Mumbai, Pro-cyclicals stocks along with faster recovery and the recently announced stimulus are expected to further drive-up the recent market rally.

In financial parlance, pro-cyclical stocks from sectors such as banking, consumer durables, cement, real estate and metals.

However, market observers cautioned about an impending correction due to expensive propositions.

"Nifty has closed at all time high and has shown a lot of strength and resilience in the latest upmove," said Deepak Jasani- Head of Retail Research at HDFC Securities.

"Going by the momentum we can expect some more upmove although the short term technical indicators have turned extremely overbought and hence could suggest a correction soon."

Nonetheless, fund inflows, rising economic activity and progress towards a Covid-19 preventive vaccine are expected to arrest any major downfall.

As per estimates, till now the domestic equity market has attracted over Rs 20,000 crore worth of foreign funds.

"Government has announced fiscal stimulus package 2.0 which is another incremental step toward the betterment of the rural sector and could boost consumption. This along with abundant liquidity should provide support to the market," said Siddhartha Khemka, Head - Retal Research, MOFSL.

"However, given fair valuations for Nifty, we would suggest investors to adopt buy on dips strategy and traders to keep booking profit intermittently."

According to Vinod Nair, Head of Research at Geojit Financial Services: "Market is currently in a stable state and is looking forward to next week's WPI data release."

"As inflation is still at higher levels according to latest CPI data, we believe further rate cuts are not possible from the regulator"

The wholesale inflation data is expected to be released on Monday.

Already, the country's retail inflation has risen to 7.61 per cent in October from 7.27 per cent in September.

This has mitigated chances of any further rate cuts in the calendar year 2020.

The equity markets will now reconvene on Monday in the Hindu new year of Samvat 2077.

In Samvat 2076, the Sensex rose over 11 per cent, while Nifty50 gained around 10 per cent.

A special "Muhurat" trading session was held on Saturday to mark the start of the new year.

Both the indices ushered in Samvat 2077 during the session with gains as signs of faster economic recovery along with healthy festive season demand and stimulus measures buoyed investors' sentiments.

Accordingly, the S&P BSE Sensex crossed the psychological 43,830.93-mark for the first time in the intra-sessional trade. The Nifty50 on the National Stock Exchange crossed the 12,828.70-mark.

"As a domestically oriented economy, we expect the coming year to be favourable for pro-cyclical sectors like banking, consumer durables and for companies tied to a robust pick-up in construction activity," said S. Hariharan, Head - Sales Trading, Emkay Global Financial Services.