Trade Setup: Market Rebounds On Weekly Expiry Day, More Upside Seen For Nifty; Earnings In Focus

In a rollercoaster trading session on Thursday, the Nifty index witnessed a dramatic turnaround, as bulls and bears grappled for control, leaving investors on edge.

Until the final stretch of trading, the Nifty appeared poised for a downturn, hovering dangerously close to the 22,000 mark amidst cautious sentiments. Global cues initially hinted at optimism, but the index struggled to maintain momentum, casting doubts on its ability to surpass key moving averages.

However, a sudden surge in buying activity during the last 40 minutes of trading altered the picture entirely. The Nifty rallied, recovering a staggering 350 points and breaking above the 22,400 mark, closing the session on a high note. This turnaround not only salvaged the day but also propelled the index into positive territory for the week, boasting gains of 0.8%.

As the extended trading week draws to a close, investors brace themselves for a flurry of earnings reports set to drive market sentiment. Companies such as Vodafone Idea, Biocon, and Crompton Greaves Consumer are among those expected to react to their financial results released after Thursday's market close.

Friday's session also promises a deluge of earnings announcements, with JSW Steel, Astral, and Bandhan Bank, among others, slated to disclose their March quarter performance. The outcome of these reports is likely to influence market dynamics significantly.

Foreign investors remained net sellers on Thursday, although at a reduced scale compared to previous sessions, while domestic investors continued to exhibit bullish behaviour, outnumbering the selling activity.

Meanwhile, the Nifty Bank mirrored the Nifty's volatile trajectory, staging a remarkable recovery from its intraday low. After finding support at 47,350, the index rebounded by 600 points, nearly breaching the 48,000 mark before the session's close. The Nifty Bank is now up 1.2% for the week.

In the futures and options segment, Nifty 50's May futures witnessed a reduction in open interest, accompanied by a decrease in premium. The Nifty Bank also saw a decline in open interest, indicating a cautious stance among traders. Notably, Bandhan Bank entered the F&O ban list, while LIC Housing exited it.

Several stocks, including Balrampur Chini, Biocon, and Zee Entertainment, remain in the ban list. Looking ahead to next Thursday's weekly expiry, options data suggest heightened interest in call strikes at 22,400, 22,600, and 23,000, as well as put strikes between 22,000 and 22,400.

As investors gear up for Friday's trading session, a slew of earnings reports is poised to shape market sentiment, with companies like Vodafone Idea, Vedanta, and Biocon in the spotlight.

Vodafone Idea: The telecom giant's net loss widened in the latest quarter, reaching Rs 7,674.6 crore, while revenue remained flat at Rs 10,606.8 crore. Despite stagnant figures, the company maintained an EBITDA margin of 40.9% and revealed plans for capital expenditure in the coming years.

Vedanta: Vedanta announced its first interim dividend of Rs 11 per share for the financial year 2025, alongside plans to raise funds worth Rs 8,500 crore through equity methods. The decision buoyed investor confidence, with the record date for the dividend set for May 25.

PB Fintech: Promoters of PB Fintech intend to offload up to 1.86% equity via block deals, aiming to raise around Rs 1,053 crore. Proceeds from the stake sale will be allocated towards tax payments and future ESOP exercises, with no further plans for divestment for at least a year.

Biocon: Biocon reported a net profit of Rs 135.5 crore, driven by robust performance in its biologics business. Despite a decline in EBITDA and margin, the company witnessed increased market share for key products globally, signalling resilience amidst challenging market conditions.

CONCOR: Container Corp posted a 13.5% rise in net profit, reaching Rs 317 crore, supported by a 6.5% increase in revenue. The company's EBITDA margin expanded to 21.4%, reflecting operational efficiency and strategic initiatives.

Crompton Greaves: Crompton Greaves saw a modest increase in net profit and revenue, despite a slight dip in EBITDA. The company achieved its highest-ever standalone revenue, driven by strong performance in the electrical consumer durables segment.

Triveni Turbines: Triveni Turbines reported a significant rise in net profit and revenue, buoyed by record order bookings and robust aftermarket segment performance. With healthy investments and a strong order pipeline, the company remains well-positioned for growth.

JK Paper: JK Paper witnessed a decline in net profit and EBITDA, attributed to increased raw material costs and pricing pressures. Despite challenges, the company continues to focus on operational efficiency and remains optimistic about future prospects.

After a day of record-breaking highs and cautious optimism, global markets remained steady as investors digested a mix of economic data and corporate earnings reports.

US stock futures tied to the Dow Jones Industrial Average showed minimal movement in overnight trading, reflecting the subdued sentiment following the blue-chip index's flirtation with the historic 40,000 mark. Despite the previous session's excitement, futures saw only a marginal increase of 8 points, with both S&P 500 and Nasdaq 100 futures trading similarly.

US Treasury yields saw a slight uptick on Thursday as investors analyzed the latest economic indicators and their potential impact on Federal Reserve policy. The yield on the 10-year Treasury rose by over 2 basis points to 4.381%, while the 2-year yield climbed by 6 basis points to 4.797%.

European markets closed lower on Thursday as earnings reports dampened a relief rally spurred by softer-than-expected US inflation data. The pan-European Stoxx 600 index ended the day down by 0.24%, with mixed performances across sectors, notably a decline in oil and gas stocks and gains in mining shares.

Oil prices edged higher in Asian trading on Friday, with Brent crude poised for its first weekly increase in three weeks. Signs of improving global demand and easing inflation in the United States buoyed prices, with Brent futures rising 0.3% to $83.48 a barrel, and WTI futures up 0.2% to $79.41 a barrel.

Asia-Pacific markets presented a mixed picture on Friday as investors analyzed key economic data from China. Retail sales in China rose by 2.3% in April, falling short of expectations and signalling a slower pace of recovery. Despite this, Hong Kong's Hang Seng index gained 0.48%, while mainland China's CSI 300 index remained flat.

Japan's Nikkei 225 slipped by 0.36%, reflecting cautious sentiment amidst economic uncertainties. However, the broader-based Topix index reversed early losses to add 0.23%. In contrast, South Korea's Kospi fell by 0.76% following unchanged unemployment data for April, while Australia's S&P/ASX 200 declined by 0.49%.

As the market digests these earnings reports, investor attention will also be on other factors such as global cues, economic indicators, and corporate developments. With volatility expected, prudent investment decisions and a keen eye on company fundamentals will be essential for navigating Friday's trading session.