Trade Setup for January 23: Will Nifty remain in a broad range between 23,000 and 23,400?

The Indian stock market experienced a volatile session on Wednesday, following Tuesday's sharp drop, but managed to recover, closing with gains of nearly 0.5%. The market opened on a positive note, attempted to climb higher early in the day, and although it faced some weakness during mid-session, it saw a strong bounce toward the end, closing near its highs.

Despite the selling pressure in the first half, strong performance from IT majors and a recovery in select heavyweights helped the market trim losses and close in the green. The benchmark indices outperformed broader market segments, led by IT and banking stocks. The Midcap Index ended in the red, though it managed to recover from its lowest points, with the IT Index gaining nearly 2% on the back of global cues.

HDFC Bank's Performance Boosts Market Sentiment

HDFC Bank saw a strong recovery, surging more than 2% from its intraday lows after posting in-line Q3 results for the October-December period. The bank reported an 8% YoY growth in Net Interest Income (NII), and a 2% rise in profits to ₹16,736 crore. However, there was a slight uptick in Gross NPA (1.42% vs. 1.36% in the previous quarter) and Net NPA (0.46% vs. 0.41%). Slippages increased to ₹8,800 crore, up from ₹7,800 crore in the September quarter.

Market Outlook for Thursday

With Thursday marking the weekly expiry of Nifty 50 options contracts, stocks like HUL, Pidilite, and Gravita India, which will react to their quarterly results after market hours on Wednesday, will be in focus.

The market's underlying trend remains weak, and Nifty seems to be in a broad range between 23,000 and 23,400. A decisive break above 23,400 could trigger renewed buying interest, while a slide below 22,975 could lead to further weakness toward 22,800, according to Nagaraj Shetti of HDFC Securities.

While some relief may be seen in the short term, the market remains uncertain due to several key triggers, including earnings announcements. The support zone for Nifty is at 23,000–22,900, followed by 22,800–22,700. Rajesh Bhosale of Angel One highlights that a sustained move above 23,350 could pave the way for further gains, with 23,000 providing strong support.

Stocks to Watch

BPCL: BPCL's net profit for the December quarter rose 94% QoQ to ₹4,649 crore, with a 10% rise in revenue to ₹1.13 lakh crore. The company is also progressing with the development plan for the Nunukan block in Indonesia for oil & gas reserves, with an investment of $121 million.

Pidilite Industries: Pidilite reported a 9% YoY increase in net profit to ₹557 crore, with a 7.6% rise in revenue to ₹3,234.9 crore. For the first nine months of FY24, the company’s net sales grew by 7% YoY.

Moody’s Rating Update: Moody's changed Bharti Airtel's outlook to positive, affirming its Baa3 ratings.

Laurus Labs: The US FDA issued a Form 483 with one observation for Laurus Labs’ New Jersey plant after an inspection between January 13 and January 21, 2025.

Shiva Cement: Shiva Cement, a subsidiary of JSW Cement, has entered into a ₹380-crore agreement with Bhushan Power and Steel Ltd for the development of a 1 MTPA cement grinding unit.

The Nifty is expected to trade within a defined range, and cautious traders may focus on the 23,000–23,350 zone. For bullish momentum to continue, a close above 23,500 is essential.