Will Sensex and Nifty scale new highs before 2022 ends?

The lower-than-expected US retail inflation data, coupled with the weakening of US dollar, lifted benchmark indices 2% last Friday. The welcome news rekindled hopes that the US Federal Reserve may tone down its ultra-hawkish monetary policy stance. 

The S&P BSE Sensex eventually ended at 61,795, up 1.4 per cent for the week. The NSE Nifty 50 topped the 18,300-level and gained 1.3 per cent. 

However, the BSE Midcap and Smallcap indices settled with losses, down 0.7 per cent and 0.4 per cent, respectively.

“It is probable that the US Fed might pause after one more hike of 50 basis points, which will be an advantage for the bulls in the near-term. New record on the Nifty50 is only a question of when,” says VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services 

Meanwhile, Amit Jain of Ashika Global believes the frontline indices could hit new lifetime highs in November itself. 

Amit Jain, Co-founder, Ashika Global Family Office Services says, Indian markets and economy to benefit from Europe+1 policy.  DIIs roughly sitting with Rs 1 trillion surplus liquidity. Russia-Ukraine war seem to be at conclusive stage. Lower US inflation numbers likely to pause propensity of Fed rate hike. Rupee outperformance to boost FII confidence in Indian market. 

However, 18,300 appears to be the immediate hurdle for the Nifty as per tech charts.

Nandish Shah, Senior Derivative and Technical Analyst, HDFC Securities says he see a gradual rise; time for the other EMs to catch up. Lack of triggers for Indian markets. Nifty faces resistance at 18,300-level; a breach can take it to a new high, he says. 17,900 should be the stop loss for trading longs. 

Focus shall be on India’s October inflation data this week, which will be released on Monday. That apart, Q2 earnings shall draw to a close. 

In the primary market, Kaynes Technology IPO will close on Monday, while subscription for INOX Green Energy shall end on Tuesday. Fusion Micro Finance, Bikaji Food International and Global Health are expected to debut on the bourses this week.