Trade Setup Thursday: Key Factors To Drive Sensex, Nifty Today; Focus On Q2 GDP Data

Indian market is likely to open between positive to flat notes on Thursday tracking mixed global cues. However, Sensex and Nifty 50 may gain traction later in the day as traders will focus on GDP numbers for Q2FY24 which is scheduled after market hours. In the early trade, Gift Nifty traded higher, while Asian stocks traded steady with Australian and Japanese stocks muted and Hong Kong futures wet up. Meanwhile, Wallstreet settled mixed overnight after a US Federal speaker hinted at rates cut in the first half of 2024.

Siddhartha Khemka, Head - of Retail Research, at Motilal Oswal Financial Services said, "Domestic equities rallied for a second consecutive day on back of positive global cues and gains in heavyweights. Nifty surpassed the 20k levels for the first time after September and closed with gains of 207 (+1%) points at 20,097 levels. Majority of the sector ended in green with buying seen in IT, Banking, Financial and Auto. Market optimism was fuelled by better-than-expected US consumer confidence data and dovish comments from US Fed official Christopher Waller, suggesting rate cut in 2024."

Further, Khemka said, "upgrade in India's GDP growth forecast by global rating agency S&P to 6.4% for FY24 and FIIs turning net buyers from last four trading session boosted the sentiments. All these factors led BSE-listed companies to reach ₹333bn market-cap. We expect the market momentum to sustain over the next few days. However, several important events including India GDP, monthly F&O expiry, state election exit polls and OPEC+ meeting on Thursday could induce some volatility over the last 2 days. Market will also react to US GDP data to be release late today."

Yesterday, Sensex ended at 66,901.91, soared by 727.71 points or 1.10%, while Nifty 50 ended at 20,096.60, higher by 206.90 points or 1.04%. Meanwhile, Bank Nifty stood at 44,566.45, up by 685.50 points or 1.56%.

On the performance, Vinod Nair, Head of Research at Geojit Financial Services said, "The market saw incredible upward momentum today, Nifty surpassing the 20,000 mark, driven by strong listing gains of ongoing IPOs and dovish statements from US Fed officials, intensifying expectations for early rate cuts. This was demonstrated by the rise in Mid & Small caps and drop in US bond yields and Dollar index. Ease in yield is attracting foreign funds to emerging markets. Indian IT, automotive, banking, and oil & gas led the overall momentum, while real estate is lagging after hitting a record high. Looking ahead investors will closely monitor the outcome of the forthcoming exit poll, the OPEC+ meeting, and India's GDP data to assess the short-term trajectory."

Technically, on Nifty, Rupak De, Senior Technical analyst at LKP Securities said, "Nifty moved up smartly as the bulls remained at the helm following a consolidation breakout on the daily chart. Besides, the index is sitting comfortably above the crucial short-term moving average. The overall trend looks positive with broader market participation and a smart recovery in the Bank Nifty. Over the short term, the Nifty might move towards 20450-20500 unless it falls below 19850."

For Bank Nifty, Kunal Shah, Senior Technical & Derivative analyst at LKP Securities said, the index witnessed a robust comeback by the bulls, driving the index up by over 700 points. Currently in a strong buy mode, the index has established a solid support base within the 44300-44200 zone, providing a cushion for bullish sentiment. The next significant hurdle for the index is at 44700, and its ability to decisively surpass this level will determine whether a period of consolidation is in store for the near term.

To investors, Ajit Mishra, SVP - Technical Research, Religare Broking said, the strength in the banking index has helped Nifty to regain momentum and we expect the prevailing tone to continue. Nifty may take a breather around the previous record high i.e. 20,222.45 levels and then gradually inch toward the 20,500 level. We thus suggest focusing on quality large cap names from across sectors and picking selectively from the broader indices.

Meanwhile, Shiju Koothupalakkal - Technical Research Analyst, Prabhudas Lilladher recommended buying in 3 stocks. These are:

- BUY M&M at 1619 stoploss 1600 Target 1685

- BUY TATA MOTORS at 712.35 stoploss 700 Target 745

- BUY MOTHERSON at 92.55 stoploss 90.50 Target 97

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.