Can Nifty climb to a new all-time high after better-than-expected GDP of India?

NSE Nifty extended its tepid movement for second straight session on Thursday despite better-than-expected GDP of India. On Wednesday, National Statistical Office (NSO) announced Q4 GDP of India at 6.1 per cent, which was around one per cent higher the expected GDP of 5.1 per cent during January to March 2023 quarter. However, the 50-stock index has managed to sustain above its immediate support of 18,460, its recent swing high levels. So, market experts are expecting that Nifty may bounce back strongly from its support levels and in that rally we may expect the Indian benchmark index to climb a new life-time high, breaching its current record high of 18,887.60.

Decoding US debt ceiling bill, GDP of India impact

On why there can be a strong pull back at Indian stock market, Santosh Meena, Head of Research at Swastika Investmart said, "The recent deal on the US debt ceiling had already been anticipated and taken into account by the market, resulting in the absence of a significant downturn and a rally despite the prevailing chaos surrounding the issue. In addition to this, there has been a stream of positive news, including robust GDP data, the resolution of the US debt ceiling, a decline in commodity prices, and increased Foreign Institutional Investor (FII) activity."

"While these factors contribute to an overall bullish outlook for our market, it is important to consider the possibility of profit booking in the near term. With many aspects already factored into current market prices, profit booking could occur as investors look to capitalize on gains. However, this potential pullback in the market presents an excellent opportunity for investors to buy into the market at favorable prices," Swastika Investmart expert said.

Sectors that may fuel Nifty

On sectors that may fuel Nifty to new highs after strong Q4 GDP numbers of India, Vaibhav Kaushik, Research Analyst at GCL Broking said, "After strong GDP numbers and Q4 results season, growth and demand it expected to remain intact in the national economy that may fuel banking, auto, real estate and capital goods segment and people love investing in these segments after rise in income." He said Nifty has missed to hit new high on three previous occasions and next rally after the current correction could be an ideal one if the rebound happened without breaching its current support placed at around 18,450 levels, its previous swing high levels.

Can Nifty climb a new peak?

Expecting strong rebound after the current correction, Vaishali Parekh, Vice President — Technical Research at Prabhudas Lilladher said, "Nifty has resisted near the 18,650 zone and with profit booking seen has witnessed a slide touching 18,500 levels and has turned down the daily trend. With the long term bias and trend maintained positive, a short correction is healthy for the market after the decent rise witnessed and has the near-term support zone near 18,460 zone from where we anticipate for further gains to continue." She said that once Nifty breaches its current resistance placed at 18,650 on closing basis, we can expect the 50-stock index to go up to 18,800 to 18,900 levels and climb to a new record high.

GDP of India for Jan-March 2023

The Central government's NSO office on Wednesday released India's Gross Domestic Product (GDP) data for the January-March quarter (Q4FY2023). In the quarter, India's economy sees significant growth and merrier-than-estimates. In Q4FY23, GDP growth is at 6.1 per cent compared to 4.4 per cent growth rate witnessed in Q3. Street had expected a growth of 5.5 per cent during the 4th quarter of FY23.

Overall, the growth in FY23 fiscal is better-than-expected to 7.2 per cent. However, the FY23 growth has slowed down from 9.5 per cent growth in FY22.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.