India Stock Market Outlook For 2018

The stock market in India is in great shape for almost 2 years now. The Nifty 50 index representing the largest 50 companies on the India stock market exchange rose from 7000 points to above 10000 points in that time period. So does that result in a bullish or bearish outlook for the India stock market in 2018?

The short answer to this question? Our India stock market outlook for 2018 and beyond remains hugely bullish!

As a reminder, this is what we wrote more than a year ago in our India Stock Market Outlook 2017 when the Nifty 50 was trading at 8192 points:

Our outlook for the stock market in India in 2017 is that it will start the year in a bearish way. We expect a quick turnaround into a bull market. The line in the sand is 7500 points, and we expect this level to hold.

If the index goes higher from here, it would be extremely bullish as we would have a higher low, more than 5 pct above secular support (purple rising line on the chart). In other words, the rising trend would be validated, and it would, without any doubt, lead to a new attempt to break through all-time highs.

If the rising trend line will not break (read: the 7700 level is broken to the downside), we expect 2017 to be a very profitable year for global investors that are long the Indian stock market.

We remain bullish on India, though we sense that China could outperform India in 2018. Long term, however, India is a great place, and its stock market will outperform most of its peer stock markets.

India stock market outlook 2018: news vs fundamentals

As always, financial media steps in to make investors doubt. Believe it or not, most investors get trapped by information overload. They read and keep on reading until they get rely solely on information and news.

Case in point: the Indian stock market saw a flash crash today as reported here. This financial news site wrote that it hit “investor sentiment who dumped their shares in the market sending it into a tailspin. The NSE Nifty plunged 258 points within one hour.”