The index has been hovering in a narrow range of 24,363.3-25,541.8 since 30 June. In the last two days, it has gained 1.8%, raising hopes of a rally around the 25,669 level.
“For Nifty, a point of 24,600–24,700 becomes a decent support zone and the market could rally up to 25,350- 25,500 because of a positive push from renewed trade deals between India and US,” said Sudeep Shah, head of technical and derivative research at SBI Securities.
Though it is always too early to comment in the case of Trump, markets are already seeing a momentum on the back of falling interest rates and GST cuts, he said. “Plus India has been approaching other countries for trade deals which will open new business opportunities,” added Shah.
The Nifty 50 index is currently trading 0.15% higher at 25,004.25. The fear gauge or volatility index also points to a positive sentiment, falling 7.9% since 3 September. It has declined 15% since 30 June.
Since the new Goods and Services Tax (GST) rates were announced on 3 September, the markets have gained 1.6% in the last six trading sessions. The movement may not be huge, but markets have been on an uptrend.
Experts said US President Donald Trump’s comment that India and the US are “actively negotiating” to resolve trade barriers could fuel a rally in markets.
Devarsh Vakil, head of Prime Research at HDFC Securities said after the Nifty 50 index extended its rally for the sixth consecutive day, it remains positioned above all key moving averages, indicating a bullish configuration that supports further upward momentum.
Immediate resistance stands at 25,153, marked by the previous swing high, while 24,800 provides the nearest support level on any pullback, he added.
FIIs are also covering their short positions. FII index futures long-short ratio has moved up to 10.22 on a net basis from 8.08 on 3 September. During 3-10 September, it had touched a record low of 7.43.
The FII long-short ratio represents the proportion of long or buy positions to short or sell positions taken by FIIs. A higher ratio means FIIs are more optimistic and holding more long positions, indicating bullish sentiment, while a lower ratio suggests they are heavily short, signalling caution or bearishness.
Some experts, however, caution against over-optimism which was reflected in the Nifty 50’s movement since the announcement of GST on 15 August.
Post the announcement, it took four trading sessions for the Nifty index to move from 24,876 to 25,083. But, it has not been able to reach the 25,083 levels even in 13 sessions. “This shows the market lacks strength,” said Siddarth Bhamre, head of research (Institutional equities) Asit C Mehta Institutional Investments Ltd.
Bhamre said that market movements boil down to money flows, earnings, and valuations, which has not changed for Indian markets fundamentally—in fact, things are starting to look weak. “Apart from GDP numbers, no other metric shows significant growth, and valuations remain expensive,” he added.
Global financial services firm Morgan Stanley said a soft earnings patch seems to be ending, but the market is probably not convinced yet. In a report dated 4 September, it said a dovish central bank is currently helping the economy by making borrowing cheaper and encouraging investment and spending.
However, for businesses and investors to feel truly confident about sustained economic growth, they need clearer signals on external growth environments and GST rationalisation, the report added.
Anand Vardarajan, chief business officer at Tata Asset Management, said that markets have already priced in the uncertainty around tariffs.
“Markets remain in a congestion zone due to tariff and the overhang of other global factors. We are unlikely to see any major changes unless some of these clouds clear up,” he added.
