Nifty hits 14,000 on last trading day of 2020. Now what?
3 min read . Updated: 31 Dec 2020, 04:39 PM IST
Premium- For the year, Nifty rose about 15%, its best performance in three years
Indian markets ended the last day of 2020 on a dull note but logged strong gains for the year. Nifty ended flat at 13,981 while Sensex settled marginally higher at 47,751. For the year, Nifty rose about 15%, its best performance in three years. Intra-day, Nifty hit 14,000 levels for the first time.
"We were successful in claiming the 14000 marks but closed below it. There might be a psychological resistance at this level. However, the trend remains bullish and we should be headed higher to 14100-14150 sooner than later. The current support is at 13500-13600 and since the risk-reward is skewed at this juncture, a buy on dips strategy is advised with strict trailing stops," said Manish Hathiramani, proprietary index trader and technical analyst at Deen Dayal Investments.
The Nifty Phrama index, which has been the best performer among the main sub-indexes, gaining about 60% so far in 2020, ended 0.72% higher today.
"For the trend following traders 13935 should be the sacrosanct level to watch. Trading below the same we can expect quick correction up to 13875-13850 On the flip side, 14025 would be the immediate hurdle for the day traders, above the same we could expect further uptrend till 14075-14125," said Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities.
The Nifty IT index, which has rallied more than 55% so far in 2020, was down 0.32% for the day.
Outlook for 2021: Here is what some experts say
Dhiraj Relli, MD & CEO, HDFC Securities
"The continuation of low or zero interest rates globally can keep pushing valuations higher for the world as well as for India. But this ride has to be taken keeping in mind the possibility of sudden and sharp reversal. Smaller companies run lean compared to large companies and tend to do well in times of rapid growth in the economy and high inflation. Over the next six months, as vaccines roll out, the market could continue to broaden and favour small caps and value stocks."
Jaideep Hansraj, MD & CEO, Kotak Securities
"We see markets behaving differently in first half and second half of CY21. Q3 earnings season could turn to be strong due to healthy advance tax figures and also lead to some earnings upgrades. We can expect Nifty to go anywhere between 14,000 & 15,000 range sometime in first quarter of CY21. Post budget and Q4 result season we expect markets to go into some kind of consolidation phase and witness time correction. We expect moderation in monetary policies and rising yields scenario in 2HCY21, which will lead to mean reversion of valuations towards 10/15 year averages. Based on these thesis we have used the previous 15 years peak of 19x Fw PE multiple to value the Nifty-50 to derive at our CY21 end target. We expect Nifty-50 to end CY21 somewhere around 13,500 and BSE Sensex to end at about 46,000."
B Gopkumar, MD & CEO, Axis Securities,
"The year 2020 was a rollercoaster ride, to say the least. The stock markets in 2020 witnessed a fascinating trend. As the market corrected significantly, retail investors started buying quality stocks realizing the value in these companies. Also, lockdown resulted in more people taking to the equity markets and learning nuances. This shift has significant long term implications as more and more participants will be seen in 2021.
The year 2020 also showed us the resilience of the Indian economy. We performed much better than most developed countries that have far superior health care facilities. Even with a lockdown in place, the Indian corporates managed their cost structure very well and adapted to the conditions better than expectations. India has seen multiple shocks over the last 15 years, due to which the economy has become more resilient, and the pandemic has made it even more resilient.
2021 will be a year of growth. We expect the GDP growth rate in 2021 to be closer to double digits, and earnings growth to be 30%+ for India Inc. Union Budget in 2021 could also be a blockbuster. Putting these perspectives together, we are likely to see a robust 2021."
