Nifty may reach 25200 level by December 2024: ICICI Securities

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New Delhi: The strength of the Indian stock market is expected to continue in the upcoming time as ICICI Securities Ltd. believes Nifty will reach the level of 25200 by December 2024. Adding its long-term projections, the ICICI arm said in its June report that the Nifty index is on track to reach our long-term goal of 50,000 by the year 2030.

The Nifty is a benchmark Indian stock market index that represents the weighted average of 50 of the largest Indian companies listed on the National Stock Exchange (NSE). The capital market company further stated that it expects a strong support level at 22,200, meaning the index is likely to stay above this level even if it faces some downturns.

Elaborating on the method used for this projection, it said, historically during election years since 1999, the Nifty index has typically increased by around 21 per cent from its lowest point after the election to the end of the year. These gains usually come with small dips of 4-6 per cent, which offers a good buying opportunity.

Since June 2022, every 10 per cent drop in the Nifty has been followed by a 20 per cent increase over the next six months. If this pattern continues after the election results, then there are chances that the Nifty will reach the 25,200 level by the end of December. It further added when the US goes into the presidential elections the global markets generally rise. In the last five US election years, US markets have gained about 9 per cent from June to December, while the Nifty has gained around 20 per cent, except in 2008. It projected that the steady global markets would act as a tailwind for domestic equities

In terms of fund flow, local investments have helped counter the selling by foreign investors. If foreign investment picks up in the second half of 2024, along with possible interest rate cuts in the US, it will further improve market liquidity, the report anticipated. Showing optimism on Market breadth, which measures how many stocks are rising versus falling, it stated that the trend now supports a positive outlook. Midcap and small-cap stocks are in a strong upward trend and are expected to gain over 16 per cent by the end of the year.

Enthusiastic about the current year, ICICI Securities added,” Empirically, the fourth year of the decade has always been positive with acceleration in returns to higher teens (median values). It is worth noting that such returns do not come in a linear fashion and corrections of around 15 per cent along the way have always been a buying opportunity.”

ICICI Securities Ltd. suggests top picks in the BFSI sector such as SBI, Axis Bank, HDFC Bank, Kotak Mahindra Bank, and Bank of Baroda. Under the PSUs, its top picks are HAL, BEL, Sail, Coal India, NTPC, Engineers India, NMDC, Concor, and Union Bank of India.

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