Will Nifty drop below election low of 19,500 levels? Check what analysts have to say

Nifty-50 Index has declined 16 percent from its peak of 26,277 in September last year. The total market cap of NSE listed stocks has fallen from 477.93 Lakh crores to 382.71 lakh crores, reducing the investors’ wealth by 95.22 lakh crores. 

Elara Capital believes that Nifty could fall another 2,500 points from the Current level of 22,000. Going well below the June 2024 election result low of 21,280, when Nifty dropped as much as 9 %.

Elara Capital has been positive on India since it hit the COVID-19 bottom in March 2020. However, now they believe that evidence had started to pile up in December end and January start, that the start of a long-term (18-24 months) bear market had already begun in September 2024, and we are already 5 months in.

They believe that the bull market in the USA will remain intact and we will see a turnaround of the recent US market fall. However, they anticipate India would still underperform the global equity market. Despite this, the Indian IT sector could benefit from the strength in U.S. equities, potentially serving as a safe haven for the next 16–18 months. They see a strong long-term structural opportunity in the sector, making it a key area of resilience amid broader market challenges.

If the election low of 21,280 gets breached, it could be a sign of the first phase of a bear market, potentially leading to a massive selling climax, Historically, such selling is triggered whenever an Important Low is broken in the markets.

Also read: Financially strong Ashish Kacholia stock with order book of over ₹475 Cr to keep an eye on

Other Brokerages hold a Contrarian Bullish View on Nifty

Most of the Brokers have given a positive Target on Nifty for 2025. The highest target among Brokers is ICICI Direct, who has given a target of 28,800 reflecting a potential upside of 30 percent from current levels. Foreign Brokerages like Jefferies, Goldman Sachs, and CitiBank have mostly given a target in the range of 25,000 to 27,000, reflecting an upside potential ranging from 13 percent to 22 percent for the year-end.

Reasons for Market Decline

The Indian stock markets have been under pressure due to continuous selling by Foreign Institutional Investors (FIIs). One of the key reasons is the strengthening of the US dollar, which makes emerging markets less attractive. Additionally, concerns over a slowdown in corporate earnings growth, global economic uncertainties, high valuations of Indian stocks compared to other emerging markets, and trump tariff risks have further contributed to the market decline.

Written By Abhishek Das

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