Market Outlook: After two back-to-back months of losses, the equity benchmark index Nifty 50 has risen over 2 per cent in December so far, reflecting renewed market momentum. Year-to-date (YTD), the index has posted an impressive gain of 13.5 per cent.

From its recent low of 23,263.15, Nifty has already recovered 6 per cent, though it remains over 6 per cent below its record high of 26,277.35, achieved in September.

Currently, Nifty is in a consolidation phase, exhibiting a mild upward bias in the near term. A key positive for the market is the return of foreign institutional investors (FIIs), which has bolstered large-cap stocks, particularly in the banking and IT sectors. The renewed FII buying has also lifted sentiment among retail investors, who turned cautious following the near 10 per cent correction from the September peak. 

With FIIs back as net buyers and large-caps gaining strength, the market’s overall outlook appears optimistic, even as the consolidation phase persists.

Will Nifty cross 25,000 by 2024-end?

As 2024 comes to a close, market observers are closely watching whether Nifty can surpass the 25,000 mark and continue its upward trajectory. The index has demonstrated impressive resilience in recent weeks, staying around the 24,600 level and recovering much of the earlier losses. With December likely to be a positive month, experts are not ruling out the possibility of the index reclaiming the coveted 25,000 mark.

According to Ajit Mishra, SVP of Research at Religare Broking, Nifty 50 has reclaimed all key moving averages and established a support base near 24,300. “A decisive move above the 24,800 level could further accelerate recovery, potentially targeting the 25,100–25,300 zone,” Mishra said.

Osho Krishan, Senior Analyst of Technical and Derivatives at Angel One, echoed similar sentiments. He noted that Nifty now hovers around the 50 per cent Fibonacci retracement of its previous decline, positioned near 24,770.

Krishan emphasised that historical trends favour a positive closure for Nifty in December, with a 60 per cent likelihood of ending the month in the green over the past decade. He projected a near-term range of 24,400–24,800, with a modest probability of crossing the 25,000 mark by year-end.

Nifty 50 Trading Strategy

According to experts, investors should adopt a ‘buy on dips’ strategy while avoiding any aggressive positioning in the current market environment.

Mishra advised a buy-on-dips strategy with a focus on selective stock picking. “Sustained outperformance in IT and banking stocks, coupled with selective contributions from other sectors, will be crucial to maintain the current upward momentum. Investors are encouraged to consider fundamentally strong midcap and smallcap stocks but should remain cautious given their susceptibility to sharp corrections,” Mishra said.

Similarly, Krishan advised against aggressive positioning and suggested a wait-and-watch approach, focusing on buying during dips to capitalise on any breakout.

“Recent developments have clearly improved market sentiment, with key indices exhibiting a strong resurgence and gaining significant traction. However, in light of current movements, it is advisable not to become overly aggressive. Instead, adopting a strategy of waiting for dips may be more prudent at this time,” he advised.

In summary, the resurgence in Nifty reflects improving market fundamentals and better-than-expected economic indicators. However, geopolitical concerns and the possibility of profit booking as the year-end approaches remain potential headwinds.

While Nifty’s journey to reclaim the 25,000 mark is not without challenges, the index has a reasonable chance of breaching this milestone, especially if key resistance levels are decisively overcome. For investors, a balanced strategy of buying on dips and focusing on fundamentally strong stocks is recommended.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.