Indian market rallied more than 1 percent on November 24 tracking positive global cues. The Nifty50 surpassed the crucial resistance level of 13,000 for the first time to hit a fresh life high.
Let’s look at the final tally on D-Street – the S&P BSE Sensex rose 445 points to 44,523 while the Nifty50 rose 128 points to close at 13,055 on November 24.
Sectorally, the action was seen in banks, realty, auto, realty, finance, and healthcare stocks while some profit-taking was seen in the telecom index.
Experts are of the view that global liquidity is something that is powering the rally in Indian markets supported by positive economic data as well as news on the vaccine front. The risk-to-reward is still favourable for investors who want to invest for the long term.
“Indian economy is recovering well. Credit growth also has started picking up. Electricity consumption, PMI, GST collections, and Eway bill data has been quite encouraging. With the road map for vaccination clearing, the economy will be back to full steam in 2021,” B Gopkumar, MD & CEO, Axis Securities told Moneycontrol.
“The prospects ahead look quite encouraging as demand across sectors has started to look promising. The reset has had challenges, but it has also brought forth good opportunities, and corporates across the country are gearing to cash on them,” he said.
Gopkumar further added that even though markets are at an all-time high, but the risk to rewards still appear promising for the patient long term investors.
Here is what experts think investors should do on November 25:
Ashis Biswas, Head, Technical Research, CapitalVia Global Research Limited
We witnessed some decisive trends in the market with Nifty making an attempt to overcome the resistance level of 13,040.
While sustaining above 13,040 is the key factor from a short-term perspective, our research suggests staying above this level, market to gain momentum and to open the gate for a movement till 13170-13190.
We have observed the momentum indicators like RSI, MACD to recover after staying neutral to bearish in recent time.
Rahul Sharma, Market Strategist & Research Head, Equity99 Advisors
We continued to witness short-covering on November 24 in Nifty-50 stocks ahead of the monthly expiry on November 26. Also, we continued to witness fund-based buying in frontline index-heavy stocks, especially banking stocks as the as progress on a COVID-19 vaccine spurs hopes for a faster economic recovery.
Nifty has now moved above the psychological barrier of 13,000 and this should propel the Nifty higher to 13,210 and above that 13,200. With November expiry around in the next two days, the index could accelerate buy 150-200 points by Thursday.
We believe any spurt in the US markets could be a big catalyst in any further rally in Nifty-50 in the coming days. The liquidity flow is expected to continue for the foreseeable future and we do not see any reason for a big correction in the market in the immediate future.
Binod Modi, Head Strategy at Reliance Securities.
Favourable global cues followed by news of ex-fed chairwoman Janet Yellen’s nomination as Treasury Secretary and smooth transition to new Government in the USA bolstered confidence among investors.
Improved prospects of earnings recovery and weak dollar index resulted in robust FPIs flow in the month so far, which led markets higher.
However, valuations at these level look to be quite stretched and it calls for a caution as any let-up in terms of earnings growth outlook may result in meaningful erosion of value.
Shrikant Chouhan, Executive Vice President (Equity Technical Research), Kotak Securities
Finally, the Nifty has broken the psychological mark of 13000 under the leadership of Financials and Automobiles that shows the confidence of market participants.
On Tuesday, each and every sector closed in positive territory. The Nifty has formed a bullish candle above the crucial level of 13000 that would lift the market to 13180/13200 levels as per option statistics.
On the downside, 13000 and 12930 would be supports. The dollar Index is consistently falling and currently it is nearer to the crucial support of 91.99.
In case, the dollar breaks the level of 91.99 then it would generate more buying flows for the emerging market.Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.