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

Equity benchmarks closed on a positive note on Thursday, the second last trading day of 2022 and the day of F&O monthly expiry. Fag-end buying in telecom, banking and metal stocks pulled the indices in positive territory, recouping early losses. BSE Sensex climbed 223.60 points to settle at 61,133.88. The broader NSE Nifty gained 68.50 points to close at 18,191.

Here's how analysts read the market pulse:

“Nifty opened negative on fear of Covid spread to other countries post China relaxing its zero Covid policy, and remained in pressure for most part of the session. However, last hour buying especially in the banking space pulled Nifty in green with recovery of 200 points from its intraday low. The benchmark finally ended the monthly F&O expiry day with gains of 69 points at 18,191 levels. The broader market recovered and ended in the green. Sugar stocks extended their rally on expectation of increase in ethanol prices,” said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services.

“Nifty recovered smartly from the morning lows to end in the positive on Dec 29. Last hour trades for F&O monthly expiry squaring off/rollover and Nifty index weight rejig trades helped Nifty end 0.38% or 68.50 points higher at 18,191. Volumes in the NSE cash market were the lowest in 6 months for F&O expiry day. Broad market indices rose less than the Nifty as focus was on largecaps and advance decline ratio ended at 1.18:1,” said Deepak Jasani, Head of Retail Research, HDFC Securities.

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

US market:
Technology and growth stocks lifted Wall Street's main indexes higher on Thursday after data pointing to signs of a cooling labour market eased worries over future interest rate hikes by the US Federal Reserve.

Megacap stocks Apple Inc, Alphabet Inc, Microsoft and Amazon.com Inc gained between 1.5% and 3%, also helped by a decline in the 10-year Treasury yield.

All the major S&P 500 sectoral indexes rose, with consumer discretionary and information technology up 1.8% and 1.9%, respectively.

The U.S. Labor Department's report showed initial claims for unemployment benefits rose 9,000 to a seasonally adjusted 225,000 for the week ended December 24. Economists polled by Reuters had forecast 225,000 claims for the latest week.

At 9:56 a.m. ET, the Dow Jones Industrial Average was up 262.26 points, or 0.80%, at 33,137.97, the S&P 500 was up 46.52 points, or 1.23%, at 3,829.74, and the Nasdaq Composite was up 176.89 points, or 1.73%, at 10,390.18. Tesla shares rose 6.5% after Chief Executive Elon Musk told staff they should not be "bothered by stock market craziness". The stock is still down 66% for the year.

European shares
European stock indexes were mixed on Thursday as global recession fears weighed on markets and soaring Covid-19 cases in China countered earlier optimism about the country dropping its strict zero-Covid policy.

China's health system has been overwhelmed after the country reversed its lockdown and testing regimes earlier this month. The US, India, Italy, Japan and Taiwan said they would require COVID-19 tests for travellers from China. European stocks were mixed. The STOXX 600 was flat on the day, London's FTSE 100 was down 0.1% and Germany's DAX was up 0.2%.

Tech View: Bullish outside bar and engulfing bullish candle
Nifty has formed a bullish outside bar & an engulfing bull candle on the daily chart. On the way up, the index surpassed a falling trendline on the hourly chart and reached near the rising trendline, which was broken on the downside on Friday last week. It has also tested the 40 DEMA on the upside.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish signals on the counters of National Fertilizers, Federal Bank, Indiabulls Housing and RBL 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 Jindal Worldwide, Advani Hotel, V-Mart and Ami Organics, 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
SBI (Rs 1,224 crore), Axis Bank (Rs 1,135 crore), ICICI Bank (Rs 1,081 crore) and HDFC Bank (Rs 897 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: 25.85 crore), IOB (Shares traded: 13.79 crore), PNB (Shares traded: 13.02 crore), and Suzlon Energy (Shares traded: 9.04 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of Jindal Stainless, Adani Gas, RBL Bank, JSPL and Mahindra CIE, among others, hit their 52-week highs, which signals bullish sentiment on the counter.

Stocks seeing selling pressure
Shares of CE Info Systems, Gland Pharma, KFin Technologies and Brightcom Group record their 52-week lows, which signals bearish sentiment on the counter.

Sentiment meter favours bulls
Overall, market breadth favoured bulls as 1,785 stocks ended in the green, while 1,697 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)