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The Nifty 50 index is hovering near its all-time high as Indian stocks, including Adani Enterprises, stage a comeback. The index, which is made up of the top Indian blue-chip companies, was trading at ₹18,560, a few points below its all-time high of ₹18,888. Similarly, the Sensex index was trading at ₹62,637, slightly below its record high.
Adani Enterprises stock rebounds
The Nifty 50 and Sensex indices are doing well, helped by Adaani Enterprises. After slumping to a low of ₹1,015 in February, the Adani Enterprises share price has jumped by more than 148%. Other components of Adani’s conglomerate like Ports, Total Gas, and Transmission have all bounced back.
These shares have done well recently because investigations into the company by Indian regulators yielded no material information. In May, the financial regulator in the country drew a blank in its foreign links probe. The strong performance of Adani is in line with the prediction I wrote in this article.
There are other companies that have helped push the Sensex and the Nifty index higher this year. Tata Motors, the parent company of Jaguar Landrover, has jumped by 38% this year. Other automakers like Bajaj Auto, Maruti Suzuki, Mahindra & Mahindra, and Eicher have all risen by over 10% this year.
For the Sensex index, the best performers this year are ITC, UltraTech Cement, Tech Mahindra, Nestle India, and Maruti Suzuki. All these shares have jumped by double digits this year.
There are two main reasons why Indian stocks are soaring this year. First, the companies are reacting to the strong Indian economy. The most recent data shows that the economy expanded by 6.1% in Q1 and analysts believe that it will expand by about 6.5% this year. This growth will make it the best-performing major economy.
Second, the Nifty 50 and Sensex indices are soaring in sync with other global indices like the Nasdaq 100, Dow Jones, and S&P 500.
Nifty 50 index forecast
The Nifty 50 index has been in a strong bullish trend in the past few months. Now, it is approaching the important resistance point at ₹18,888, its record high. The index has jumped above the 25-day and 50-day exponential moving averages.
Most importantly, the index seems to be forming a cup and handle pattern, which is usually a sign of a bullish continuation. Therefore, more gains will be confirmed if the price manages to move above the upper side of the cup at ₹18,888.
Sensex index forecast
Historically, the Nifty 50 index has had a close correlation with the Sensex. As shown above, the index has also formed what looks like a cup and handle pattern. Similarly, it remains above the 25-day and 50-day moving averages while the Relative Strength Index (RSI) is nearing the overbought level of 70.
Therefore, more gains will be confirmed if the price clears the key hurdle at ₹63,601. Moving above that level will see it invalidate the double-top pattern that has also formed.
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