Nifty Surpasses 24,000 Mark: Benchmark Index's Near-term Prospects Amid Market Volatility
Indian Equity Indices Sensex and Nifty Rally Sharply on Monday
The benchmark equity indices Sensex and Nifty experienced a significant surge on Monday, with the Nifty closing above the 24,000-level for the first time since May 8. The sharp uptick in the market was primarily driven by a steep decline in crude oil prices and firm global cues amid improving sentiment around the US-Iran negotiations.
The Sensex jumped 1,088.18 points or 1.4 percent to an intraday high of 76,503.53, while the broader Nifty surged 318.8 points or 1.3 percent above the key 24,000-mark at 24,038.10. Both the headline indices settled near their day's high at 76,488.96, up 1,073.61 points or 1.42 percent. The Nifty closed higher at 24,031.70, up 312.40 points or 1.32 percent.
| Index | Previous Close | Monday's Close | Change |
|---|---|---|---|
| Sensex | 75,400.38 | 76,488.96 | 1,088.58 (1.4%) |
| Nifty | 23,719.30 | 24,031.70 | 312.40 (1.32%) |
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Market participants are now watching whether the benchmark index can move towards 25,000 in the near term. Santosh Meena, Head of Research at Swastika Investmart, noted that the Nifty 50 has moved above its 20-day moving average (20-DMA) for the first time since May 8, indicating improving near-term momentum.
The 24,000-24,200 zone is expected to act as an immediate resistance area. The 100-DMA is currently placed around 24,600, and a decisive move above this level could pave the way for a rally towards the 200-DMA near 25,000. There are indications that the index has formed a near-term bottom around the 23,300 level.
Analysts said Monday's rally was largely driven by the sharp fall in crude oil prices. Brent crude, the global oil benchmark, declined 5.58 percent to USD 97.76 per barrel on expectations of a possible agreement linked to the Iran conflict. The decline pushed crude prices below the USD 100-mark for the first time in more than two weeks.
"We are starting the week on a positive note. Crude has dipped USD 5 to below USD 100 on expectations that the US and Iran are close to a deal. The market will wait and watch for clarity and certainty since many similar expectations have been belied since the start of the war," said V K Vijayakumar, Chief Investment Strategist at Geojit Investments.
"If this expected deal holds and crude drifts down, that can turn out to be a turning point for the market," he added. Investor sentiment also remained firm amid reports that the US and Iran were moving closer to a peace agreement.
Investor Takeaway
Investors should be cautious of market volatility and keep an eye on the Nifty's near-term prospects.
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