For Nifty, 21,850 Level Is Within Reach In 2023, Says CLSA's Laurence Balanco

The recent upward trend by the Indian markets is likely to carry into 2023, according to CLSA's technical analyst Laurence Balanco, who sees the 21,850 level for Nifty within reach.

“We've had a pretty decisive consolidation pattern that's formed between 15,400 and 18,500. We're now right at the top of the range, setting up ultimately for what we think is a breakout into the new year and extending to upside targets of around 20,185,” Balanco told BQ Prime’s Niraj Shah.

The CLSA technical analyst said the uptick will be part of the Santa Claus rally set to begin in the global market. "Signs of a recovery rally around the world became apparent in developments during October."

While the Indian market has been resilient during this period, concerns regarding underperformance are very real too, Balanco said.

In case of a correction, Indian markets will not go below the lows seen in June and July this year and return to the 17,000-level, Balanco said.

The lows in October have been driven mostly by heavyweight stocks, and that will remain the case going into 2023 and beyond. The rally so far has been narrow and will remain so in the first two months of the next year, the market expert said.

The dollar is likely to weaken in 2023, presenting commodities and emerging markets with an opportunity to surge, Balanco said. “We actually see further dollar weakness into year-end... What that means for emerging markets and commodities, particularly in the second half of 2023, is that a weaker dollar should be beneficial for commodities.”