, but here also, the earnings momentum has started to pick up, and we should see more stability going forward.
The 20-day advance/decline ratio is in oversold territory, indicating little downside in the broad market going ahead.
What is your target for the Nifty 50 for the end of 2025? What are the key factors that can drive the index higher?
Nifty took support multiple times near 24,500 and has now decisively moved past 26,000.
In the coming weeks, we can easily reach 26,800. If we receive additional positive news from rate cuts and a trade deal, reaching 27,500 might also be possible before the end of the year.
There is also a market discounting the festival season sales, which will be reflected in the Q3 numbers when they are announced in January. The market will run ahead of these announcements, discounting them.
Nifty Bank is at a record high. What can you expect it to touch by the end of this year?
Banking stocks have outperformed globally. In the US, the most recent correction saw bank stocks fall the least. This is due to the near certainty of the trajectory of interest rates.
In India, credit growth has resumed, with the growth rate increasing from 9% to 11.3% in October.
This slow expansion means more business and profits. Banks are also the most undervalued sector in a river of overvalued stocks.
Thus, banking is the new safe haven for institutional investors worried about valuations.
The market may be discounting healthy earnings growth in FY27. Do you see there could be a negative surprise in terms of earnings next year?
Most of the bad news is already out there, and therefore, the odds are that things can only get better. A trade deal can be delayed but not ruled out. Rate cuts can be delayed but not ruled out.
So, the direction is clear – the earnings cycle will grow slowly out of the trough, but it can also accelerate. The chances of negative surprises are low right now. What we do not know is the speed of change.
Apart from weak earnings, what are the other key risks that can spoil the party next year?
Geopolitics is always hard to predict and discount, so we can list all the geopolitical problems of the time and consider them as risk factors. The good news is that there are no macro risks as of now visible.
For example, a strong dollar could be a currency risk, but the US is likely to print more and more dollars, and therefore, relatively speaking, the dollar will be weak.
What sectors look attractive to you at this juncture?
Interest rate sensitive sectors like banks, autos and metals are the easy bet. Growth engines like power, digital platforms and defence will continue to move markets. Avoid defensive sectors like IT, FMCG and pharma unless you want to lag behind in returns.
Read all market-related news
Read more stories by
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of the expert, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.