Downside Ahead! Nifty May Re-Test October Lows by March, Says IndiaCharts’ Rohit Srivastava

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The Indian equity markets may face turbulent times in the coming months as the Nifty is predicted to re-test its October lows by March 2024, according to Rohit Srivastava, founder and market strategist at IndiaCharts. The seasoned analyst warns investors of potential downside risks, citing both domestic and global factors impacting market sentiment.

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Weak Technical Indicators

Srivastava highlights that technical indicators for the Nifty have turned bearish, with the index struggling to sustain momentum. “The charts are showing a significant resistance level, and with weak follow-through on recent rallies, a re-test of October lows around the 18,700-18,800 mark appears likely,” he noted in a recent commentary.

Global Factors Weighing on Sentiment

Global macroeconomic concerns, such as rising bond yields in the United States, fears of a slowdown in China, and geopolitical uncertainties, are adding to the pressure on Indian equities. Srivastava emphasized the ripple effect of these challenges on emerging markets like India, which are highly sensitive to foreign capital flows.

Domestic Headwinds

On the domestic front, persistent inflation and the Reserve Bank of India's hawkish stance on interest rates may further dampen market sentiment. “The Indian market faces its own set of challenges, including stretched valuations and subdued corporate earnings growth. These factors could exacerbate the downside risk,” Srivastava added.

Strategic Advice for Investors

While the forecast might unsettle retail investors, Srivastava advises staying cautious and focusing on defensive sectors such as FMCG and healthcare. “This is a time to preserve capital rather than chase high returns. Investors should also consider gradually accumulating quality stocks at lower levels,” he suggested.

Outlook Beyond March

The strategist, however, remains optimistic about a recovery post-March, driven by improved macroeconomic conditions and potential policy measures ahead of the general elections in 2024. “Once the current headwinds ease, the market is likely to stage a strong rebound, offering attractive opportunities for long-term investors,” he concluded.

As the Nifty braces for volatility, all eyes will be on key economic data and corporate results to provide clues about the direction of the market. Investors are urged to tread carefully in the months ahead.

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