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Nifty closes above 13,000, Sensex jumps 446 pts; 5 factors that supported the up move

Experts feel if the index decisively holds 13,000 mark in coming days, then 13,100-13,200 is very much likely.

November 24, 2020 / 04:07 PM IST

The market seems to be not in a position to turn cautious for the time being as the benchmark indices hit a fresh record high levels with the Nifty50 closing above 13,000 mark for the first time on November 24.

The BSE Sensex jumped 445.87 points or 1.01 percent to 44,523.02 and the Nifty50 rose 128.70 points or 1 percent to 13,055.20, while the broader markets also participated in the run with the Nifty Midcap index rising 0.7 percent and Smallcap up 1 percent.

"As expected, the Midcap Index has appreciated 13 percent so far this month. This is a global trend since the largecaps are richly valued. In the US Russel 2000 - the smallcap index- touched record highs yesterday. In India there is more room for the broader market to go up," VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services told Moneycontrol.

Here are five key factors that are supporting the market:

Vaccine Development

Close

The consistent positive development on the vaccine front clearly boosted the sentiment across the globe and raised hopes for early vaccine for COVID-19 than later.

After Pfizer and Moderna, British-Swedish drugmaker AstraZeneca and the University of Oxford said their coronavirus vaccine was 70.4 percent effective in preventing COVID-19, as per the interim analysis of its late-stage clinical trials, conducted in the UK and Brazil.

The potential vaccine against the novel coronavirus maybe around 90 percent effective, the company said citing interim analysis of results from late-stage clinical trials.

Last week, Pfizer-BioNTech and Moderna said their experimental vaccines against COVID-19 had shown around 95 percent efficacy.

Global Rally

Globally equity markets climbed higher after the vaccine development, especially when the second wave of COVID-19 hit western countries hard.

Japan's Nikkei was up 2.5 percent, followed by Australia's ASX 200 (up 1.26 percent), South Korea's Kospi (0.6 percent) and Hong Kong's Hang Seng (0.4 percent), though China's Shanghai Composite was down 0.34 percent at close.

US markets also closed higher yesterday, with the Dow Jones rising over a percent. The beginning of transition process by Donald Trump administration also lifted sentiment.

FII Inflow

Foreign institutional investors continued to pour in money into Indian equities with the hope that India is on a strong recovery mode than western world. FIIs invested nearly Rs 51,000 crore only in the month of November, which is the highest every monthly flow into Indian equities.

Though domestic institutional investors turned cautious given the market at all-time high and FII inflow continues, and consistently booking profits. As a result, they had net outflow of Rs 35,587 crore in November.

Sectoral Rally

Banking & Financials, and Auto stocks supported the market to hit a fresh record high today. Nifty Bank index was up 2.5 percent, while Nifty Auto was up 1.7 percent and Financial Services gained 1.5 percent. Metal and Pharma rose 1 percent each.

In fact, the Nifty Bank is around 2,000 points away from its 52-week high.

Technical View

The Nifty50 closed above 13,000 mark and posted a percent gains, forming bullish candle on the daily charts.

Experts feel if the index decisively holds 13,000 mark in coming days, then 13,100-13,200 is very much likely.

"The Nifty remained solid throughout the day keeping well above the 13000 level. 13,100-13,200 can prove to be a resistance zone which could see some profit booking. Since the overall trend of the market continues to remain bullish, traders should focus more on the long side of the market than the short side," Manish Hathiramani, Proprietary Index Trader and Technical Analyst at Deen Dayal Investments told Moneycontrol.
Moneycontrol News
first published: Nov 24, 2020 12:02 pm
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