Trade Setup: Sensex & Nifty Likely To Open With Gains; Strong Global Cues, US CPI Data & Q4 Results Support

As the Nifty index hovers around its 50-day Moving Average, bulls are gearing up for a crucial showdown to push it beyond the 22,300 mark, with hopes pinned on Thursday's trading session and the weekly options expiry.

In Wednesday's trading session, the Nifty made another attempt to breach the significant threshold but fell short, settling at 22,200. The index has been oscillating around this level for five consecutive sessions.

The Midcap Index extended its winning streak for the fourth consecutive day, signalling bullish sentiment. Similarly, the Smallcap Index closed higher, offering some respite to the bulls. Moreover, the stability in the VIX over the past two days adds to the optimism among market participants.

Thursday's session holds particular significance as it is the weekly options expiry. Anticipation looms regarding a potential breakout from the 22,150 - 22,300 range. Market experts predict passive inflows of over $2.5 billion post the MSCI rejig by the end of May.

Investor focus also shifts to corporate earnings, with companies like Dixon Technologies, Mankind Pharma, Titagarh Rail, and others slated to react to their post-market earnings reports. Mahindra & Mahindra, along with other prominent names such as Biocon and Hindustan Aeronautics, are among the last few reporting results on Thursday.

Institutional activity paints a mixed picture, with foreign institutions continuing to offload stocks while domestic institutions maintain a buying spree.

Meanwhile, the Nifty Bank witnessed a downturn on its weekly expiry day, facing a setback of nearly 200 points. However, the index maintains proximity to the 47,700 mark, requiring an uptick of 550 points to turn positive for the year.

In the derivatives market, Nifty 50's May futures saw a decline in Open Interest, while Nifty Bank's May futures witnessed an increase. Notable stocks like Biocon, Granules India, and LIC Housing Finance have entered the F&O ban, while Canara Bank exits the list. Others like Balrampur Chini and Vodafone Idea remain restricted.

For Thursday's weekly expiry, Nifty 50 Call strikes between 22,200 and 22,400 witnessed Open Interest addition, indicating bullish expectations among traders.

As investors gear up for Thursday's trading session, attention is drawn to several key players across various sectors, each with its own set of financial updates and strategic outlooks. Here's a rundown of what to expect:

Dixon Technologies: Dixon Technologies reported a net profit of Rs 98.5 crore, with revenue reaching Rs 4,658 crore. EBITDA stood at Rs 183 crore, although the margin declined by 110 basis points year-on-year. The company's management hinted at the addition of another global brand in the coming months.

Berger Paints: Despite challenges, Berger Paints showcased a volume growth of 13.9% for the quarter. However, value sales were impacted by 5%, attributed to various factors including one-off subsidies and increased ad expenses. Management remains optimistic about the decorative business, expecting double-digit volume growth for both Q1 and FY25, buoyed by expectations of a normal monsoon.

Mankind Pharma: Mankind Pharma surpassed profit and margin estimates, with exports witnessing a threefold increase. The company's domestic revenue grew by 10% year-on-year, crossing Rs 10,000 crore. Board approval for raising funds worth Rs 7,500 crore signals aggressive expansion plans.

Indian Energy Exchange: IEX reported a revenue increase of 13.4% to Rs 121.3 crore, with electricity volumes rising by 13% to 27 Billion Units.

NCC Limited: Financial Highlights: NCC witnessed a robust net profit increase of 25.2% to Rs 239.2 crore, with revenue soaring by 31% to Rs 6,485 crore. The company's order inflow for FY24 reached Rs 27,283 crore, contributing to a total order book of Rs 57,536 crore, with a significant portion from key states like Uttar Pradesh and Maharashtra.

HPL Electric & Power: HPL Electric & Power reported a strong net profit rise of 22.3% to Rs 13.7 crore, with revenue climbing by 17% to Rs 424.1 crore. Capacity expansion and automation measures underscore the company's approach in meeting rising demand, particularly in the metering segment.

NLC India: NLC India faced challenges with a revenue decline of 31% to Rs 3,540.6 crore, attributed to execution delays and other factors. Despite headwinds, the company remains focused on addressing operational issues and optimizing performance in the power and mining segments.

Pricol: Pricol reported a notable net profit increase of 39.3% to Rs 41.5 crore, with revenue rising by 11.1% to Rs 566.2 crore. Management is focused on adapting to market demands.

Paradeep Phosphates Limited: Paradeep Phosphates witnessed a significant net profit increase and revenue growth, despite global uncertainties. The company's volume growth and debt reduction efforts highlight its resilience and strategic vision amidst challenging market conditions.

Cosmo First: Cosmo First faced a decline in net profit and revenue, signalling challenges in the specialty chemicals segment. Despite current setbacks, the company remains optimistic about improving margins and expects steady growth in the coming quarters.

Global Market Cues
As Wall Street basks in record highs propelled by subdued inflation figures, US stock futures maintained a steady course Wednesday evening, indicating a positive start for the trading session ahead. Futures linked to the Dow Jones Industrial Average nudged up by 0.08%, while S&P 500 futures and Nasdaq 100 futures also saw marginal gains of 0.06% and 0.1% respectively.

The optimism follows a triumphant day for the major indexes, with all three - Dow Jones, S&P 500, and Nasdaq Composite - clinching record highs. The Dow surged by 0.88%, while the S&P 500 soared by 1.17%, crossing the 5,300 mark for the first time. The Nasdaq Composite closed even higher with a 1.40% gain.

Wednesday's buoyant market mood was largely attributed to the April consumer price index (CPI) reading, which rose by a modest 0.3% from the previous month. Although slightly below expectations, the CPI growth of 3.4% from a year ago reinforced concerns about inflationary pressures.

US Treasury yields retreated post the CPI release, with the 10-year note rate dipping by approximately 10 basis points to 4.344%, while the 2-year Treasury yield slid by about 9 basis points to 4.726%.

European markets reflected the positive sentiment, with the pan-European Stoxx 600 index closing 0.6% higher. Utilities stocks led the gains, while oil and gas sectors experienced a slight decline.

Oil prices extended gains on Thursday, buoyed by signs of robust demand in the US amidst softer-than-expected inflation data. Brent futures rose by 0.5% to $83.17 a barrel, while US West Texas Intermediate crude gained 0.6% to $79.06 a barrel.

Despite Japan's first-quarter GDP contracting at a higher rate than anticipated, Asian markets responded positively. Japan's Nikkei 225 and Hong Kong's Hang Seng index both saw gains, while China's CSI 300 index and South Korea's Kospi also registered upward movement. Australia's S&P/ASX 200 index surged by 1.7%.

In India, the GIFT Nifty surged higher on robust global cues, trading at a premium of nearly 100 points from Wednesday's Nifty Futures close, signalling a promising gap-up start for the Indian market.