Markets closed higher, clocking gains for the third consecutive session buoyed by rally in outsource shares and improved investor sentiment after crude prices edged lower.
Markets opened in the green and extended the gains followed by positive global cues.
The benchmark Sensex ended up 145 points, at 18,351 and the S&P CNX Nifty advanced 42 points, at 5522.
The Nifty traded in a narrow band of 68 points and the India VIX (Volatility Index) declined to the 20 mark which may give a positive momentum to the markets going forward.
According to the derivatives data markets are set to break out on the upside.
Ashish Chaturmohta, vice president- derivatives and technical analyst, at IIFL Wealth said, "Markets will remain positive until Nifty sustains above 5400.
"Overall put writing was seen at 5500 and 5400 strike prices suggesting multiple support levels.
Call writing was seen at 5700 level which indicates resistance." Chaturmohta added, "if the Nifty holds above 5500, we may see market heading towards 5600-5620 levels in couple of days."
The foreign institutional investors) were net buyers of Rs 1615 cr in the Indian equities in March so far, but analysts do not see this as a sign of trend reversal.
Tarun Sisodia, Executive Director-Institutional Equity from Anand Rathi said, "the trend reversal would happen only between June-August period, when the emerging market as an asset class would start looking more attractive on risk-return profile vis-a-vis developed markets."
On the macro-economic front, Inflation edged marginally higher, at 10.05% year on year for the week ended March 12 against 9.4% the previous week.
The primary articles price index was up 13.53% compared to 12.3% percent week on week.
Brent crude declined for the second day in a row, down 0.4% to $115 per barrel after Portugal's Prime Minister resigned because the parliament rejected its austerity plans.
However, concerns continued in west Asia as coalition forces escalated their fight against Gadhafi, but North Atlantic Treaty Organization failed to decide who would command the operation.
Other markets in Asia also ended in higher except Japan which closed flat due to uncertainty over the nuclear plant and economic recovery.
Japan's Nikkei Stock Average closed down 0.2%, at 9,435.