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

Equity benchmark indices ended the trade in the positive territory on Wednesday, with the BSE Sensex closing at its fresh life-time high of 61,981, helped by buying in banking counters. After facing highs and lows during the day, the 30-share BSE Sensex finally ended 107.73 points or 0.17% higher at 61,980.72. The broader NSE Nifty ended marginally higher by 6.25 points or 0.03% to 18,409.65.

Here's how analysts read the market pulse:

Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services said, “Global markets remained cautious amid geopolitical uncertainty and UK inflation soaring to 41-year high to 11.1%. Domestically, Nifty opened flat and traded between gains and losses to finally closed flat – up just 6 points at 18,410 levels. Profit booking was seen in Adani group stocks after it rallied ~20-30% in the last few sessions.”

Rupak De, Senior Technical Analyst at LKP Securities, said, “The Nifty has been consolidating for the last few days after a swing high breakout on the daily timeframe. However, no classic reversal pattern has formed. The short term moving average is sitting well below the current index value, suggesting an ongoing uptrend. The trend looks positive till it holds above 18,250 levels. On the higher end, immediate resistance is visible at 18,440-18,450; above 18,450 the Nifty is expected to move towards 18,600-18,650.”

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

US market
US stocks dropped after strong retail sales recast bets that the Federal Reserve’s policy tightening regime is nearing an end.
The S&P 500 and the Nasdaq 100 fell after a report showed retail sales posted the biggest increase in eight months in October, outpacing estimates.
The market pullback comes after a hefty rally fuelled by softer-than-expected US inflation data that fanned expectations the Fed may be able to slow its tempo of interest-rate hikes. That alongside news of China’s post-Covid reopening had pushed the dollar and Treasury yields lower in recent days.

European shares
European shares fell on Wednesday, with Mercedes Benz Group leading losses in automobiles stocks, while a blast in Poland kept sentiment subdued and pushed up defence stocks.

The pan-European STOXX 600 index fell 0.4% by 0924 GMT.

Auto stocks tumbled 2.8% to lead sectoral declines, and were headed for their biggest one-day percentage fall in almost seven weeks.

The STOXX 600 has dropped more than 11% so far this year and though that is less than the S&P 500 index's 16% decline, market players remain wary of investing in Europe.

Tech View: Small bodied bullish candle
Nifty formed a small bodied bullish candle on the daily frame with a longer lower shadow, indicating support-based buying. It has been forming higher highs from the last four sessions. “Now, it has to hold above 18,350 zones, for an up move towards 18,500 then 18,600 zones whereas supports are placed at 18,250 and 18,188 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 Castrol India, HAL, PCBL, KEC International and Som Distilleries 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 Indiabulls Housing, GMR Airports, Delta Corp and HFCL 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
Global Health (Rs 2,007 crore), HAL (Rs 1,314 crore), Kotak Bank (Rs 1,253 crore) and Adani Enterprises ( Rs 1,218 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
IRFC( Shares traded: 19.16 crore), Yes Bank (Shares traded: 10.65 crore), RVNL (Shares traded: 10.62 crore) and HUDCO (Shares traded: 10.55 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of HUDCO, IRFC, HAL and RVNL, 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 Piramal Pharma, Max Financial, Relaxo, Sona BLW and Voltas, 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 1,387 stocks ended in the green, while 2,150 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)