Will Nifty Mirror The Stock Market Crisis In 1999 And Peak Soon?

28 Nov

Posted by Shyam as Market News

The Nifty index on the NSE is showing trends this year similar to that of 1999. If this position continues, there is a possibility that in the coming few months the index could reach its peak to set an all-time high. Analysts are comparing the present market trends and the economic conditions with last year’s position.

Nifty’s movement has been analyzed for 1999 and 2009 and reports indicate that during the period April to November, there were two major upward trends and two small decreasing trends. The upward phase followed the terrible fiscal crisis in both the years 1999 and 2009. The Nifty showed a first upward rally during April,1 and May,19 in the year 1999 when it was up by about 11%.

In the later stage during May 19 and May 28, the Nifty saw a fall of about 8%. This decline was followed by an increase of 39% during May 28 and October 14, which can be deemed as the second upward rally. This position did not remain for long and the Nifty again fell by 17% during October 14 and November 1.

In 2009, Nifty showed four stages of rise and fall. During the period of April 1 to May 20, Nifty gained by 40%. It however saw a fall during May 20 and July 13 when the second phase recorded a decline by 7%. The third stage that occurred between July 13 and October 17 pulled up the index by 29%. The Nifty again dipped by 11% during October 17 to November 3, the fourth stage.

In 1999, after the fourth stage, Nifty experienced a gain by 38% in the two months following the fourth stage. If it is assumed that this is beyond coincidence and the rationality of investors is involved in the similar conditions of the years 1999 and 2009, then we can expect that alike 1999, in the coming few months the Nifty would regain.