Trade Setup Friday: Key Inflation Data, Major Q3 Earnings To Drive Bulls And Bears In Sensex, Nifty Today

Indian market may trade between flat to mixed note on Friday after TCS and Infosys Q3 earnings, while investors will observe HCL Tech and Wipro earnings report due later in the day. India will also announce its CPI inflation data today.

In the early trend, Gift Nifty traded flat, while Asian stocks performed mixed after a subdued performance from US stocks owing to hotter-than-expected inflation print. Meanwhile, crude oil prices shot up after UK allowed military action in Yemen.

US inflation came in at 3.4% in December 2023, hinting a rate cut as soon as possible from Fed. Expectations of lower interest rates in March has taken rounds.

On the previous day, Sensex ended at 71,721.18, up by 63.47 points or 0.09%, While Nifty 50 closed at 21,647.20, up by 28.50 pointsw or 0.13%.

On yesterday's performance, Vinod Nair, Head of Research, Geojit Financial Services said, "In anticipation of inflation data from the US, the Indian market exhibited range-bound trade. Though investors anticipate US inflation to ease, global markets, expecting a CY24 interest rate cut, have already priced in optimism. Profit booking occurred amid moderating Q3 corporate earnings and concerns about premium valuations. Selling pressure on IT stocks stemmed from weak earnings estimates."

Intraday Trade Guide:

Prashanth Tapse, Senior VP (Research), Mehta Equities, on Friday, the focus will be on TCS & Infosys stocks, which will react to their Q3 earnings announcements. From a technical perspective, Nifty's aggressive upside targets are still seen at the psychological 22000 mark, while confirmation of strength is only above the 21836 mark.

Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services:

Domestically, investors are likely to trade cautiously as India will release inflation data on Friday. Hence, we expect the market to trade within the current range, along with stock-specific actions. IT space is expected to be in focus tomorrow as investors would react to TCS and Infosys Q3 results. Their management commentary and guidance would provide an insight into the future outlook for the sector.

Ajit Mishra, SVP - Technical Research,Religare Broking:

Nifty has been hovering in a range for almost two weeks now and a mixed trend in index majors is not offering any clear signal over the next directional move. We feel participants should prefer hedged positions, with the beginning of the earnings season and wait for clarity.

Kunal Shah, Senior Technical & Derivative Analyst, LKP Securities:

Nifty faced selling pressure within the 21700-21750 range, yet found stability as it held above its 10-day moving average, concluding the session with a positive close. Presently, Nifty's immediate support has shifted to 21600, while 21730 serves as a resistance level on the technical chart. The broader positional support for Nifty remains at 21500.

Bank Nifty index witnessed ongoing struggles between bulls and bears, leading to a volatile trading session. A significant hurdle for the index is identified at 48000, marked by substantial call writing. A decisive breakthrough above this level is anticipated to trigger a sharp short-covering rally. On the downside, the lower-end support remains intact at 46900. A close below this support level may intensify selling pressure in the market.

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