Last week, Nifty50 touched the magical number of 25,000 points. However, on 2nd August, the market fell sharply, and Nifty closed below 25,000. This leaves investors in a dilemma – Nifty Hits 25,000, so will the market bounce back, or continue to fall, and it is time to lock the profits? Let us answer this question here. Before that, let us understand a few things.
What led to the 25,000 rally?
You will be surprised to know that the last 1000-point rally came in no time. From 24,000 to 25,000, it only took 24 trading sessions for the market. It was the third fastest 1000-point rally on the stock exchange. The second fastest was 23K to 24K, which came in only 23 trading days. Do you know the fastest rally?
This particular rally was driven by a variety of reasons. Some of them are mentioned below:
- Healthy GDP growth: The International Monetary Fund recently raised India’s growth forecast for 2024-25 to 7% from 6.8%.
- Controlled Inflation: The inflation numbers are in control and below RBI’s threshold of 6%.
- Domestic Inflow from retail investors: The SIP inflow from retail investors continues to pour in and make records.
- Good Result Numbers: Most companies have reported better-than-expected results, which has cheered the market and investors.
- Fed Rate Cut: The US Federal Reserve said that the first-rate cut (in four years) can happen in September.
What should investors do?
The stock market is always forward-looking, and the market has factored in all the above points. So, a correction cannot be ruled out from the current levels. However, a large majority of experts believe that in the mid to long-term, the Indian market will continue its upward trajectory, driven by strong earning numbers and global position.
So, whether to book profit or not depends on investors’ investment horizon. If you are unsure which is a better option for you, consult the best stock market advisor in India, and they will guide you to make profits in most market conditions and based on your risk profile and investment horizon.