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

Market benchmarks overcame bouts of volatility to close in the green for the second straight session on Tuesday buoyed by positive global sentiments and propped up by robust demand for banking, IT and pharma stocks amid a supportive trend overseas. The 30-share BSE Sensex rose 126 points to settle at 61,294.

At the close, Nifty ended above 18,200. Among sectoral indices, Nifty PSU Bank, Nifty Pharma and Nifty IT gained the most, while stocks from the metal, media and auto pack posted the maximum losses.

Here's how analysts read the market pulse:

"The Indian equity market has returned to green territory, with the Nifty closing above 18,155. The positions of the important moving averages and the momentum indicator RSI are suggesting positive trades in the near term. However, the current chart setup doesn't indicate any directional move. Over the short term, the index is likely to move within the range of 17,950-18,400. A breakout on either side will confirm a directional move,” Rupak De, Senior Technical Analyst at LKP Securities, said.

“Nifty rose for the second consecutive session on January 3 after recovering from pre-noon losses. At close Nifty was up 0.19% or 35.1 points at 18,232.6. Volumes on the NSE are yet to see a pick up. Advance decline ratio fell but was above 1:1 at 1.36:1. Non-bank financials had a field day on rotational buying,”said Deepak Jasani, Head of Retail Research, HDFC Securities.

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

US market
Wall Street's main indexes fell on the first trading day of the year following declines in Apple and energy stocks, with investors awaiting the Federal Reserve's meeting minutes for further clarity on the path of future interest rate hikes.

Most of the major S&P 500 sectors were in the red, with information technology stocks pulled lower by a 3% drop in the shares of iPhone maker Apple Inc following a report of a rating downgrade by Exane BNP Paribas. Tesla Inc fell nearly 10% as the electric-vehicle maker missed Wall Street estimates for quarterly deliveries.

Other rate-sensitive technology and growth stocks such as Alphabet Inc, Meta Platforms Inc, Microsoft and Amazon.com Inc were up between 0.6% and 2.0%. At 10:48 a.m. ET, the Dow Jones Industrial Average was down 24.82 points, or 0.07%, at 33,122.43, the S&P 500 was down 9.92 points, or 0.26%, at 3,829.58, and the Nasdaq Composite was down 58.43 points, or 0.56%, at 10,408.05.

European shares
European shares rose on Tuesday as investors awaited consumer prices data from the region's largest economy, Germany, while a jump in energy stocks lifted UK's FTSE 100 in its first trading day of the year.

The pan-regional STOXX 600 rose 1.6% in early trading, to its highest level in more than two weeks.

German consumer prices, harmonised to compare with other European Union countries, are expected to have risen by 10.7% on the year in December in the preliminary reading, compared to an 11.3% increase in November.

UK's FTSE 100, which has been closed since a shortened session on Friday, rose 2.1% on Tuesday to briefly touch its highest level since June 2022 supported by a jump in oil majors BP and Shell.

Tech View: Positive candle
A reasonable positive candle was formed on the daily chart, placed beside the similar candle pattern of the previous session.

After the downside breakout of important support of the ascending trend line at 18,100 on December 23, the market has failed to show any sharp follow-through selling action since then and the said broken support area is now acting as a hurdle. Nifty is continuously tagging that hurdle in the last 3-4 sessions, said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed positive trend on the counters of Yes Bank, South Indian Bank, IDFC First Bank, PFC and Jaiprakash Associates.

The MACD is known for signalling trend reversals in 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 Morepen Labs, Nectar Lifesciences, UTI AMC and KEC 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 terms
RIL (Rs 904 crore), Tata Steel (Rs 886 crore), Yes Bank (Rs 748 crore) and Mazagon Dock Shipbuilders (Rs 745 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
Yes Bank (Shares traded: 33.98 crore), Vodafone Idea (Shares traded: 10.88 crore), Suzlon Energy (Shares traded: 12.63 crore), and IRFC (Shares traded: 8.48 crore) were among the most traded stocks in the session on the NSE.

Stocks showing buying interest
Shares of Swan Energy, PFC, RBL Bank, Axis Bank and REC hit their 52-week highs, which signals bullish sentiment on the counter.

Stocks seeing selling pressure
Shares of Aavas Financiers hit their 52-week lows, which signals bearish sentiment on the counter.

Sentiment meter favours bulls
Overall, market breadth favoured bulls as 2,032 stocks ended in the green, while 1,491 settled with cuts.

(With inputs from PTI)

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