Ahead of Market: 10 things that will decide D-Street action on Friday
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Ahead of Market: 10 things that will decide D-Street action on Friday

Benchmark equity indices Sensex and Nifty closed lower on the Budget day on Thursday as investors resorted to profit-taking in capital goods, metal and realty shares amid no big announcements by Finance Minister Nirmala Sitharaman. After shedding early gains, the markets turned volatile during the presentation of the interim Budget, where in the capital expenditure outlay was marginally hiked but there were no major announcements.

The 30-share BSE Sensex settled lower by 106.81 points or 0.15 per cent at 71,645.30. During the day, it gyrated between a high of 72,151.02 and a low of 71,574.89.

The Nifty dipped 28.25 points or 0.13 per cent to 21,697.45. It oscillated between the day’s high of 21,832.95 and a low of 21,658.75.

Market sentiment was also dampened after the US Federal Reserve indicated it likely won’t cut interest rates in March.

Finance Minister Nirmala Sitharaman promised economic reforms to drive growth in her Budget speech, which was largely expected to avoid significant spending on new welfare programmes ahead of the election.

Here’s how analysts read the market pulse:
“Markets are not in a hurry for the next directional move and the recent price action reaffirms our view. Traders have no option but to align their positions accordingly and focus more on stock-specific trading approaches. Though we are seeing consistent outperformance from the broader indices despite the overbought condition, we feel it is prudent to restrict exposure and prefer only quality names,” said Ajit Mishra, SVP – Technical Research, Religare Broking.
Rupak De of LKP Securities, said, “The Nifty closed above the short-term 21EMA for three out of the last four days, suggesting resilience in the current bullish trend. This bullish momentum in the Nifty is likely to persist as long as the index remains above 21,500. On the higher end, a decisive move above 21,750 might set the Nifty up for a rally towards 22,100-22,200 in the short term.”
That said, here’s a look at what some key indicators are suggesting for Friday’s action:

US market
Wall Street rose on Thursday, after a selloff in the previous session as the US Federal Reserve dashed hopes for early interest rate cuts, with focus moving to Big Tech earnings due later in the day.

The S&P 500 and the tech-laden Nasdaq on Wednesday notched their biggest one-day percentage declines since September and October, respectively, while the Dow saw its steepest decline in six weeks.

Keeping interest rates unchanged on Wednesday, the Fed reminded markets of its undeterred focus on battling inflation and smashed speculations of policy easing kicking off in March. At 10:04 a.m. ET, the Dow Jones Industrial Average was up 50.64 points, or 0.13%, at 38,200.94, the S&P 500 was up 21.14 points, or 0.44%, at 4,866.79, and the Nasdaq Composite was up 112.80 points, or 0.74%, at 15,276.81.

European shares
European shares edged down on Thursday as losses in lenders eclipsed the gains in tech sector, while sentiment was dampened by the U.S. Federal Reserve’s signals that an early interest rate cut was unlikely.

The pan-European STOXX 600 index fell 0.1% as of 0932 GMT.

Tech View: Small bearish candle
Indicating that traders and investors are still looking for cues to make strong moves on either side, Nifty made a pattern of alternating between up and down days for the seventh consecutive day on Thursday to end 26 points lower and form a small bearish candle on Budget day.

“A breach below 21400 could lead prices towards recent lows of 21100, potentially triggering further decline. Conversely, surpassing 21850 may propel Nifty towards the 22000-22100 range. Given the recent irregularities, it is prudent for traders to focus on the intra-day trend to take a trade or wait for a breakthrough from the mentioned range before making bold moves,” said Rajesh Bhosale of Angel One.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on the counters of Motherson Sumi Wiring, Narayana Hrudayalaya, Bank of Baroda, Max Healthcare, Eicher Motors, and Can Fin Homes among others.

The MACD is known for signalling 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 an upward movement and vice versa.

Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of P&G Health, Jyothy Labs, Intellect Design, CE Info Systems, and Aurobindo Pharma among others. Bearish crossover on the MACD on these counters indicated that they had just begun their downward journey.

Most active stocks in value terms
HDFC Bank (Rs 2,395 crore), L&T (Rs 2,099 crore), Maruti Suzuki (Rs 1,973 crore), RIL (Rs 1,907 crore), SBI (Rs 1,714 crore), Adani Enterprises (Rs 1,482 crore), and ICICI Bank (Rs 1,339 crore) were among the most active stocks on NSE in value terms. Higher activity on a counter in value terms can help identify the counters with the highest trading turnovers in the day.

Most active stocks in volume terms
Tata Steel (Shares traded: 3.1 crore), Power Grid (Shares traded: 3 crore), ONGC (Shares traded: 3 crore), SBI (Shares traded: 2.6 crore), NTPC (Shares traded: 2.4 crore), ITC (Shares traded: 1.9 crore), and HDFC Bank (Shares traded: 1.6 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of Power Grid, NTPC, Adani Ports, Adani Enterprises, Bajaj Auto, Tata Motors, and Hero MotoCorp among others witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.

Stocks seeing selling pressure
Shares of Vedant Fashions, and UPL hit their 52-week lows, signalling bearish sentiment on the counters.

Sentiment meter favours bears
Overall, market breadth favoured bears as 2,081 stocks ended with cuts, while 1,744 names settled in the green.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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