Trade Setup: Nifty Slides Below 22,000 Mark; Global Markets Plunge On Reports Of Explosions In Iran

On Thursday, the Indian stock market witnessed unexpected swings, leaving investors bewildered and uncertain about the near-term direction. Until midday, there was a semblance of recovery from oversold levels, with the market showing resilience around the 22,300 mark. However, what followed was a dramatic downturn that blindsided both bullish and bearish traders alike. Within moments, the Nifty plummeted by a staggering 200 points from its intraday high, only to swiftly recoup about 100 points shortly after.

Despite the brief recovery, the index struggled to maintain its gains. For the first time since March 20, the Nifty closed below the crucial 22,000 mark, signifying a notable shift in market sentiment. The downturn was broad-based, with almost every major bank contributing to the losses during the weekly expiry session. This retreat marks a significant reversal, with the index relinquishing over two-thirds, or more than 700 points, of the 1,065-point rally, witnessed from its previous swing low of 21,710.

The IT sector, which had been a drag on the market in recent sessions, surprisingly ended the day on a positive note. However, this uptick may be short-lived. Infosys, a heavyweight in the IT sector, reported quarterly results that fell short of expectations across the board. The company's revenue growth forecast for the fiscal year, ranging between 1% and 3%, disappointed analysts, leading to concerns about the sector's performance in the upcoming quarters.

Adding to the market's woes, the commencement of the first phase of India's Lok Sabha polls looms large. With polling set to begin across various states, including Tamil Nadu, Rajasthan, parts of Maharashtra, West Bengal, and Uttar Pradesh, political uncertainty further compounds investors' anxieties. Approximately 16.62 crore voters are expected to cast their ballots in this initial phase, setting the stage for a closely watched electoral process.

Foreign institutional investors remained heavy sellers in the cash market on Thursday, exacerbating selling pressure, while domestic investors attempted to counterbalance the trend with their buying activity. However, their efforts proved insufficient to stem the market's downward trajectory.

The banking sector, particularly heavyweight banks, bore the brunt of the sell-off, dragging down the Nifty Bank index. Despite momentarily slipping below the 47,000 mark during intraday trading, the index managed to close above this level, albeit after shedding over 400 points. The Nifty Bank has already shed 2,000 points over the past four trading sessions, positioning it for its worst weekly performance since January.

In the futures and options (F&O) segment, significant movements were observed. The April futures of the Nifty 50 witnessed a notable increase in open interest, trading at a premium compared to previous levels. Conversely, the Nifty Bank's April futures also saw an uptick in open interest. The Put-Call Ratio for the Nifty 50 indicated a slight improvement, suggesting a cautious sentiment among options traders.

In F&O ban updates, Exide Industries reentered the ban list, joining other stocks such as Balrampur Chini, Bandhan Bank, GNFC, Hindustan Copper, Vodafone Idea, Metropolis, NALCO, Piramal Enterprises, SAIL, and Zee Entertainment.

Looking ahead to the April 25 expiry, options data revealed increased open interest for Nifty 50 strikes between 22,000 and 22,300 on the Call side, while the Put side saw similar activity for strikes between 21,500 and 22,000.

As investors gear up for Friday's trading session, a slew of corporate announcements and market movements are set to influence the day's trading. From earnings reports to strategic acquisitions, here's a roundup of stocks to watch out for:

Infosys: The IT giant faced a setback with its FY25 revenue growth forecast falling short of expectations, ranging between 1% to 3%. The company's US Dollar revenue, margin, and profit also missed estimates, overshadowing the reported profit beat attributed to another income component. Additionally, Infosys declared a total dividend of Rs 28 per share.

Bajaj Auto: On the other hand, Bajaj Auto delivered a robust performance, surpassing expectations across key metrics. The company reported a net profit of Rs 1,936 crore. Revenue stood at Rs 11,485 crore, also higher than estimates, with EBITDA and margin reflecting positive trends. Margin expansion by 80 basis points and a 34.4% growth in EBITDA underscored the company's resilience amidst challenging market conditions. Bajaj Auto also declared a dividend of Rs 80 per share.

ITC: ITC made headlines with its wholly-owned subsidiary, ITC Infotech India, announcing a significant acquisition. The subsidiary entered into a share purchase agreement to acquire 100% shares in Blazeclan Technologies Pvt Ltd for a cash consideration of Rs 485 crore. Blazeclan, known for its expertise in cloud migration and digital services, is expected to enhance ITC Infotech's capabilities in servicing customers within multi-cloud and hybrid cloud environments.

Gokaldas Exports: The apparel manufacturer initiated a Qualified Institutional Placement (QIP) to raise funds. With a floor price of Rs 789.99, representing a 3% discount to Thursday's closing price, the move aims to bolster the company's financial position. The board is scheduled to reconvene on April 23 to determine the issue price of the QIP, signalling efforts to optimize capital structure.

Mahindra Lifespaces: Mahindra Lifespaces showcased strong demand dynamics with the successful sale of homes worth Rs 350 crore within two days at Mahindra Zen in Bengaluru. Notably, these homes mark the city's first net zero waste + energy residences, reflecting the growing preference for sustainable living solutions.

TV18 Broadcast and Network18: The media conglomerates reported contrasting financial performances. While TV18 Broadcast witnessed a 66% year-on-year increase in consolidated revenue to Rs 2,330 crore, it incurred an operating EBITDA loss of Rs 161 crore, attributed to operating losses from sports and digital segments. On the other hand, Network18 reported a consolidated revenue surge of 63% to Rs 2,419 crore but faced an operating EBITDA loss of Rs 190 crore.

ICICI Securities: The financial services provider reported impressive financials, with net profit soaring to Rs 536.5 crore from Rs 262.7 crore last year. Revenue surged by 74.4% to Rs 1,543.2 crore, while consolidated EBITDA witnessed a robust growth of 96.2% to Rs 1,079.3 crore.

Rail Vikas Nigam and Indus Towers: In the infrastructure sector, Rail Vikas Nigam signed an MoU with Turkish Engineering Consulting and Contracting - TUMAS India for partnership and collaboration in public transportation and infrastructure projects in India. Meanwhile, Indus Towers inked an MoU with NTPC Green Energy to address the growing need for green energy solutions and support the government's carbon-neutral objectives.

Mastek: Finally, Mastek delayed its board meeting to consider results, rescheduling the announcement to April 26, raising anticipation and curiosity among investors regarding the company's performance and strategic outlook.

Thursday evening witnessed a tumultuous turn in global markets following unconfirmed reports of explosions near the airport in Iran's central city of Isfahan. The news sent shockwaves through financial markets, triggering a flurry of activity and steep declines in US stock futures. Amidst heightened geopolitical tensions, investors braced themselves for potential ramifications on oil prices and broader market sentiment.

Iran's Fars news agency reported the explosions, citing uncertainty about their cause. In response, oil prices surged over 3% in Asia morning trading, with Brent crude futures surpassing $90 a barrel. This abrupt spike reflected concerns about potential disruptions to oil supplies and heightened geopolitical risks in the region.

In the US, futures on the Dow Jones Industrial Average plummeted by 430 points, marking a significant decline of 1.15%. Similarly, S&P 500 futures and Nasdaq 100 futures experienced sharp losses, dropping nearly 1.34% and 1.62%, respectively. The market's reaction underscored the nervousness among investors amidst escalating geopolitical uncertainties.

Even amidst the tumultuous backdrop, individual stocks faced their own challenges. Netflix shares, for instance, tumbled over 4% in extended trading despite reporting quarterly earnings that exceeded expectations. While the streaming giant saw a notable 16% increase in subscribers compared to the previous year, it announced plans to cease reporting paid memberships starting in 2025, adding to investor concerns.

The broader market sentiment was already strained, with the S&P 500 poised for its worst week in nearly six months. The index had witnessed five consecutive sessions of losses, culminating in week-to-date losses of 2.2%. If sustained, this would mark the S&P 500's third consecutive negative week and its most significant weekly decline since October 27, 2023, with the index now down 4.8% from its 52-week high.

Adding to the market jitters, US Treasury yields surged, with the 2-year Treasury yield nearing the critical 5% level. This rise was fueled by data suggesting strength in the manufacturing sector, further amplifying concerns about inflation and tightening monetary policy.

In Europe, markets closed slightly higher after a day of volatility, driven by speculation surrounding potential interest rate cuts by the European Central Bank. The Stoxx 600 index ended 0.3% higher, with sectoral performances mixed. While banks saw gains of 1.6%, oil and gas stocks suffered a 1.46% decline following a sharp drop in oil prices the previous day. Tech stocks also struggled, trading firmly in the red.

Meanwhile, across Asia, most major markets experienced declines. South Korea's Kospi and Kosdaq indices dropped by 2.32% and 2.18%, respectively, while Australia's S&P/ASX 200 fell by 1.48%. In Hong Kong, the Hang Seng index declined by 1.08%, while the mainland Chinese CSI 300 slipped by 0.47%.

As attention turns to the domestic market, the GIFT Nifty indicated a significant gap-down opening for Indian stocks, with cuts of nearly 300 points against Nifty Futures Thursday close. Against the backdrop of escalating geopolitical tensions and market volatility, investors remain on edge, bracing themselves for further developments and their potential impact on global financial markets.