Ahead of Market: 10 things that will decide D-Street action on Wednesday
Nifty ended below 19,700 levels after approaching 20,000 levels last week. Sector-wise, the PSU Bank pack emerged as the biggest laggard. In the Nifty pack, the top gainers in a range bound trade were stocks like Hindalco, Tata Steel, JSW Steel And UltraTech Cement.
Here is how analysts read the pulse of the market:
“Indian indices hovered along the flatline, awaiting the crucial Fed policy decision. Metals inventories rose on China’s commitment to provide policy support to its real estate sector, while utilities rose in anticipation of demand and an improving operating margin. The recent correction in the domestic market can be attributed to several factors, including a lackluster start to first quarter results, a reversal in FII activity, a rising dollar index and an increase in crude oil prices,” Vinod Nair, head of research at Geojit Financial Servicessaid.
“Nifty’s short-term move is choppy. After placing at the support, there is a possibility of a short-term bullish bounce towards the immediate resistance of the 19800-19850 levels in the coming sessions. The next support is placed at the 19600 levels,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.
That said, here’s a look at what some key indicators suggest for Wednesday’s action:
American market
The tech-heavy Nasdaq and S&P 500 edged higher on Tuesday amid choppy trading as investors braced for quarterly earnings reports from megacap tech companies Alphabet and Microsoft, and a rate hike by the Federal Reserve. With the central bank on track for another 25 basis point interest rate hike on Wednesday, policymakers face a choice about how much weight to give recent economic data.
As of 9:49 a.m. ET, the Dow Jones Industrial Average was down 12.33 points, or 0.03%, at 35,398.91, the S&P 500 was up 6.07 points, or 0.13%, at 4,560.71, and the Nasdaq Composite was up 72.63 points, or 0.52%, at 14,131.4 9.
After posting its longest winning streak in more than six years on Monday, the Dow fell slightly in early trading, weighed down by a 1.7% decline in Boeing.
Four of the S&P 500’s 11 major sectors advanced in early trading, led by a 1.3% gain in materials stocks following higher metal prices as investors cheered pledges of support during the reading of a Politburo meeting in China.
European stocks
European stocks edged higher on Tuesday with miners and luxury stocks leading after China pledged more support to its slowing economy, but mixed earnings reports limited markets’ upside.
The pan-European STOXX 600 index rose 0.2% after Asian stocks rallied on signs of stimulus in China that would focus on boosting domestic demand.
Technical view: small negative candle
A small negative candle has formed on the daily chart with a minor lower shadow. Tuesday’s candle pattern formed alongside the similar candle from the previous session. Technically, this pattern indicates choppy movement in the market with a low bias. Nifty is currently showing signs of waning bearish momentum and is placed at 10-day EMA support around the 19650 levels.
Stocks Showing a Bullish Bias
Momentum Indicator Moving Average Convergence Divergence (MACD) showed a bullish trade on the counters of JSPL, TVS Motor, Bandhan Bank, Ambuja cements and PFC among others.
The MACD is known to signal trend reversals in traded securities or indices. When the MACD crosses above the signal line, it gives a bullish signal, indicating that the price of the security may see upward movement and vice versa.
Stocks Signal Weakness Ahead
The MACD showed bearish signs on the counters of Suzlon EnergyYES Bank, PNB, ITC and Dish TV India among others.
A bearish crossover on the MACD on these counters indicated that they had just begun their downward journey.
Most active stocks by value
HDFC Bank (Rs 4737 crore), ICICI Bank (Rs 2910 crore), RIL (Rs 1499 crore) and ITC (Rs 2002 crore) and Kotak Bank (Rs 1,493 crore) were among the most active shares on NSE in terms of value. Higher activity on a counter in terms of value can help identify counters with the highest turnover for the day.
Most active stocks by volume
Suzlon Energy (shares traded: 27.65 crore), YES Bank (shares traded: 11.25 crore), SJVN (shares traded: 12.26 crore) and Tata Steel (shares traded: 8.80 crore) were among the most traded stocks during the session on NSE.
Stocks showing buying interest
Shares of Jyothy Laboratories, Chariots of TitagarhThermax, Ajanta Pharma and TVS Motor, among others, witnessed strong buying interest from market participants as they hit new 52-week highs, signaling bullish sentiment.
Stocks are under selling pressure
Shares of Campus SportswearUPL and SRF, among others, hit their 52-week lows, signaling bearish sentiment on the meters.
Sentiment meter favors bears
Overall, the breadth of the market favored the bears as 1,672 stocks ended in the green, while 1,877 names settled in the red.
(Disclaimer: The recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
