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

Indian equity indices ended in the green on Tuesday amid mixed global cues. Sensex ended 563 points higher at 60,656, while Nifty recorded gains of 158 points and settled at 18,053. Meanwhile, broader markets underperformed the headline indices, and ended in the red.

Here's how analysts read the market pulse:

“Nifty witnessed a late surge, which helped it to close with gains of 158 points. More importantly, it has managed to close above the 20 day moving average (18,035) which is a sign of strength. The daily and hourly momentum indicator has a positive crossover which is a ‘buy’ signal. Thus, all parameters are suggesting a sharp up move over the next few trading sessions. In terms of levels 17,880 – 17,850 shall act as a crucial support zone while 18,280 – 18,300 shall act as an immediate hurdle zone for the Nifty,” said Jatin Gedia, Technical Research Analyst, Sharekhan by BNP Paribas.

"The domestic market is attempting to gain, in comparison to its weak YTD performance, which was caused in anticipation of a soft Q3 result & Union Budget. We started the third quarter results on a shaky note, but the latest set of financial announcements from IT and banking blue chips are encouraging.

“Given the positive undercurrents, the trend should continue in the short term. However, a lot will depend on the second line of Q3 results, the Budget outcome, and the Fed policy statement,”said Vinod Nair, Head of Research at Geojit Financial Services.

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

US market
Wall Street's main indexes slipped on Tuesday as Goldman Sachs missed quarterly profit estimates, worsening sentiment already dented by concerns of a slowdown in China's economic growth.

Goldman Sachs Group fell 3.5% after the bank reported a bigger-than-expected drop in quarterly profit, weighing the most on the Dow Jones Industrial Average.

Morgan Stanley jumped 4.4% as it beat analysts' estimates for fourth-quarter profit as its trading business got a boost from market volatility. At 9:42 am ET, the Dow Jones Industrial Average was down 147.35 points, or 0.43%, at 34,155.26, the S&P 500 was down 2.24 points, or 0.06%, at 3,996.85, and the Nasdaq Composite was down 24.64 points, or 0.22%, at 11,054.51.

European shares
European shares slipped on Tuesday, taking a breather from their sharp rally since the start of this year, after China posted its weakest annual economic growth in nearly half a century, stoking investors' fears of an economic slowdown.

The pan-European STOXX 600 was down 0.3% by 0925 GMT, after hitting its highest level in nine months in the previous session. Rate-sensitive tech stocks declined 0.8%, weighing on Europe's STOXX 600 in early trading.

The benchmark index still gained nearly 7% in an upbeat start to the year, spurred by hopes of a rebound in China's economy, easing of price pressures and growing expectations of a milder-than-expected recession.

Tech View: Bullish candle
A long bull candle was formed on the daily chart that engulfed the negative candle of the previous session. Technically, this pattern indicates chances of upside breakout of the sideways range movement of 18,100-17,800 levels in the short term.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on the counters of ITC, NTPC, IIFL Finance, Sterlite Technologies and Kotak Mahindra Bank.. 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 signaling weakness ahead
The MACD showed bearish signs on the counters of Bank of India, Bandhan Bank, Samvardhana Motherson, Can Fin Homes and PNB Housing Finance, 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
Adani Green (Rs 1,259 crore), RIL (Rs 1,224 crore), ICICI Bank (Rs 1,090 crore) and PNB (Rs 973 crore) and L&T (Rs 1,022 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
PNB (Shares traded: 11.67 crore), Yes Bank (Shares traded: 7.86 crore), Zomato (7.71 crore), Bank of India (7.04 crore) and IOB (Shares traded: 6.90 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of L&T Finance, Jindal Stainless and Mahindra CIE witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure
Shares of Nykaa, Indus Towers, Gland Pharma, Balaji Amines and Natco Pharma, among others, hit their 52-week lows on Tuesday, which signals bearish sentiment on the counter.

Sentiment meter favours bears
Overall, market breadth favoured bears as 1,791 stocks ended in the red while 1,708 names settled with gains.

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