Nifty up over 5% in a week, past trend hints it may gain further
In the past six years, there were six instances of Nifty shooting up more than 5% in a week.
By ET Bureau | Updated:
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In the subsequent three- and six-month periods, average returns were nearly 10 per cent and 14 per cent, respectively.
The rally of over 8 per cent in the Sensex and Nifty in less than a week triggered by the government’s corporate tax rate cut is flashing a bullish signal for the markets for the next six months. In the past six years, there were six instances of the Nifty shooting up more than 5 per cent in a week. In the subsequent three- and six-month periods, average returns were nearly 10 per cent and 14 per cent, respectively.
For instance, in March 2014, when the Nifty gained a little over 5 per cent in a week, the index jumped 16 per cent in the next three months and 25 per cent in the next six months, according to Yes Securities. Analysts said the tax rate cuts are expected to result in a revival of earnings growth, which could lead to a jump in share prices.
