After The Bell: Will the momentum last? Here’s what investors should do on Tuesday

Tracking positive global cues, Indian markets hit fresh record highs in the run-up to Diwali on November 9 after Joe Biden over the weekend won the US election that led to a weakening of the dollar.

A weak dollar would lead to more fund inflows into emerging markets like India. On the domestic front, robust economic data as well as stable earnings from India Inc. helped the sentiment.

The S&P BSE Sensex touched a fresh record high of 42,645.33 while the Nifty50 hit an intraday record high of 12,474.05. The last time when both Sensex and Nifty50 touched record highs was back on January 20.

Let’s look at the final tally on D-Street – the S&P BSE Sensex rose 704 points to close at 42,597 while the Nifty50 rallied 197 points to 12,461.

Sectorally, the action was seen in telecom, banks, power, metal, finance, and consumer durable stocks while mild profit-taking was seen in the healthcare space.

"Firm global cues and a clear majority to favorite Democrats party in the US election took main benchmark indices to an all-time high. The rally in the domestic market was also led by Banking and Finance stocks on improved business outlook post Q2 results, end to the moratorium and bounce back of economic activities,” Vinod Nair, Head of Research at Geojit Financial Services told Moneycontrol.

“Broader market has shown underperformance compared to headline peers as investors feel safer chasing heavyweights during high market levels,” he said.

Nair further added that he expects more stimulus measures are required to boost the economy and announcements regarding the same from the government is expected in the near future that can further accelerate our domestic market".

Here is what experts think that investors should do on November 10:

Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services Limited

The Nifty50 index opened gap-up and continued its northward journey by surpassing its previous lifetime high of 12430 and during the day it hit a fresh record high of 12474 marks.

The index has given a highest-ever close with handsome daily gains of around 200 points. Advance-Decline ratio supports the market momentum along with a broad-based rally in most of the sectors.

It formed a bullish candle on a daily scale along with Run Away Gaps and continues making higher high - higher lows from the last five trading sessions.

The index has to continue to hold above 12300 zones to witness an up move towards 12600 and 12750 zones while on the downside major support exists at 12222 and 12131 zones.

Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities

The Nifty 50 index closed comfortably above the all-time high of 12430. The best part of today's move was all the indices closed in positive territory. Not a single sector closed in the negative territory.

Technically the market isn't showing any negative reversal but on the major oscillators -- MACD and RSI it is indicating the market in the short-term to be in an overstretched zone.

The Nifty 50 index is leaving many price gaps while heading higher that is a cause of concern, as any negative sentiment could pull down the market heavily.

Meanwhile, the market would move in a range of 12550 and 12300 levels. The strategy should be to trade in a few stocks. Regarding index one can initiate a buy only on dips around 12300 levels.

Dr. Joseph Thomas, Head of Research - Emkay Wealth Management.

The market continued its upward trajectory across indexes and segments based on positive global developments emanating from the fact that more orderly conditions and aggressive pro-growth strategies may prevail with a change of regime in the US.

The prospects of higher fiscal and monetary expansion is giving the markets greater comfort on liquidity and interest rates. This is the best thing to happen for the markets which have been fuelled by liquidity since the pandemic and the lockdown.

Ajit Mishra, VP - Research, Religare Broking Ltd

Markets have seen a decent run-up and reached to record highs as well, driven by better than expected earnings so far, supportive global cues, and improving macro data.

Further, the on-going corporate earnings, domestic economic data (IIP and CPI), and Bihar election outcome will be in focus. Meanwhile, markets would continue to mirror global indices. We suggest maintaining a “buy on dips” approach and keeping extra caution in the selection of stocks.