RIL, Infosys, Axis Bank, LTIMindtree earnings to influence market sentiment.

As we head into Thursday's session, the Nifty 50 index faces critical moments, with the weekly expiry of options contracts on the horizon. Investors will be keeping a close eye on earnings reports from Reliance Industries, Infosys, LTIMindtree, and Axis Bank, which could provide crucial directional cues for market movement.

Market Overview:

The Nifty 50 index saw a modest recovery on Wednesday, closing with a minor gain of 37 points, at 23,213. After a positive opening, the index traded within a narrow range between 23,150 and 23,300, with volatility persisting throughout the session. The index successfully held above the 23,200 mark, despite the uncertainty. The Midcap Index outperformed the Sensex and Nifty, although it closed off its intraday highs. Power stocks, particularly NTPC, saw strong moves on expectations of increased budget allocations.

Shares of Kalyan Jewellers were locked in a 10% lower circuit after a significant drop of 32% over the past nine trading sessions, despite the company's December quarter business update showing robust growth. Nine analysts have a 'Buy' rating on the stock, while one analyst maintains a 'Sell' rating.

Thursday’s trading session will see the weekly expiry of Nifty 50 options contracts, with key stocks such as L&T Technology Services (LTTS), HDFC Life, and Transrail Lighting reacting to their quarterly results, announced after market hours on Wednesday.

Key Earnings Reports to Watch:

Investors will look for direction from the upcoming earnings announcements, particularly from major companies like Reliance Industries, Infosys, LTIMindtree, and Axis Bank. These reports are expected to provide vital information to influence market sentiment.

Global Cues:

Global economic data will also play a significant role, with the US CPI data (released Wednesday) and the US retail sales data (to be released Thursday) expected to act as market-moving triggers. Ongoing Q3 earnings reports will further shape the global economic outlook.

Nifty Technical Outlook:

The Nifty 50 index closed with a gain of 37 points at 23,213. However, it faced resistance near its five-day exponential moving average around the 23,300 level. According to Nagaraj Shetti of HDFC Securities, the short-term trend for the Nifty remains weak. A breakout above the 23,300-23,350 levels could signal further strength for the index. On the downside, 23,050 remains a critical support level.

Om Mehra of SAMCO Securities highlights the potential for strong bullish momentum if the Nifty sustains trading above 23,320. He suggests that a pullback toward the Bollinger Band at 23,100 could present a buying opportunity, as long as 23,080 holds as support.

Rupak De of LKP Securities remains optimistic, forecasting a recovery in the short term, with the potential for the index to reach 23,400. He advises a buy-on-dips strategy, noting that sentiment will likely remain positive as long as the Nifty stays above the 23,000 level.

Key Levels for Nifty:

Resistance levels are at 23,340 and 23,500, while critical support is positioned at 23,047. A breach of this support could signal a bearish reversal.

Nifty Bank Outlook:

The Nifty Bank index closed at 48,751.70, with a modest gain of 0.05%. The formation of a Doji candlestick suggests indecisiveness in the market. However, the index is approaching the 9 EMA at 49,500, which could act as a resistance level. Early signs of recovery are visible on the daily RSI, indicating the potential for a momentum shift.

Mehra notes that the formation of a base around 48,500 indicates stability, which could support an upward move. A decisive break above 49,100 would signal further upside, while support is at 49,300. A breach of this level could negate the bullish outlook and trigger a downtrend.

In conclusion, the Nifty’s recovery could depend on the outcomes of earnings reports, with key resistance and support levels offering a roadmap for market direction.