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

Equity benchmarks ended lower for the second straight session on Thursday, dragged down by banking and finance counters and continuous foreign fund outflows. The 30-share BSE Sensex ended 304 points lower at 60,353.27. Nifty slipped below 18,000 levels. Meanwhile, sector-wise, mixed performance was reported with Nifty FMCG posting maximum gains, while Nifty Financial Services slipped the most.

Here's how analysts read the market pulse:

“Domestic equities struggled to maintain the 18k zone after minutes from the mid-December meeting showed that US Fed officials agreed to slow the pace of rate hikes but continued to maintain hawkish views until inflation came within control. Nifty opened positive but drifted below 18,000 levels and went into negative territory,” Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services, said.

“After showing sharp weakness on Wednesday, Nifty continued with follow-through negative action on Thursday and closed the day lower by 50 points. After opening on a positive note, the market failed to sustain the opening gains and slipped into weakness for the better part of the session. Sustainable upside recovery has emerged from the day’s low of 17,892 in the mid part and Nifty closed the day off the lows,” Nagaraj Shetti, Technical Research Analyst, HDFC Securities, said.

That said, here’s a look at what some key indicators are suggesting for Friday's action:

US market
Wall Street's main indexes fell sharply on Thursday as fresh evidence of a tight labor market and hawkish comments from policymakers deepened fears of elevated interest rates for longer than expected.

Most big technology and other growth stocks like Alphabet Inc and Microsoft Corp fell more than 1% as U.S. Treasury yields surged on prolonged rate-hike expectations.

Tesla Inc dropped over 5% after the December sales of its China-made electric vehicles fell to a five-month low, while Amazon.com Inc, which announced increased layoff plans, reversed premarket gains.

On the benchmark S&P 500 index, rate-sensitive real estate stocks led the losses with a 2.2% drop, while financials slipped 1%. At 9:49 am ET, the Dow Jones Industrial Average was down 409.07 points, or 1.23%, at 32,860.70, the S&P 500 was down 46.53 points, or 1.21%, at 3,806.44, and the Nasdaq Composite was down 148.62 points, or 1.42%, at 10,310.14.

European shares
European shares slipped on Thursday ahead of euro zone inflation data, after minutes from the Federal Reserve's December meeting showed the central bank was committed to tame inflation.

The pan-European STOXX slipped 0.3% by 0810 GMT, after gaining more than 3% in its first three sessions of 2023. Minutes on Wednesday from the Fed's December policy meeting showed officials were worried about "misperception" in financial markets that their commitment to fighting inflation was flagging, though they agreed the central bank should slow the pace of its monetary policy tightening.

Tech View: Negative candle
A reasonable negative candle was formed on the daily chart with a long lower shadow. Technically this pattern indicates downside continuation pattern amidst volatility. The upside recovery of Thursday signals that buying is expected to emerge from near the lower support of around 17750-17800 levels.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish bias on the counters of Hindustan Construction Company, Engineers India, NTPC, Apollo Tyres and Bandhan Bank 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 Hindalco, Rana Sugars, Axis Bank and Sterlite Technologies 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
Bajaj Finance (Rs 3,131 crore), RIL (Rs 1,584 crore), Infosys (Rs 1,462 crore) and ICICI Bank (Rs 1,461 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
Yes Bank (Shares traded: 20.71 crore), Suzlon Energy (Shares traded: 14.28 crore), and Vodafone Idea (Shares traded: 9.75 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of Apollo Tyres, Sundaram Fasteners, Apar Industries, PFC and REC hit their 52-week highs, which signals bullish sentiment on the counter.

Stocks seeing selling pressure
Shares of Balaji Amines, Aavas Financiers and Galaxy Surfactants among others hit their 52-week lows, which signals bearish sentiment on the counter.

Sentiment meter favours bears
Overall, market breadth favoured bears as 1,618 stocks ended in the green, while 1,861 names settled with cuts.

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