Trade Setup For Thursday: Fed Minutes, IT Stocks, TCS Q2 Among Key Factors To Know Ahead Of Opening Bell

Indian market is likely to see a positive opening on Thursday tracking the upside trend of global cues. Traders have taken comfort from the possibility of a dovish stance from Fed in the forthcoming policy. In the early trade, Gift Nifty traded higher, while Asian shares also gained traction after Wall Street settled in green overnight.

At home, investors will also react to TCS Q2 results which was broadly in line with Street's expectations. Also, focus will be in major IT stocks like HCL Tech and Infosys as they are scheduled to announce their Q2 earnings later in the day.

During the today's session, Nifty's biggest support range is expected between 19,800 to 19,900, however, potential of upside to reach 20,000 mark is also on the cards.

In the minutes of US Federal Reserve, officials were split of opinions whether additional interest rate hikes would be needed and more policy tightening. However, Fed Apart from this, investors are gauging the developments in the Israel-Hamas conflict.

In the early trade, Gift Nifty traded marginally up by 19 points or 0.10% to 19,849.0. The benchmark opened at 19,830.0 and ranged between 19,864.0 to 19,838.5.

Further, Asian stocks traded highe with Japanese and Hong Kong shares outperforming, as traders assessed the impact of Israel-Hamas war on the market. Also, ongoing hopes of stimulus in China, along with positive trend in US stocks after Fed minutes further lifted the performance.

Japan's Nikkei 225 climbed 386.77 points or 1.21%, while Hang Seng index jumped 335 poinrs or 1.9%. China's mainboard SSE Composite Index was up 0.6%, while South Korea's KOSPI index zoomed 0.8%. Australia's ASX/200 index was also in the green.

Overnight, Wall Street soared despite mixed opinions from Fed in regards to rate hike cycle ahead, however, their focus also shifted towards the CPI inflation data which is scheduled to come out on Thursday. Inflation data will give much clearer picture of upcoming rate hikes, although, Fed has already hinted for one additional interest rates hike by end of 2023.

The Dow Jones Industrial Average gained 65.57 points, while the S&P 500 was up 0.43% and the tech-heavy Nasdaq Composite index outperformed its counterparts with an upside of at least 0.71%.

On Wednesday, Sensex ended at 66,473.05, up by 393.69 points or 0.60%, while Nifty rallied by 121.50 points or 0.62% to settle at 19,811.35. Bank Nifty gained by 157 points to end at 44,516.90. Except for PSU banks and IT stocks, all other sectoral indices held a bullish tone with FMCG, media and auto stocks outperforming.

On yesterday's performance, Vinod Nair, Head of Research at Geojit Financial Services said, ""The total market breadth was strong, as investors believe that the Middle East skirmish will be contained within the region and should not impact the crude price. Amid dovish comments from the US federal reserve, the US 10-year bond yield traded lower. Sequentially, the September India CPI is expected to cool due to ease in food and fuel inflation. And Q2 earning season will kick-start with the IT sector, which has a moderate expectation, however the broad corporates are expected to provide a bumper result."

The only spoilsport for the Indian market which has continued throughout the month would be foreign funds outflow and Wednesday witnessed similar trend. The Foreign institutional investors (FIIs) sold Rs 421.77 crore in Indian stocks, although, domestic institutional investors (DII) offset the impact of outflow from FIIs by becoming major net buyers with an inflow of Rs 1,032.02 crore.

Here is the Trade Setup for Thursday Of Indian Market:

Day Trading Guide For October 12th:

Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher expects a support level in the range of 19,700/19,650 for Nifty 50 on Thursday, however, resistance is factored around 19,550/20,000. While she sees Bank Nifty as having a support level of 44,200/44,150 with resistance around 44,900/44,950.

Meanwhile, Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services said, "we expect the market momentum to continue on the back of positive global cues, easing of US bond yields, and strong domestic economic position. Further, with the start of Q2 results, we expect a lot of stock-specific action as well as sectorial rotation in the market. IT sector would be in focus as TCS will announce its Q2FY24 post-market Wednesday followed by Infosys and HCL Tech on Thursday. On the economic front, investors would take cues from the FOMC meeting minutes and US core PPI data to be released late Wednesday. Markets would also watch for UK GDP data, India CPI and Manufacturing output data and US CPI data to be released on Thursday."

Also, Ajit Mishra, SVP - Technical Research,Religare Broking said, "The recent stability on the global front has prompted this rebound and indications are in the favor of the prevailing tone to continue. Traders should look for buying opportunities on dips but maintain focus on risk management, citing a rise in volatility due to the earnings announcements."

Intraday Stocks Picks:

Parekh recommended buying three stocks during Thursday's trade. These are:

1. Himatsingka Seide: Buy at Rs 139.90 with a stop loss of Rs 137 for a target price of Rs 152.

2. Ge Power: Buy at Rs 170.95 with a stop loss of Rs 168 for a target price of Rs 185.

3. Man Industries: Buy at Rs 203.40 with a stop loss of Rs 199 for a target price of Rs 215.

Nifty Spot Index Level:

Rupak De, Senior Technical analyst at LKP Securities said, that the Nifty remained in strength throughout the day, with bullish sentiment prevailing. On the hourly chart, the Nifty has moved above the 200-period Simple Moving Average (SMA) following a breakout from an inverted head and shoulders pattern. In the short term, the index is likely to maintain its momentum. On the upside, it could potentially approach the 20,000 level. The support range is positioned at 19,700 - 19,750.

Bank Nifty Index Support Level:

Kunal Shah, Senior Technical and derivative analyst at LKP Securities said, the index experienced a consolidation phase on the day of expiry, with support evident at 44,400 and resistance at 44,700 levels. The overall undertone of the index remains bullish, suggesting that a "buy on dip" approach is appropriate. If the index manages to break above the 44,700 level, it is likely to see further upside potential toward the 45,000 mark.

Disclaimer:

The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.