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

Estimated read time 17 min read
Domestic blue-chip indices saw their worst session in nearly three weeks on Wednesday, dragged down by losses in heavyweight financials and IT stocks. Uncertainty around Lok Sabha election results and the timing of US rate cuts also contributed to the decline.

The BSE Sensex declined by 667 points, or 0.89%, to settle at 74,503, while the NSE Nifty dropped by 183 points, or 0.80%, to end at 22,704.

Here’s how analysts the market pulse:

“Nifty is in the process of retracing the rise it has witnessed from 22,054 to 23111. The 38.2% Fibonacci retracement level is placed at 22707. We expect the Nifty to recover over the next few trading sessions. We believe that this is a minor degree correction and not a trend reversal,” said Jatin Gedia of Sharekhan.

Osho Krishan of Angel One, said, “Nifty has breached the neckline of the recent breakout and is now heading towards the mean of the ‘Rising channel’ at 22600, followed by the 20-day EMA at 22500, which is to be considered as the crucial support level. On the higher end, the bearish gap of 22825-22860 is to be seen as an intermediate hurdle, while the sturdy wall stays at the 23000 mark.”That said, here’s a look at what some key indicators are suggesting for Thursday’s action:

US market

Wall Street indexes retreated on Wednesday, as concerns around the timing and scale of the Federal Reserve’s interest rate cuts pushed Treasury yields higher and pressured stocks.

Megacaps Microsoft, Alphabet and Meta dipped between 0.3% and 0.6% as U.S. bond yields across the board rose to near four-week highs after Tuesday’s unexpectedly strong consumer confidence data.

The Dow led declines, falling to its lowest in nearly one month, and all major S&P 500 subsectors were in the red in early trading.

At 9:49 a.m. ET, the Dow Jones Industrial Average was down 372.81 points, or 0.96%, at 38,480.05, the S&P 500 was down 41.93 points, or 0.79%, at 5,264.11, and the Nasdaq Composite was down 121.39 points, or 0.71%, at 16,898.49.

European shares

European shares declined on Wednesday as worries that global interest rates will stay elevated for longer pushed bond yields higher, with fresh evidence of persistently high inflation in the region’s biggest economy only exacerbating such concerns.

The pan-European STOXX 600 index closed 1.1% lower, touching a three-week low, clocking its biggest single-day fall since April 16.

There were steep declines in all major bourses in the region, with France’s CAC 40 index and Italy’s FTSE MIB leading losses with a roughly 1.5% drop each.

Tech View: Dark cloud cover candlestick pattern

Nifty ended 183 points lower near the 22,700-level as the index formed a dark cloud cover candlestick pattern on the daily chart.

Support for Nifty is now seen at 22,675-700 and 22,500 levels. On the higher side, the immediate resistance zone is at 22,825-850 levels and the next psychological resistance is at the 23,000 mark, said Tejas Shah of JM Financial & BlinkX.

The maximum call open interest was placed at 23,000 strike while the maximum put open interest was placed at 22,500 strike.

Stocks showing bullish bias

Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on the counters of Coromandel International, Godrej Consumer Products, Voltas, and Jyoti CNC Automation among others.

The MACD is known for signaling 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 signaling weakness ahead

The MACD showed bearish signs on the counters of Honeywell Automation, Hitachi Energy India, Kirloskar Industries, Shakti Pumps, Escorts Kubota, and Info Edge among others. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value terms

HDFC Bank (Rs 2,654 crore), ICICI Bank (Rs 2,129 crore), Hindalco (Rs 1,588 crore), SBI (Rs 1,198 crore), Axis Bank (Rs 1,097 crore), Infosys (Rs 1,076 crore), and RIL (Rs 1,067 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 highest trading turnovers in the day.

Most active stocks in volume terms

Tata Steel (Shares traded: 3.6 crore), Hindalco (Shares traded: 2.2 crore), ICICI Bank (Shares traded: 1.9 crore), NTPC (Shares traded: 1.8 crore), HDFC Bank (Shares traded: 1.7 crore), Power Grid (Shares traded: 1.6 crore), and SBI (Shares traded: 1.4 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest

Shares of Titagarh Wagons, Mazagon Dock, Sumitomo Chemical, Grindwell Norton, EID Parry, Aditya Birla, Retail, and Saregama India among others witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure

Shares of KRBL and Anupam Rasayan hit their 52-week lows, signaling bearish sentiment on the counters.

Sentiment meter favours bears

Overall, market breadth favoured bears as 2,136 stocks ended in the red, while 1,680 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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