Nifty 50 index forecast: Will Indian stocks retest the all-time high?

The Nifty 50 index moved sideways on Thursday as traders repositioned for the upcoming interest rate decision by the Reserve Bank of India (RBI). The pair was trading at ₹19,583, where it has been in the past few days. This price is a few points below the all-time high of ₹19,991.

RBI interest rate decision

The Nifty 50 index, which tracks the top Indian companies, has done well in the past few months. Like some of its European peers like the CAC 40 and DAX index, it recently moved to its highest point on record. It has jumped by over 16% from the lowest level in April.

The next important catalyst for the Nifty 50 index is the upcoming interest rate decision by the RBI. As I wrote in this report, most analysts believe that the RBI will leave interest rates unchanged at 6.5% 

The exact move will not have a direct impact on the Nifty 50 and the BSE indices. Instead, the two will react to the forward guidance by the bank. A sign that it will start cutting rates earlier than Q1 of 2024 will be a positive thing for Indian stocks.

The biggest gainers in the Nifty 50 index on Thursday were Adani Enterprises and Adani Ports, whose shares jumped by more than 1.25%. These stocks rose after a Bloomberg report said that Adani was considering selling the $6 billion Wilmar stake. 

Adani has not confirmed the reporting. Such a move will provide it with the funds it needs to pay off some of its debt. Based on Wilmar’s $6.7 billion valuation, Adani’s stake is estimated to be worth about $3 billion.

After plunging a few months ago, Adani Enterprises’ share price has risen by over 150% from the YTD low. It remains sharply lower than the YTD high. Other top performers in the Nifty 50 index were Oil & Natural Gas, Bharat Petroleum, and Cipla.

Nifty 50 index forecast

The daily chart shows that the Nifty 50 index has been in a strong bullish trend in the past few months. It recently flipped the important resistance at ₹18,887 (November 30th 2022 high) into a support. The index is being supported by the 50-day and 100-day moving averages even as the MACD forms a bearish divergence pattern.

The outlook for Indian stocks is bullish, with the immediate target price being at ₹19,991, the highest point in July. This view will become invalid if the price moves below ₹19,290.