Equity benchmarks Sensex and Nifty erased initial losses to hit all-time highs above 74,150 and 22,450, respectively, on March 6 afternoon trade, supported by private banking stocks. With the bullish undertone intact, analysts say that Nifty can march to 22,700 over the next few sessions.
Sensex and Nifty settled 0.5 percent higher to 74,098 and 22,482, respectively on March 6.
India VIX, which measures volatility over the next few days, cooled off by 0.4 percent to trade below 15.
"We maintain our positive bias and expect Nifty to head towards 22,700 in coming week wherein large caps would relatively outperform the broader market as ratio of Nifty vs Nifty 500 has bottomed out," said analysts at ICICI Securities.
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Structurally, the index may take a breather after witnessing faster retracement. "We advise to utilise dips as an incremental buying opportunity since immediate support is placed at 22,000," analysts added.
Broader markets, however, took the beating on March 6 as Nifty Midcap 100 and Nifty Smallcap 100 indices slipped up to 2 percent. This trend is likely to continue since small cap valuations continue to be excessive, pointed out VK Vijayakumar, Chief Investment Strategist of Geojit Financial Services.
Sectorally, Bank Nifty index was the top sectoral performer on March 6 as it surpassed 48,000-mark led by gains in Kotak Mahindra Bank, Axis Bank, Bank of Baroda, Federal Bank, and ICICI Bank.
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"A successful breach of 48,000 level is anticipated to propel the index towards its all-time high. The overall outlook remains bullish, and any declines toward the mentioned support level are considered buying opportunities," said Mandar Bhojane, Research Analyst at Choice Broking.
The buzz in banking stocks came after liquidity in the banking system moved into surplus almost after three months as the Reserve Bank of India (RBI) absorbed over Rs 40,000 crore from the market on March 5.
On the flipside, Nifty Media was the top sectoral loser as it declined over 2 percent weighed by Sun TV, Dish TV, and DB Corporation.
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