Gift Nifty signals gap-down start; 8 stocks to watch on Friday

Indian equity benchmarks are likely to open lower on Friday, with Gift Nifty trading in the red, signalling a gap-down start for the session. The SGX Nifty, now referred to as Gift Nifty, pointed to a weak opening, tracking muted global cues and selling pressure in select heavyweights.

Traders are bracing for a volatile day as they navigate a mixed bag of domestic and international signals. The overnight performance of US markets, along with movements in Asian peers, is expected to set the tone for the day's trade.

What's behind the negative signal

Gift Nifty, the key indicator for Indian markets, was trading lower, suggesting that the Nifty 50 could open with a gap down. This comes after a choppy session on Thursday, where benchmark indices struggled to hold gains amid profit booking in banking and IT stocks.

Global factors, including concerns over interest rate trajectories and geopolitical tensions, continue to weigh on investor sentiment. Additionally, domestic inflationary pressures and quarterly earnings updates are keeping participants on edge.

Market analysts point out that the weakness in global equities, particularly in the US tech sector, has spilt over into Asian markets, adding to the bearish undertone for Indian bourses.

Eight stocks for day traders

Despite the anticipated weak start, a list of eight day-trading stocks has been compiled for Friday, focusing on counters that could see meaningful movement based on technical setups and recent price action. These stocks span sectors including pharmaceuticals, metals, and financials, offering potential opportunities for intraday traders.

• Stock 1: Expected to find support at its 20-day moving average, with resistance near its recent swing high.
• Stock 2: Showing a bullish flag pattern, with a breakout possible if volumes pick up.
• Stock 3: Oversold conditions could trigger a technical rebound during the session.
• Stock 4: High delivery-based buying in the previous session suggests accumulation.
• Stock 5: A classic head-and-shoulders bottom on the hourly chart points to upside.
• Stock 6: Strong relative strength versus the broader market, with momentum favouring longs.
• Stock 7: Consolidating near a breakout zone, a close above could spark fresh buying.
• Stock 8: Volatility is likely to increase ahead of its derivatives expiry next week.

Day traders are advised to exercise caution, as gap-down opens can lead to whipsaw moves. Sticking to strict stop-losses and avoiding overleveraging could help manage risk in such conditions.

Broader market outlook

The Nifty 50 and Sensex have been range-bound over the past few sessions, with investors awaiting fresh triggers. Foreign institutional investors have been net sellers in recent days, while domestic institutions have provided some support.

Key levels to watch include the 24,500 mark for the Nifty, which could act as immediate support, while resistance is placed around 24,800. A breach on either side could determine the trend for the near term.

Sectorally, auto and FMCG stocks may see some buying interest, while IT and banking are likely to remain under pressure. The rupee's movement against the dollar will also be tracked, as any sharp depreciation could impact foreign flows.

With no major domestic economic data slated for Friday, global cues, particularly the US jobs report due later in the day, will be crucial in shaping market direction.

What to watch next

Traders should keep an eye on the US non-farm payroll data, which could influence the Federal Reserve's rate decision. A strong print may strengthen the dollar, adding pressure on emerging markets like India. The coming sessions are likely to stay volatile, with stock-specific action driven by earnings and global developments.