The Sensex also rallied, but failed to hit a fresh high, closing instead over a thousand points off the day’s peak.

The Nifty surged 1.97% to a record high of 22126.80, briefly surpassing its previous record of 22124.15 on 16 January, before closing up 0.72% at 21853.80. The Sensex vaulted 2% to 73,089.4, but closed almost 1,000 points off the day’s high at 72085.63, up just three-fifths of a percent.

Friday’s outperformer was the Nifty PSU Bank index, which hit a record high of 6699.35 before closing up 2.22% at 6609.75, thanks to the Centre’s budgeted fiscal deficit figure of 5.1% for the next fiscal year, which came below market expectations of 5.3%.

In technical parlance, Nifty formed an inverted hammer on the daily charts. This means it opened and made a high far above the opening, only to give up a bulk of the gains at close. It is a sign of a trend reversal which will be confirmed on Monday if the Nifty closes below Friday’s low of 21805.55.

“Today’s pattern shows that the bulls could not sustain at the day’s higher levels, with the bears overwhelming them at each one of them,” said Rohit Srivastava, founder, IndiaCharts. “We will have to wait and see how Monday’s close pans out. If the closing is below 21805, the trend will have reversed and we could see selling especially since the Bank Nifty failed to breach the technical resistance of 47029.”

Srivastava added that the chances of lower levels were higher in the short term as the sectoral Bank Nifty index closed almost half a percent lower at 45970.95. If the Nifty closes above the low, it could test a fresh high at 22380, he added .

The Nifty has risen 17.4% from the 26 October low of 18837.85 to its record high of 22126.8 on Friday.

The market action came a day after the interim budget, and the US Federal Open Market Committee leaving policy rates unchanged for a fourth time. While foreign portfolio investors (FPIs) net purchased a provisional ₹ 70.69 crore of shares, domestic institutional investors (DIIs) net bought shares worth ₹ 2463.16 crore. This meant retail investors and HNIs booked profits on both NSE and BSE.

The retail and HNI net sales figure stood at ₹ 1183.01 crore on BSE while that on NSE will be available with a lag.

Confirming the inverted hammer, Rajesh Palviya, SVP, Axis Securities, said this could be a one-day formation and if the market closed above Friday’s low it could test 22500.

“There is traction in the market so we can’t easily bank on today’s technical chart. We will have to see what Monday portends,” he said.

FPIs have sold shares worth ₹ 23691 crore so far this year after net buying ₹ 1.7 trillion in 2023. For DII’s the respective figures stand at ₹ 30.,079 crore.