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

The benchmark indices snapped its 4-day winning streak on Wednesday ahead of the Fed policy outcome. Nifty ended with a cut of over 62 points at 18,082 points. Broader markets, however, performed better.

Nagaraj Shetti, Technical Research Analyst, HDFC Securities, said, “After showing sharp upside momentum in the last couple of sessions, Nifty slipped into moderate weakness amidst range movement on Wednesday and closed the day lower by 62 points. After opening on a slightly positive note, the market shifted into a range bound action with weak bias. The gradual decline continued in the mid- to later part of the session and Nifty closed near the lows.”

Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services, said, Indian markets were flat on the back of mixed global cues and soon drifted into the red, witnessing profit booking at higher levels. Nifty lost 63 points but managed to close above 18k levels at 18,083. Global markets were trading on a mixed note in caution over the FOMC outcome. All eyes would be on the FED’s rate hike decision and commentary

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

US market
Wall Street's main indexes fell on Wednesday after data showed private payrolls rose more than expected in October, adding to worries that the US Federal Reserve will not have enough reason to tone down its aggressive rate hike policy.

With markets already expecting another 75-basis point rate hike later in the day, investors are keenly waiting for any hints from the central bank on smaller increases in December.

However, US private payrolls increased more than expected in October, the ADP National Employment report showed, offering further evidence that the Fed's rapid rate hikes have yet to significantly slow economic growth. At 10:21 am ET, the Dow Jones Industrial Average was down 140.27 points, or 0.43%, at 32,512.93, the S&P 500 was down 24.00 points, or 0.62%, at 3,832.10, and the Nasdaq Composite was down 74.98 points, or 0.69%, at 10,815.87.

Among other stocks, CVS Health Corp advanced 4.2% after raising its annual profit forecast, while Estee Lauder cut its full-year sales outlook, sending the cosmetics maker's shares down 7%. Tinder-owner Match Group rose 6.7% after reporting better-than-expected third-quarter revenue. Declining issues outnumbered advancers for a 2.86-to-1 ratio on the NYSE and a 1.94-to-1 ratio on the Nasdaq.


European shares
European shares opened higher on Wednesday on a boost from Danish drugmaker Novo Nordisk, while hopes grew that the US Federal Reserve would signal a slowdown in its aggressive policy tightening cycle later in the day.

The pan-European STOXX 600 index rose 0.3% by 0812 GMT, with Novo Nordisk jumping 4.5% as it raised its full-year earnings outlook on strong sales of diabetes treatment Ozempic and also reported a better-than-expected profit. European healthcare stocks gained 0.9%, while banks rose 0.4% ahead of what is expected to be the Fed's fourth straight 75-basis-point increase to interest rates.


Tech View: Bearish engulfing top pattern
Headline equity index Nifty formed a bearish engulfing top pattern on the daily scale and gave up its entire gains of the previous session. “Now, it has to hold above 18,000 zones, for an up move towards 18,200 then 18,350 zones whereas supports are placed at 17,888 and 17,777 zones,” said Chandan Taparia of Motilal Oswal Financial Services.

Indicators such as MACD and RSI were slightly skewed on the negative side. Analysts say the physiologically important level of 18,000 is now becoming a make-or-break zone for the index.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trend in the counters of Aster DM Health, Alok Industries, Solara Active, Vedanta and Finolex Industries and AU Small Finance 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 signalling weakness ahead
The MACD showed bearish signs on the counters of Avenue Supermarts, Whirlpool, Mahindra Holiday, Kansai Nerolac and Devyani International, among others. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value term
Piramal Pharma (Rs 116.49 crore), LIC Housing (Rs 6.183 crore), Westlife (Rs 54.32 crore), and HDFC Bank(Rs 52.87 crore) were among the most active stocks on the 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
Vodafone Idea (Shares traded: 1.41 crore), Suzlon Energy (Shares traded: 0.92 crore), JP Power (Shares traded: 1.29 crore), Piramal Pharma (Shares traded: 0.69 crore) and Yes Bank (Shares traded: 0.54 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of BLS International, Sun Pharma, Max Healthcare, Coal India and Bharat Forge, among others, witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure
No counter witnessed strong selling pressure and hit its 52-week lows, signaling bearish sentiment on the counters.

Sentiment meter favours bulls
Overall, market breadth favoured losers as 1,735 stocks ended in the green, while 1,726 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)