Nifty breaks out to set sight on 25k; Sensex & Bank Nifty turn poor siblings

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The performance of the Nifty has boosted the confidence of the mutual funds to come out with new fund offerings along with assessments that the index is headed to much higher level by end of the year.

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By S Jha

New Delhi, February 19: Nifty on Monday scaled a new peak to close at 22,122 a record high for the 50-share index. Nifty scaled the last peak of 22097 which was seen on January 15. In the course of one month, Nifty has shown a strong resilience to stay on strong growth trajectory with brokerages coming out with new set of targets for the index.

Sensex and Bank Nifty have lagged behind Nifty. Sensex is still almost 600 points aways from the peak of 73,397, which was also seen on January 15 after which the indices had seen heavy selling. Bank Nifty had seen its peak on December when the index had touched the level of 48500.

Clearly, Nifty has outperformed all the indices. The performance of the Nifty has boosted the confidence of the mutual funds to come out with new fund offerings along with assessments that the index is headed to much higher level by end of the year. ICICI Direct in a mail to its customers has claimed that its experts have assessed Nifty to climb to the level of 25000 by December, 2024 to command a PE multiple of 20.

For the immediate terms, Nifty is seen to have the next resistance at 22198 while the support is seen at 22033. The next resistance for Nifty is at 22275 and thereafter at 22364. Technical levels of Nifty appear to suggest that the index is without a heavy congestion zone after scaling a new peak in the Monday session.

Even in the US, the investors are claiming that a rerating of S&P, which I currently at about 5000 is on the card, with the index likely to head to the level of 5200. However, the market participants in the US are claiming that the fast rise in the indices has created gaps which need to be filled with retracements. Yet, they are also pegging that the big tech-driven rally on the US bourses may be on the cards.

Bank Nifty appears to be without a leadership. HDFC Bank after a sharp correction is without momentum. The index heavyweights ICICI Bank and SBI are in contrast are carrying out the rescue act for the Bank Nifty. While SBI after a massive breakout continues to soar, ICICI bank was in action in the Monday session to go past the level of Rs 1040.

(Disclaimer: This article makes no recommendations for buy or sell of shares of any company)

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