The Indian equity market is showing signs of recovery after experiencing volatility since March due to the US-Iran conflict. According to market experts, the worst of the current market conditions may be behind, with the market likely to enter a recovery phase. As reported by Livemint, investors are accumulating quality stocks on dips as the Nifty 50 tests key support levels, indicating potential stabilization ahead. Latest data shows the Nifty 50 closed at 24,176.15, gaining 0.74% for the week, with the index repeatedly drawing strength from a key ascending trendline and bouncing off that support in recent weeks.
Market experts are recommending Nifty 50 index funds as a strategic investment approach for long-term investors. These funds offer exposure to India's top 50 companies with strong market presence, financial strength, and lower volatility during market consolidation phases. According to D D Sharma, managing director of MF King, these funds mirror the performance of the Nifty 50 index and are suitable for investors seeking passive equity exposure to India's leading companies.
The Nippon India Index Fund – Nifty 50 Plan (direct) stands out as one of the best-performing funds in the category with a lowest expense ratio of 0.07%, significantly below the category range of 0.12% to 0.22%. Other notable funds include the Axis Nifty 50 Fund with 0.10% expense ratio and the DSP Nifty 50 Index Fund with 0.18% cost ratio. The Nippon India fund has delivered a 5-year rolling CAGR of around 18.38%, among the highest in the category.
Technical indicators suggest a mixed but potentially improving market outlook. The RMI has flashed a bullish crossover, offering some encouragement, though a correction appears to be unfolding even as the broader trend remains intact. The percentage of Nifty 50 stocks carrying an RMI Buy signal has retreated sharply from the extreme overbought zone of 80-90 and is moving toward the oversold threshold near 20. A complementary breadth indicator tracking the percentage of Nifty 50 stocks trading above their 200-day moving average had dipped into oversold territory but has begun moving higher, reflecting a growing number of stocks reclaiming that key long-term average.
The broader market significantly outpaced benchmark indices, with Nifty Midcap 100 surging 3.5% and touching a fresh all-time high of 62,113.85, while Nifty Smallcap index rose 4% marking its fifth consecutive week of gains. In the leading quadrant, Nifty Media, Nifty Energy, Nifty Metals, and Nifty MNC are outperforming, though their momentum has slightly decreased. Notably, Nifty Infra has seen consistent momentum decline for five weeks, making it a sector to watch for potential further weakness. The FII net index futures position stands at -210,112, approaching extreme oversold levels, with historical precedent suggesting recovery patterns when this indicator reaches such lows.
