In Wednesday’s trade setup, the market showed a straightforward upward movement, clearly signalling that the ongoing India-Pakistan conflict is not having much of an impact.
After the opening, the market experienced sharp selling, but it found support at the 1-hour moving average. From there, it rebounded, recovered all its losses, and closed near a positive gain of around 24,246. This level is close to the recent high, indicating strength and suggesting the potential for further upside.
Global Market Analysis
The U.S. GDP data for the April quarter came as a surprise, showing a contraction of nearly 0.3%, raising concerns amid the ongoing tariff war. The GDP was expected to grow by 0.2%, but instead, it declined by 0.3%. This negative data was reflected in the NASDAQ, which dropped by nearly 2.5%. However, there is potential for a rebound in the near term.
The U.S. GDP has contracted for the first time since 2022. In contrast, it had shown strong growth of around 5.2% in 2023. In the most recent quarter, GDP declined by 0.3%. Commenting on this, the Trump administration blamed the contraction on what they described as weak economic policies under President Biden. Trump also mentioned that they are proceeding with their scheduled tariff plans, which are set to kick in as announced.
Massive Investment by Big Corporations:
Former President Donald Trump announced on a social media platform that several of the U.S.’s largest companies are committing significant investments in the U.S. manufacturing sector. Some notable announcements include:
Apple: $500 billion
NVIDIA: $100 billion
A combined $500 billion from SoftBank, Oracle, and OpenAI
TSMC: $100 billion
Johnson & Johnson: $55 billion (expected)
Eli Lilly: $27 billion
DEMEC Properties: $20 billion
Strong Quarterly Earnings Fuel NASDAQ Rally
The NASDAQ continues to climb, driven by impressive quarterly earnings from major tech giants. Meta reported better-than-expected results, posting revenue of $42.3 billion compared to the estimated $41.3 billion. Similarly, Alphabet exceeded expectations with $90.2 billion in revenue, beating the forecast of $89.1 billion.
These strong performances are contributing to the upward momentum in the NASDAQ and are likely to support further gains in the near future.
Domestic Market Analysis for tomorrow trade setup
India-Pakistan Conflict
India is reportedly taking strategic steps in response to ongoing tensions with Pakistan. According to reports, India has deployed forces near the Line of Control (LoC) in Jammu and activated advanced radar systems to monitor Pakistani movements.
The Indian military has been granted full security control and operational freedom to address the situation. The same report indicates that Pakistan has been violating ceasefire agreements, with cross-border firing continuing for the seventh consecutive day. This escalation is increasing the likelihood of military action from India.
Such developments could have negative implications for India from a foreign institutional investor (FII) perspective, potentially leading to outflows. In contrast, the instability may present strategic and economic advantages for China in the region.
Record-Breaking GST Collections:
India has reported all-time high GST collections for the month of April, marking a significant economic milestone. The GST revenue rose by 12.6% year-on-year, reaching approximately ₹2.37 lakh crore. This surge indicates strong domestic demand and provides a positive signal for the overall health and momentum of the Indian economy.
Commodity market analysis
Gold has been attracting attention recently as it has dropped nearly 7.50% from its high. It reached a high of 99,358 and is currently trading around 92,225, showing a significant downward movement. It has come close to the lower range, starting from a weak low.”
Also read; Infosys business model
FII and DII Activity
FIIs are showing confidence in the Indian stock market, as they have been net buyers for the second consecutive month. However, the buying activity was narrow, with an injection of approximately ₹2,735.02 crore. Additionally, DIIs have bought around ₹28228.45 crore, indicating positive buying from both FIIs and DIIs.”
It is the second month that FIIs have become net buyers. The key point is that in the early weeks of April, FIIs were massive sellers in the Indian equity market. However, since then, they have continued buying, showing strong confidence despite the ongoing conflict between India and Pakistan.”
Option Chain Analysis
If we take a look at the option chain, we can see a muted response since the week has just started. The expiry is on the 8th of May. Looking closely, we see the 24,500 level, where there is call option writing with nearly 35,373 contracts. Additionally, at the 24,300 level, we observe support with 39,700 contracts, creating a range between 24,500 and 24,300.”
Nifty prediction
Nifty Fifty is forming a continuation-based pattern, but the ongoing conflict is creating caution. Additionally, FIIs are neglecting the risk in Indian equities, pushing the market higher while disregarding the ongoing conflict between India and Pakistan. As a result, the market formed an annotated hammer pattern on Tuesday. However, in Wednesday’s trade setup, this was rejected, resulting in a Doji candlestick pattern.”
Now, all attention will be on the next Nifty 50 level, which is around 24,334. The market has attempted to cross this level twice, but it hasn’t closed above it. Therefore, all focus will be on Monday’s and Friday’s trade setups to see whether Nifty will close above the 24,334 level or not.”
Conclusion
The market is in a bullish mode, supported by positive global cues, and both FIIs and DIIs are contributing positively to the volume in Nifty 50. It has been a consolidation period for the past 6 months. Looking at the current situation, the market is largely driven by the banking sector, which has contributed the most, while the IT sector has not made a significant contribution.
However, if the US market rises, it will likely have a positive impact on the IT sector, which will in turn contribute to Nifty 50’s performance. This contribution could play a key role in pushing the market higher. From now on, it’s challenging to see Nifty 50 rise much further due to the heavy influence of banks, and this will likely be reflected in the upcoming trade setups.
2 thoughts on “Trade setup for 02 May; US GDP contract, big tech investment announce in USA, 2.37 lakh crore GST”