Daijiworld Media Network – Mumbai

Mumbai, Aug 18: The Nifty 50 is trading close to a critical support zone of 24,000-24,043, a level defined by the 200-day moving average and the upper boundary of a double-bottom pattern formed between February and April, according to CLSA’s technical analyst Laurence Balanco.

As long as the index sustains above this zone, CLSA believes the market has scope for further gains, with the next target pegged at 26,333 based on the measured move from the earlier pattern.

However, on a relative scale, India’s performance lags behind emerging markets and China. CLSA’s analysis of the India ETF (INDA) against the EM ETF (EEM US) shows that after the post-Covid rerating, the INDA/EEM ratio has shifted into a higher trading range compared to the pre-Covid years (2015-2020). The current range, in place since 2022, reflects swings from the 2023 relative lows to the highs recorded in 2022, 2023 and 2024.

On the India-China front, CLSA notes a sharper trend. The INDA/MCHI ratio has broken down from a double-top pattern built in 2024, pointing to a further downside of 8-13%. This projection coincides with key support levels from the 2022 and 2023 lows, suggesting relative weakness for India against China.

The brokerage cautioned that India’s relative performance will be closely tied to external factors such as China’s recovery momentum and broader emerging market flows.