Nifty Forecast: Experts Anticipate Dip, Year-End Near Current Levels

Summary:Experts predict a downturn in the Nifty, with expectations of it remaining near current levels by year-end. Factors such as market volatility, economic uncertainties, and geopolitical tensions contribute to this forecast. Investors are advised to brace for potential fluctuations while monitoring market developments closely.

Market experts largely attribute downside risks to potential policy paralysis and earnings disappointments.

In the broader market, BSE Midcap closed over 1 percent while BSE Smallcap gained over 2 percent.

Boston Brand Media brings you the latest volatility in the market, a Moneycontrol survey of market experts indicates a potential further downside for the Nifty from its current levels. However, the majority of experts believe that any decline will be temporary, with the market expected to close higher by the end of the calendar year. Currently, the Nifty is trading close to 23,000.

The survey, which encompassed 24 experts across various market sectors including brokerages, mutual funds, PMS, AIF, and traders, revealed that 67 percent of respondents foresee the Nifty experiencing additional downward movement before reaching its low for the year. Interestingly, a similar percentage of experts (66 percent) predict the Nifty to close above the 23,000 mark. As of 1:49 pm, the Nifty was trading at 23,232.

Half of the respondents projected that the Nifty would conclude the current calendar year within the range of 23,000 to 25,000, suggesting a potential return of up to 9 percent at the upper end. Sixteen percent anticipated an annual closing above 25,000. On the other hand, seventeen percent of respondents foresaw a range between 21,000 and 23,000, indicating a potential downside of 9 percent, while 12 percent predicted a close below 21,000.

Thus far this year, the Nifty has recorded a gain of 5.68 percent. The Nifty reached a low of 21,239, representing an 8 percent decline from its current level.

Market experts highlight the potential risks to the market in the coming months, with policy paralysis and an earnings slowdown cited as the most significant concerns. However, they suggest that the market could experience a rally if factors such as political stability, policy continuity, and earnings growth become evident in the near future.

The modest expectations are unsurprising, considering that 46 percent of respondents deemed current valuations as expensive, while the remaining 54 percent regarded them as reasonable. None of the respondents considered the market to be cheap.

Another noteworthy revelation from the survey pertained to the PSU segment, which has been a favored area in the market in recent years. This segment witnessed significant gains leading up to the elections but experienced steep declines on June 4. A notable 83 percent of respondents indicated that they do not intend to increase their exposure to the PSU segment from their current levels.

In terms of sectors, FMCG, pharma, private banks, auto, capital goods, and IT remained favored by a majority of the respondents.

Moreover, 65 percent of respondents expressed the belief that midcaps and small caps will not surpass large caps in performance for the remainder of the current calendar year.

The market's sentiment regarding whether foreign investors will emerge as new buyers this year was somewhat split. Fifty-two percent of respondents believed that Foreign Portfolio Investors (FPIs) will conclude CY24 as net buyers, while the remaining respondents expressed a different view.

Indeed, it appears that the dust from the elections is far from settled. With the market bracing for a potentially tumultuous journey ahead, investors should prepare for a wild ride. This year is shaping up to be anything but dull.

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Source: MoneyControl