Sensex, Nifty Extend Gains as Wall Street Rally Lifts Sentiment; 24,200 Is the Level to Watch

Indian equity benchmarks closed higher on November 4, extending their recent recovery, as a strong rally on Wall Street overnight improved risk appetite across global markets. All three major domestic indices ended the session in the green. The Sensex gained 0.50 per cent to close at 77,301.40, the Nifty 50 advanced 0.63 per cent, or 149.75 points, to settle at 23,960.60, and the Bank Nifty rose 0.67 per cent to 55,913.60.

According to a market note by Himanshu Gupta, Head of Research at Jainam, the Nifty has staged a strong recovery from its October lows. On the daily chart, the index has moved decisively above its short-term moving averages, with the 9-day exponential moving average (EMA) placed near 23,081 and the medium-term moving average around 23,226. This, the note said, points to a significant improvement in the short-term trend.

Momentum indicators are also reflecting firm buying interest. The Relative Strength Index (RSI) is around 68.55, indicating strong bullish momentum and approaching overbought territory. The RSI has moved well above its signal average of about 51.47, which the note reads as a sign of strengthening demand for equities.

Even so, the Nifty is now approaching an important resistance zone between 24,000 and 24,200. The immediate hurdle is at 24,200, a level that also coincides with the highest concentration of outstanding call options, or Call Max Open Interest. A sustained breakout above 24,200 could extend the recovery towards 24,400–24,650, where the next major supply zone lies, according to the note.

Global cues were supportive. Wall Street closed sharply higher on Wednesday as the outcome of the US midterm elections eased political uncertainty and boosted risk appetite. The S&P 500 gained 119.7 points, or 1.6 per cent, to end at 7,688.62, while the Nasdaq Composite added 364.50 points, or 1.4 per cent, to 25,736.51. The Dow Jones Industrial Average rose 1,569.40 points, or 3 per cent, to 53,356.12.

Not all sectors participated in the US rally. Shares of data centre companies fell on concerns that a changed political landscape could bring tighter regulation of artificial intelligence, Reuters-style market reports indicated.

The report's headline referred to easing crude oil prices as a factor behind the positive opening expectation, though the note did not provide specific figures for oil benchmarks. Lower crude prices generally help Indian equities by easing imported inflation and the country's import bill, but investors would need to confirm the trend from official price data before drawing conclusions.

For domestic investors, the immediate focus is likely to remain on whether the Nifty can hold above its short-term averages and clear the 24,200 resistance with convincing volumes. A failure to break through could keep the index range-bound, with the moving averages acting as support in the event of a pullback.

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