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Nifty mirroring rhythm of mega bull trend!
What's Buzzing
The Nifty clocked a fresh all-time high of 18900 post 13 months’ consolidation breakout (18600-15200). Can this momentum continue and turn the tide into replication of a mega bull wave?
Context
Historically, the rare multiyear breakout from the ratio of the country’s equity benchmark vs. MSCI world index has opened the doors for multiyear relative outperformance of the respective country’s equity market against global peers, leading to mega bull phases producing a multi fold rally. In the current context, a similar breakout in the Nifty was observed on May 2022 at 16585.
History of global mega bull trends
Globally, ratio breakout post multiyear relative underperformance against MSCI world indices depicts structural improvement in respective markets. Empirically, such breakouts in Dow Jones, Hang Seng, Nikkei, Dax resulted in a multi-fold rally in respective markets (to the tune of minimum 3x returns) in the subsequent six years
History of mega bull trends in India
- Over the past four decades, there have been three mega bull trends in India during 1981-86,1990-92, 2004-08, with minimum 3x returns post ratio breakout
- In current context, a similar ratio breakout was observed during May 2022 at 16585. Thus, it projected minimum 3x returns from the breakout level of 16585 for the current decade
Our Perspective
The current breakout suggests that the Indian market is in an early stage of a multiyear outperformance with minimum projected target on the Nifty at ~50000 by CY30. Thus, secondary corrections from here on will provide incremental buying opportunity to accumulate quality stocks to ride the secular bull trend.
Disclaimer – I ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is acting as a distributor to solicit bond related products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.
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