The focus will be back on the Nifty 50 ahead of the weekly options expiry session after the US Federal Reserve played its cards on expected lines.

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Benchmark interest rates in the US were hiked for the 10th time overnight. Fed Chair Jerome Powell indicated a potential halt to the hiking cycle after the latest 25 basis points hike.

However, the central bank chief ruled out any potential cut in rates in the near future as he does not expect inflation to come down quickly enough. That comment disappointed Wall Street, with the indices ending lower for the third straight day.

Back in India, the market remained in wait-and-watch mode on Wednesday ahead of the Fed decision but saw mild profit booking at higher levels. The Sensex and Nifty 50 snapped a six-day winning streak.

The Nifty 50 index has not had a single move of one percent or more on either side since March 31.

Along with the weekly options expiry, the market will also react to earnings from Titan, which were largely in-line with expectations, but missed margin estimates by 80 basis points.

It is another earnings-heavy day today as Nifty 50 constituents like Hero Moto, HDFC and Adani Enterprises will be reporting results today, alongside broader market names like Dabur, Tata Power, TVS Motor and United Breweries.

"Relative to other markets, and relative to our own past fundamentals, I think India has done pretty good, the macro numbers are very strong," Jitendra Gohil of Credit Suisse said.

"We are very convinced that earnings growth will be led by banks, and also some of the consumption companies, which are commodity consumers. So we are not very much negative in terms of the downward surprise in the earnings perspective. We think there could be some correction, but it won't be that material," he said.

What do the charts suggest for Dalal Street?

Sameet Chavan of Angel One highlights 18,150, 18,200 and 18,260 as the immediate levels to watch out for on the Nifty 50 index. He maintains that crossing the 18,200 mark will be challenging for the bulls and any form of profit booking may take the index back towards 18,000 - 17,950 levels. "The overall trend remains strongly bullish and hence, we would continue with our buy-on-declines strategy in the near term," he said.

Nagaraj Shetti of HDFC Securities believes that the minor decline on Wednesday is indicative of the lack of sharp selling participation in the market. He expects further consolidation or minor weakness for the next 1-2 sessions before the Nifty 50 index rebounds from the lows. Immediate support is seen at 17,900.

The Nifty Bank remains in the 43,000 - 43,500 range, said Rupak De of LKP Securities as he waits for a move in either direction to determine a trend. Immediate support is seen at 43,150, while a move above 43,500 may push the index higher towards 44,000, according to De.

Here are key things to know about the market ahead of the trading session on May 04:

SGX Nifty

On Thursday, Singapore Exchange (SGX) Nifty futures — an early indicator of the Nifty 50 index — declined 45 points or 0.25 percent to 18,115, thereby indicating a subdued start to the trading session.

Global Markets

The Dow Jones ended 270 points lower overnight, while the S&P 500 dropped 0.7 percent. The Nasdaq managed to hold on to the 12,000 level, ending 0.5 percent lower.

With the Fed commentary out of the way, the market will now await earnings and commentary from Apple, which will report result after market hours on Thursday.

What to expect on Dalal Street

Ruchit Jain of 5paisa.com also advises traders to use a buy-on-dips approach until signs of reversal are visible. He expects 18,000 to be a key support for the Nifty 50 on today's weekly options expiry day. "The chart structure indicates just a correction within an uptrend in the index. Hence, one can look for buying opportunities in the index on declines towards the support zone, Jain said, adding that stock-specific outperformance in the cash market may continue.

Open Interest data on the Nifty 50 is suggesting sideways action for now, said Rohan Patil of SAMCO Securities. He sees 18,100 and 18,200 as major hurdles for the index, while 18,000 - 17,950 will be an important support zone. In case the index falls below 17,950, the next support level falls at 17,800. "Oscillators in a lower time frame have reached the overbought zone and a profit booking at the current level cannot be ruled out," he said.

The sentiment remains positive as the Nifty 50 has sustained above 18,000, said LKP's De. "Over the short term, the index is likely to remain in the range of 18,000 and 18,200. A decisive move above 18,200, may take the index towards 18,500," he said.

Key Levels To Track

For today's weekly options expiry, the 18,250 strike call of the Nifty 50 index has added 33 lakh shares in Open Interest, followed by the 18,200 call, which added nearly 31 lakh shares. The 18,100 call also added 27.75 lakh shares in Open Interest.

The 18,150 put option saw Open Interest shedding of 17.5 lakh shares, while the 18,200 put saw shedding of 12.6 lakh shares. The 17,950 put and 18,000 put added 10.9 lakh and 10.7 lakh shares in Open Interest.

Nifty 50's put-call ratio is now at 1.02 from 1.15 on Tuesday. Manappuram Finance is now in the F&O ban after Wednesday's fall.

FII/DII activity

FIIs continued to buy in the cash market while domestic investors were sellers on Wednesday.

Let us take a look at what Open Interest data is suggesting within specific stocks:

Fresh Longs (Increase In Price and Open Interest)

Fresh Shorts (Decrease In Price and Increase In Open Interest)

First Published:May 4, 2023 5:08 AM IST