Trade Setup: Market Likely To Open At Record High; Nifty To Break Above 22,600, Tech Earnings In Focus

Throughout the previous week, the Nifty index demonstrated resilience amidst global market uncertainty, maintaining a steady course despite awaiting key triggers from the Reserve Bank of India (RBI). Ending the week with nearly a percent gain, the Nifty remained ensconced within a narrow range, fluctuating between 22,300 and a brief surge towards 22,600.

The focus now shifts to the upcoming truncated week, with attention divided between global cues and the eagerly anticipated quarterly results from Indian technology giants. Despite a shaky performance on Wall Street, where benchmarks reported their worst week of 2024, the US markets managed a rebound on Friday, adding a touch of optimism to the trading landscape.

As the earnings season kicks off, all eyes are on major players in the Indian tech sector. TCS, set to begin the earnings season on Friday, is preceded by Wipro, which made headlines as CEO Thierry Delaporte's sudden resignation sent ripples through the industry. Delaporte's departure, just seven months after receiving public backing from the company's Chairman Rishad Premji, adds an air of uncertainty to Wipro's upcoming earnings report.

In addition to tech earnings, investors will digest a slew of updates from banks, NBFCs, and FMCG companies, providing valuable insights into the potential trajectory of the earnings season.

Meanwhile, the Bombay Stock Exchange (BSE) prepares to implement a Limit Price Protection (LPP) mechanism from April 16, 2024, aimed at bolstering pre-trade risk control measures in the equity derivatives segment, a move welcomed by market participants.

Friday's trading session saw the Nifty trade within a narrow 110-point range, ending the day flat. Foreign institutions emerged as net buyers in the cash market, while domestic institutions were net sellers, reflecting a mixed sentiment among investors.

While the Nifty maintained its subdued stance, the standout performer was the Nifty Bank, inching tantalizingly close to its previous record high of 48,636. Buoyed by HDFC Bank's robust performance, the index soared by 3% over the week, marking HDFC Bank's best weekly advance since November 2022.

Turning to Futures and Options (F&O) cues, Nifty 50's April futures witnessed a 1.3% drop, shedding 1.23 lakh shares in Open Interest, now trading at a premium of 81.8 points compared to 97.6 points earlier. Conversely, Nifty Bank's April futures recorded a 14.1% increase, adding 2.6 lakh shares in Open Interest.

In the F&O domain, Bandhan Bank, Hindustan Copper, SAIL, and Zee Entertainment entered the ban list, signalling heightened volatility in these stocks.

Looking ahead to the April 10 expiry, Nifty 50's Call side strikes between 22,500 and 22,800 witnessed Open Interest addition, while the Put side strikes between 22,400 and 22,500 showed similar activity, indicative of market participants hedging their positions amidst prevailing uncertainty.

Investors brace for an eventful Monday as the stock market gears up to react to a plethora of significant developments and corporate announcements, promising a day filled with volatility and opportunities.

Wipro: The abrupt resignation of CEO Thierry Delaporte, a year before the completion of his tenure, marks another high-profile exit from Wipro. Delaporte will continue in his role until May 31, 2024, with Srinivas Pallia set to succeed him as the new CEO.

Vodafone Idea: Vodafone Idea's board has approved the issuance of up to 139 crore equity shares to Oriana Investments Pte. Ltd. This issuance, priced at Rs 14.87 per share, amounts to Rs 2,075 crore, aiming to bolster the company's financial position.

Titan: Titan registers impressive revenue growth of nearly 17% in the March quarter, with robust performance across its various business segments. Notably, the jewellery business witnesses an 18% growth, while emerging businesses like Taneira and CaratLane report substantial increases in revenue.

Indiabulls Real Estate: The company's board approves fundraising worth Rs 3,911 crore through a preferential issue of shares, attracting investments from prominent entities like Embassy Group, Blackstone Real Estate Fund, and others. Additionally, asset acquisitions worth Rs 1,853 crore are greenlit to revitalize business operations.

JSW Energy: In a landmark move, JSW Energy's board approves a substantial equity issuance to qualified institutional buyers (QIBs), raising Rs 5,000 crore. Notable investors like GQG Partners and Nomura India secure significant stakes in the company, marking one of the largest primary equity raises in the Indian power sector's history.

Nykaa: Anticipation surrounds Nykaa's quarterly results, with the company expecting strong year-on-year growth in net sales value and revenue. The Beauty, Personal Care, and Fashion (BPC) segment's gross merchandise value is poised for robust growth, outpacing industry averages.

Info Edge: Standalone billings for the quarter witnessed a healthy increase, reflecting sustained growth momentum in recruitment solutions and property verticals. The company continues to demonstrate resilience and adaptability in a dynamic market environment.

Adani Wilmar: Adani Wilmar reports double-digit volume growth in both its edible oils and foods businesses, achieving record-high volumes during the quarter. The company's branded products segment records an impressive 18% revenue growth year-on-year.

Godrej Consumer Products: While operating conditions in India remain challenging, Godrej Consumer Products sees positive growth trajectories in international markets like Indonesia. However, currency devaluation in certain regions poses challenges to overall sales growth projections.

Voltas: Voltas celebrates a milestone, selling 2 million units of air conditioners during the financial year 2024, with significant volume growth recorded in both ACs and home appliances segments.

Chola Investment & Finance: Chola Investment & Finance reports a notable increase in disbursements and assets under management (AUM), underscoring robust growth in its core business operations.

As global markets gear up for the new trading week, a sense of cautious optimism pervades amidst a landscape marked by rebounding futures, easing Middle East tensions, and impending central bank decisions.

US stock futures witnessed a modest uptick in overnight trading Sunday, signalling a potential rebound after a lacklustre week. Futures on the Dow Jones Industrial Average climbed 55 points, with S&P 500 futures and Nasdaq 100 futures inching up 0.1%. Last week's downturn saw the Dow posting its worst weekly performance since March 2023, while the S&P 500 and Nasdaq Composite also suffered losses.

European markets closed lower on Friday, wrapping up a subdued first trading week of the new quarter. The pan-European Stoxx 600 index ended 0.84% lower, with all sectors and major bourses in negative territory. The decline was led by losses in retail, utilities, and household goods stocks, reflecting investor caution amid lingering uncertainties.

Oil prices retreated on Monday as tensions in the Middle East eased, with Brent crude sliding under $90 a barrel. The decline followed Israel's withdrawal of soldiers from southern Gaza and commitments to ceasefire talks. Brent crude futures slipped $1.70 to $89.47 a barrel, while US West Texas Intermediate crude fell $1.62 to $85.29 a barrel, reflecting market sentiments driven by geopolitical developments.

Asia-Pacific markets exhibited mixed performances ahead of crucial central bank decisions and inflation data releases. Japan's Nikkei 225 rebounded, crossing the 39,000 mark, while South Korea's Kospi and Australia's S&P/ASX 200 also saw gains. However, Hong Kong's Hang Seng index and mainland China's CSI 300 experienced declines, reflecting broader market uncertainties.

In India, the GIFT Nifty was observed trading at a premium of over 70 points from Nifty Futures Friday close, signalling a gap-up start for the Indian market. The premium indicates investor optimism and expectations of a positive opening amidst global cues and domestic factors.

Investor focus remains on upcoming central bank decisions scheduled for the week, including meetings by the Bank of Korea, Reserve Bank of New Zealand, Bank of Thailand, and the Central Bank of the Philippines. Additionally, inflation numbers from the US and China are eagerly awaited, offering insights into the trajectory of global economic recovery and potential monetary policy shifts.

As the markets brace for a truncated trading week, the confluence of global cues, corporate earnings, and regulatory changes sets the stage for a dynamic and potentially volatile period ahead.

Disclaimer: The opinions and suggestions provided above represent the views of individual analysts and do not reflect those of GoodReturns or the author. We recommend investors consult with certified experts before making any investment decisions.