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

After the indices hit new 52-week highs in the previous session, Nifty ended a tad lower at 18,329 points.

Broader markets, however, did well and ended higher by a margin.

Here's how analysts read the market pulse:

Vinod Nair, Head of Research at Geojit Financial Services, said “Although there were favourable domestic indicators, the market was under pressure due to weakness in the US and other Asian markets.” “India’s wholesale inflation dropped below forecasts, aided by a slowdown in the prices of manufactured goods and fuel & electricity. The domestic CPI, which is anticipated to continue the trend, will boost confidence in the Indian market as it will lessen the risk indicators for the RBI to maintain its hawkish stance,” Nair added.

Rupak De, Senior Technical Analyst at LKP Securities, said, “Nifty remained sideways during the session as it failed to give any directional breakout. On the daily chart, the index has sustained above the 50 EMA (17,619), which confirms the positive trend. The momentum indicator is in positive crossover and rising. The trend for the short term looks positive. On the higher end, resistance is visible at 18,450-18,500. On the lower end, support is visible at 18250.”

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

US market
Wall Street's main indexes slipped on Monday, with the tech-heavy Nasdaq down about 1%, as hawkish comments from a US Federal Reserve official tempered hopes of the central bank toning down its aggressive monetary policy approach.

Federal Reserve Governor Christopher Waller, a voting member of the rate-setting committee this year, said on Sunday that markets should now pay attention to the “endpoint” of rate increases, not the pace of each move, and that the endpoint was likely “a ways off”.

The S&P 500 in the previous session logged its biggest weekly percentage gain in about five months, while the tech-heavy Nasdaq notched its best week since March.

At 9:42 am ET, the S&P 500 was down 17.25 points, or 0.43%, at 3,975.68, and the Nasdaq Composite was down 115.13 points, or 1.02%, at 11,208.20. The Dow Jones Industrial Average was down 7.84 points, or 0.02%, at 33,740.02. Gains in drugmakers, including Johnson & Johnson and Amgen limited, declines on the blue-chip index.

As US Treasury yields edged up, technology and growth names such as Microsoft Corp, Apple Inc and Amazon.com Inc slipped between 1% and 3%.

The S&P 500 information technology sector was down 1.2% and among the leading sectoral decliners on the benchmark index.

Tesla Inc fell 3.4% as Chief Executive Elon Musk said, “I have too much work on my plate,” when asked about his recent acquisition of Twitter and his leadership of the electric-vehicle maker.

European shares
Shares steadied and bond yields remained close to multi-year highs on Monday after US and European central bankers encouraged caution as they battled to curb inflation via rate hikes, without throttling growth.

Dovish comments from European Central Bank policymaker Fabio Panetta saw European bond yields ease, but short-dated rates remained within striking distance of multi-year highs.

Panetta said the ECB needs to avoid over tightening as that could destroy productive capacity and deepen a recession.
Germany's 2-year government bond yield, more sensitive than other maturities to policy rate changes, was down 4 basis points (bps) at 2.09% after hitting its highest since December 2008 at 2.252% last week.
The benchmark European STOXX index rose 0.26%, and MSCI's broadest index of Asia-Pacific shares outside Japan added 0.6%, after jumping 7.7% last week.

Tech View: Bearish candle
On the daily charts, Nifty established a bearish candle, indicating indecisiveness between the bulls and bears.

The index has been forming higher highs - higher lows for the last two sessions. “Now, it has to hold above 18,300 zones, for an up move towards 18,500 then 18,600 zones whereas supports are placed at 18,188 and 18,088 zones,” said Chandan Taparia of Motilal Oswal.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed a bullish trend in the counters of NMDC, Tech Mahindra, Dredging Corporation, BSE and Sakthi Sugars, 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 signalling weakness ahead
The MACD showed bearish signs on the counters of BHEL, ITC, NHPC, Bharat Electronics and Bharti Airtel, 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 1,549 crore), Hindalco (Rs 1,360 crore) and Zomato (Rs 1,331 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: 19.58 crore), Zomato (Shares traded: 18.67 crore), Vodafone Idea (Shares traded: 9.85 crore), BHEL (Shares traded: 7.69 crore) and RVNL (Shares traded: 5.71 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of KIMS, Hindustan Foods, RVNL, KRBL and AIA Engineering, 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 Trident, Natco Pharma, Quess Corp, Godrej Industries and Divis Labs, among others, witnessed strong selling pressure and hit its 52-week lows, signaling bearish sentiment on the counters.

Sentiment meter favours bears
Overall, market breadth favoured losers as 1,668 stocks ended in the green, while 1,948 names ended in the red.

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