Indian stock markets have outperformed most of their global peers from March 23, when the benchmark Nifty corrected to 9,951.90 from a record high of 11,171.55 on January 29. This is borne out by the Nifty currently trading well above its 50, 100 and 200 day simple moving averages. Against this, many global markets are trading well below their key moving averages (see table).
In light of this, will Indian markets continue to outperform or face resistance to further upside?
Hemant Nahata, derivatives analyst at IIFL, believes outperformance from here on may be limited . “After having retraced 50 per cent from the low (9,951.9), we are at an important trendline resistance zone. This zone is between 10,560 and 10,650. Given the choppy trend so far in global equity markets, outperformance from here might be limited,” Nahata said.
Chandan Taparia, derivatives analyst at Motilal Oswal Securities, feels factors like rising crude oil and a weakening rupee could cap gains from the current levels and “markets could couple more firmly to global peers which are facing more volatility due to fears of a global trade war and security concerns in West Asia.”
