Trade Setup For Thursday: Key Factors That Will Drive Sensex, Nifty; Stocks To Buy Today

After making a strong surge, Indian markets are expected to maintain the momentum on Thursday as well. In the early trade, Gift Nifty traded in the green, indicating a positive start for Sensex and Nifty. Also, Wall Street rallied owing to an easing in producer prices which hinted that the US Federal Reserve is most likely done with hiking interest rates. As long as the Nifty stays above the 19,500 mark, the benchmark has the potential to climb between 19,700 to 19,900 during the day.

Yesterday, Sensex skyrocketed by 742.06 points or 1.14% to end at 65,675.93, while Nifty 50 zoomed by 231.90 points or 1.19% to settle at 19,675.45.

On the market performance, Vinod Nair, Head of Research at Geojit Financial Services said, "The market's strong gap-up jump in response to positive global cues on account of the softer than anticipated US and UK's inflation data, highlights the optimism for an end to the interest rate cycle, as evidenced by the ease in bond yields. This is likely to draw FII flows into emerging markets, which is good for India considering the current better earnings season and the festive demand pick-up. The drop in the CPI for India also improved the mood. The rebound was broad-based with IT, realty, oil & gas, metal, and auto leading the way."

On sectoral indices, Siddhartha Khemka, Head - of Retail Research, Motilal Oswal Financial Services Ltd said, all sectorial indices, including the broader market ended in the green. IT, Realty, Oil & Gas and Auto were top gainers today. A rally was seen in global markets after weak U.S. inflation data raised hopes that the interest rate-hiking cycle has reached its peak. Additionally, news of fresh stimulus in China and a sharp fall in the UK's inflation boosted the sentiments.

Khemka expects the market to maintain its momentum, driven by positive domestic data, cooling off US bond yields and the dollar index.

For Thursday, Ajit Mishra, SVP - Technical Research, Religare Broking Ltd said, "Nifty has decisively crossed the trend line hurdle and looks set to test 19850 now. Interestingly, noticeable contributions from heavyweights like Reliance, Infosys and TCS, which were on the sidelines, largely fuelled the upmove. And, we expect their participation to continue thus reiterating our view to maintain a "buy on dips" approach and focus on stock selection."

Also, Rupak De, Senior Technical analyst at LKP Securities in his technical view added, "Nifty has witnessed a robust upward movement, propelled by a strong global equity market sentiment, particularly following a gap-up opening. On the daily chart, the index has shown significant upward momentum after a consolidation phase, indicating an increase in optimism. The overall trend appears positive, with the index consistently maintaining levels above the critical moving average. Looking ahead, bullish sentiment is likely to persist as long as the index remains above 19,500. On the upper side, resistance is anticipated in the range of 19,700 to 19,850."

In the case of Bank Nifty, Rupak De, Senior Technical analyst at LKP Securities said, the index has consistently maintained its position above the crucial moving average on the daily chart, indicating a positive trend. Key support is situated at 44,000, and the sentiment is expected to stay optimistic as long as it remains above this level. On the upside, there is a potential movement towards 44,750.

For Thursday's trade, Shiju Koothupalakkal - Technical Research Analyst, Prabhudas Lilladher has recommended buying in 3 stocks. These are:

- BUY COCHIN SHIPYARD at 1098 stoploss 1075 Target 1170

- BUY L&T Technology Services at 4391 stoploss 4320 Target 4600

- BUY SBICARDS at 766.60 stoploss 753 Target 797

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.