The Nifty 50 Index rose marginally on Thursday to record the second successive day of gain. Indian stocks are struggling under selling pressure as foreign investors exit in droves amid lower-than-expected earnings reports and a cooling economy. The Nifty 50 Index was at 23,1with 47 points, having risen by+0.8% at the time of writing.
Nifty 50 is down by 2% year-to-date and has been on a steep decline since September 2024. Foreign institutional investors have been net selllers of Indian equities since the year begun, adding downward pressure on the Nifty 50 Index. Their net outflows stood at $770 milllion as of a week ago.
The pressure on equities is exacerbated by rising yields on US treasuries, which has created better investment options for many foreign institutions. Looking ahead, the medium-term outlook for the index is not rosy, after the Indian government revised downwards its economic growth projections from 8.2% to 6.4% in its most recent forecast.
After years of sustained increase in growth growth rate, the Indian economy is signaling signs of exhaustion. The FY 2025 growth rate is the the lowest in four years, amid declined output by leading industries like energy, auto manufacturing and real estate. The Nifty 50 Index grew by about 8.75% , but a recent forecast by HSBC estimates that the growth rate is likely to decline to 5%.
Nifty 50 Index Prediction
Nifty 50 Index pivots at 23,050 points and the upside will prevail if action stays above that level. Immediate resistance is likely to be at 23,234 points. However, a stronger momentum will break above that level and potentially test 23,390.
Conversely, moving below 23,050 points will signal a shift to the downside. If that happens, the index will likely find the first support at 22,925 points. Meanwhile, breaking below that level will invalidate the upside nthesis and potentially test the second support at 22,773 points.
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