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

NEW DELHI: Benchmark indices closed at nearly two-month lows on Monday, mirroring the weakness in global markets. Nifty50 plunged by over 300 points to settle at 17,016 points, whereas Sensex fell by over 950 points to end at 57,145. Sectorally, barring Nifty IT, all the indices ended with deep cuts.

Here's how analysts read the market pulse:

Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services. said: “the domestic equities have corrected by more than 4% over the last four trading sessions as global uncertainties dominate market sentiments. A short bounce or reversal can be seen following this intense selling. However, the overall narrative of the market remains weak, especially following the cautiousness ahead of the RBI MPC due later this week”.

Nagaraj Shetti, Technical Research Analyst, HDFC Securities, said, “the steep weakness continued in the market for the second consecutive session on Monday, and Nifty closed the day lower by 311 points. The short-term trend of the Nifty is sharply down, and the weakness is expected to continue for the next 1-2 sessions. The lower support area of 16,800 is expected to offer a base for the market in the short term”.

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

US stocks open mixed
Wall Street stocks were mixed early Monday amid unease over recent equity losses and upheaval in the foreign exchange market that has lifted the dollar to historic highs. About 15 minutes into trading, the Dow Jones Industrial Average was down 0.5 percent at 29,455.46.

The broad-based S&P 500 slipped 0.1 percent to 3,690.64, while the tech-rich Nasdaq Composite Index advanced 0.6 percent to 10,936.43.

European markets choppy
Europe's STOXX 600 index slipped for the third straight session on Monday on worries about an economic downturn, although Italian shares outperformed after the right-wing coalition led by Georgia Meloni looked set to win the country's general election.

The pan-European Stoxx 600 was down 0.3% by mid-afternoon, having earlier fallen more than 0.8%

Tech View: Long bear candle
On the daily chart, a long bear candle was established. Technically, this market is suggestive of a sharp down-trended movement in the market. Though Nifty declined sharply by around 10,00 points from the highs of 18000, there is no confirmation of any buying emerging from the lows.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed a bullish trade setup on the counters of Mphasis, Dr Lal Pathlabs, Hester Biosciences, Kiri Industries and Avro India.

The MACD is known for signalling 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 ITC, NMDC, Karur Vysya Bank, Indian Hotels, SJVN, IndusInd Bank and Kalyan Jewellers.

A bearish crossover on the MACD on these counters indicated that they had just begun their downward journey.

Most active stocks in value terms
Power Grid (Rs 2,469 crore), RIL (Rs 1,378 crore), Bajaj Finance (Rs 1,372 crore), Tata Motors (Rs 1,331 crore), and Infosys (Rs 1,299 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 the highest trading turnovers in the day.

Most active stocks in volume terms
Suzlon Energy (Shares traded: 15.99 crore), Vodafone Idea (Shares traded: 13.42 crore), Power Grid (Shares traded: 12.57 crore), Tata Steel (Shares traded: 10.13 crore) and YES Bank (Shares traded: 9.81 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of Westlife Development witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.

Stocks seeing selling pressure
Shares of Piramal Enterprises, Glenmark Life, Muthoot Finance, Graphite India and SIS India were among those that witnessed strong selling pressure and hit their 52-week lows, signalling bearish sentiment on the counters.

Sentiment meter favours bears
Overall, market breadth favoured losers as 2,980 stocks ended in the red, while 611 names advanced.

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