Sensex, Nifty give up gains after scaling to record highs; analysts stick to bullish tone

Benchmark indices the Sensex and the Nifty slipped into red, erasing all gains after it hit new highs of 74,501 and 22,619 on April 4 morning. The trend reversal came after investors booked profits across select counters. However, Bank Nifty and Nifty Midcap 100 continued to trade in green after it scaled new peaks of 48,254 and 50,101.

Having said that, analysts believe that stage is set for Nifty to hit 23,000 in the coming weeks, as most of the corrective period is over, analysts said.

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Vaishali Parekh, the senior vice president of technical tesearch at Prabhudas Lilladher, expects the Nifty to race up to 23,400 in the coming days once it goes past 22,800. "The support for the day is seen at 22,300 for Nifty, while resistance is set around 22,600," she added.

Sameet Chavan, Head Research, Technical and Derivative -Angel One, foresees sectoral rotation keeping the traders busy in the coming sessions. He advised investors to maintain exclusivity in stock selection.

Broader markets swam in the positive territory within the first hour of trade as Nifty Midcap 100 and Nifty Smallcap 100 indices surged up to 0.5 percent. Fear gauge India VIX, ticked up by a percent to trade around 11.54.

Sectorally, Bank Nifty hit fresh record high of 48,254 led by gains in HDFC Bank, Kotak Mahindra Bank, and Axis Bank. HDFC Bank was the top Nifty gainer as well after it reported 55.4 percent year-on-year (YoY) growth in gross advances to Rs 25.08 lakh crore in fourth quarter of FY24 (Q4FY24).

Nifty Metal index also joined the bullish trend and gained 0.6 percent on April 4 led by Vedanta and Hindustan Zinc. Both these stocks gained on healthy production. While Hindustan Zinc reported highest-ever quarterly refined metal production of 273 kilo tonne (KT), Vedanta's alumina refining capacity rose to 3.5 million metric tonnes (MTPA) annually.

On the flipside, profit-booking weighed Nifty Pharma and Nifty Media indices down.

Global markets mixed on US Fed's hawkish tone

Globally, the US markets were mixed overnight as NASDAQ Composite and the S&P 500 indices gained up to 0.2 percent, while the Dow Jones slipped 0.1 percent.

Investors feared that the US Federal Reserve may keep rates higher for longer after Jerome Powell said that it would need more information before easing monetary policy. As a result, Fed fund futures data suggests 62.3 percent of a potential rate cut in June, down from 70 percent a week ago.

However, Asia-Pacific markets were on a strong foot, with Australia's S&P 200 index inching up to 0.5 percent, followed by a percent gain in Japan's Nikkei 225 index and South Korea's Kospi index.

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