Sensex soared 1,233.25 points to 75,692.78 and Nifty topped 23,440.80 on Monday, November 2. Markets got a boost as crude oil prices fell and Reliance Industries reported good results. Vinod Nair said, "Indian equities opened the week on a firm footing, supported by better than estimated Q2 earnings and improving domestic cues."
The Indian equity benchmarks had a terrific start to the week, with market sentiment improving due to falling crude oil prices, good quarterly results by heavyweights such as Reliance Industries, and early signs of a return of foreign investors.
The Sensex ended 1,233.25 points higher, or 1.66%, at 75,692.78 points on Monday, November 2. The Nifty ended 387.70 points higher, or 1.68%, at 23,440.80 points.
Reliance Industries ended the day with 11.6% gains, followed by Tata Steel with 5.8% and JSW Steel with 5.1% gains. Shriram Finance and Coal India surged nearly 5% each. On the other hand, Infosys closed 2% lower. Several banking stocks such as ICICI Bank, Kotak Mahindra Bank, and Axis Bank also closed 0.7% lower each.
Drivers of the rally
"Indian equities opened the week on a firm footing, supported by better than estimated Q2 earnings and improving domestic cues. Domestic macro indicators provided an additional boost to sentiment with October passenger-vehicle sales growth reflecting healthy festive demand, while gross GST collections increased, reinforcing the resilience of domestic consumption and economic activity," Vinod Nair, Head of Research at Geojit Investments said in a note.
Global cues were also supportive, as crude oil prices eased from six-month highs, with Brent falling below $110 per barrel from around $116 per barrel last week. "Foreign investors turning buyers as a global AI rotation also provided support to domestic equities. The rally extended to the broader market, with mid- and small-cap indices also advancing, indicating an improvement in market participation," Nair added.
Energy, metals, and auto stocks were the key gainers on Monday while IT and pharmaceutical stocks ended mostly flat. The Oil and Gas Index was the outperformer on Monday, surging nearly 6%. The Nifty Metal index also jumped over 3%.
Broader market indices also gained, with the Nifty Midcap 150 closing over 1% higher and the Nifty Smallcap 250 ending 1.4% higher.
Sensex, Nifty: Key levels to watch
"Technically, the market opened with a gap up and maintained positive momentum throughout the day. A bullish candle on the daily charts and an uptrend continuation pattern on the intraday charts indicate further upside from current levels," Shrikant Chouhan, Head Equity Research at Kotak Neo said in a note.
Chouhan said the short-term trend is positive and buying on dips and selling on rallies would be the ideal strategy for day traders.
The key support levels are now 23,300 and 23,200 for Nifty 50 and 75,300 and 75,000 for Sensex. On the upside, the trend could continue towards 23,500-23,650 and 76,000-76,150. "However, below 23200/75000, the uptrend would become vulnerable, and traders may prefer to exit their long positions," he added.
What investors should watch now?
Indian equity markets are likely to remain constructive in the near term as long as crude oil prices are contained. However, a few positive sessions are not enough to confirm a reversal of the recent downtrend, analysts said.
investors will remain watchful of the outcome of the US midterm elections on November 3. Stock specific action is likely to remain in the coming days as several companies release their quarterly results.