Index facing resistance at new high

The markets closed higher on Friday following the global trends with the Sensex ending 127 points higher at 38,672 and the Nifty ended at 11,623 up 53 points.

Sectors like IT, auto, metal and energy stocks were in the limelight and Vedanta, Tata Steel, M&M and Tata Motors were the major gainers. The breadth of the market was also strong, with the BSE Mid-Cap Index rising 1 per cent.

During the week the Nifty advanced 1.5 per cent, while it made 7.7 per cent gains in March, the highest monthly gain since April 2016.

Foreign institutions continued to be bullish on India pumping in record Rs 32,457 crore in the cash segment in this month.

Though the market continued the upward movement supported by global cues, which rallied in expectation of US- China trade deal experts said the market is facing resistance while nearing the all-time high. The investors are looking ahead to get cues from general election during which earning growth in Q4 will be inevitable to support the rally.

The market is expected to form a new higher top above 11,650 levels, in the next few sessions, analysts said.

Technical View
"A long bull candle was formed on Friday at a new swing high of 11,588 levels. This pattern is indicating a strength of an up move and lack of profit booking at the highs. Currently, the Nifty is making an attempt to move above the recent swing high of 11,572 levels. The market is expected to form a new higher top above 11,650 levels, in the next few sessions," Nagaraj Shetti - Senior Technical & Derivative Analyst, HDFC Securities said.

The market settled with decent gains in a range bound session, in continuation to prevailing uptrend. Firm global cues led strong start but profit taking at higher level capped upside. Among the sectoral indices, banking and financial took a pause on Friday while metal, auto and pharma majors attracted noticeable buying interest.

Market View
"The Nifty is all set to make a new record high however we may see some marginal profit taking in between. Since we're seeing broader participation, traders should maintain their focus on stock selection but it's easier said than done after the recent up move," said Jayant Manglik, President, Religare Broking Ltd.

Analysts are expecting another rate cut by the Reserve Bank of India early next month. "We now think 25 basis points cut is likely in the April meeting. Our thinking is driven by three factors- continued weakness in economic activity, still benign inflation and soft global growth, and a dovish Fed," Goldman Sachs said in a report.

The Nifty internals suggest that recent rally has been broad-based compared to previous ones as 29 stocks from the Index have outperformed the Nifty so far - A perfect ingredient for a sustained rally. "We expect the Nifty to continue its northbound journey and attempt 12,100 levels," Pritesh Mehta, Senior Vice President for Research at Yes Securities.