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

Even as the recent payroll data in the US hint at another rate hike by the Federal Reserve, Indian indices continued to rise for the seventh consecutive session on Tuesday. Nifty ended at 17,722. Sensex climbed 311 points, propelled by robust buying in metal, bank and financial stocks, and a firm trend in global equities. Continuous foreign capital inflows also helped.

Here's how analysts read the market pulse:

“The domestic equity indices showed resilience and remained in positive territory, primarily led by banking and auto stocks on the expectation of strong quarterly earnings following robust business updates. The forthcoming CPI inflation data due on Wednesday is expected to remain below the RBI’s upper tolerance level of 6%. Meanwhile, in the United States, inflation is projected to decline further from its current level of 6%. The US inflation figures, along with the FOMC meeting minutes, are likely to exert a dominant influence on the global market trend, ” said Vinod Nair, Head of Research at Geojit Financial Services.

“The underlying trend of the Nifty continues to be positive. Though, Nifty advancing gradually on the upside, its consistent upmove above the hurdles signaling more upside ahead. A decisive movement above 17800 levels is expected to open the next upside target of 18200 levels in the near term. Immediate support is at 17650 levels,” Nagaraj Shetti, Technical Research Analyst, HDFC Securities, said.

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

US market
The benchmark S&P 500 was little changed on Tuesday as investors stayed on the sidelines ahead of Wednesday's inflation data that could determine the U.S. Federal Reserve's next policy moves.

Losses in megacap stocks such as Microsoft Corp and Amazon.com Inc weighed on the tech-heavy Nasdaq, while gains in industrial stocks such as Caterpillar Inc boosted the Dow.

Hopes that the Fed will soon end its aggressive monetary policy tightening helped the S&P 500 stabilize so far in April after the collapse of two U.S. mid-sized lenders sparked a selloff last month. At 9:53 a.m. ET, the Dow Jones Industrial Average was up 64.63 points, or 0.19%, at 33,651.15, the S&P 500 was up 0.74 point, or 0.02%, at 4,109.85, and the Nasdaq Composite was down 31.87 points, or 0.26%, at 12,052.48.

European shares
European shares hit a one-month high on Tuesday, lifted by mining stocks, in an upbeat start to a week filled with economic data, including a closely-watched U.S. inflation report.

The pan-European STOXX 600 index ended 0.6% higher, extending gains for the second straight day. France's CAC 40 index closed up 0.9%, after hitting a record high.

Shares in miners rose 3.6%, logging their biggest one-day percentage gain in more than four months as a softer dollar helped drive gains in prices of base and precious metals.

Tech View: Small body of positive candle
A small body of positive candle was formed on the daily chart with upper and lower shadow. Technically, this pattern indicates a formation of high wave type candle pattern. Normally, such high wave formation after a reasonable upside indicates high volatility in the market and sometimes they act as a top reversal pattern post confirmation.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on the counters of Shipa Medicare, NTPC, Reliance Infrastructure, Dish TV India and Delhivery 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 signaling weakness ahead
The MACD showed bearish signs on the counters of Berger Paints, MCX, Siemens, Lumax Auto and Man Industries 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
HDFC Bank (Rs 3521 crore), ICICI Bank (Rs 3475 crore), Axis Bank (Rs 2033 crore), Kotak Bank (Rs 1710 crore) and SBI (Rs 1408 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
Tata Steel (Shares traded: 4.93crore), Suzlon Energy (Shares traded: 4.41 crore), Yes Bank (Shares traded: 4.3 crore), Zomato (Shares traded: 4.11 crore) and ICICI Bank (Shares traded: 3.95 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of Dalmia Bharat, Cyient, L&T, Glenmark Pharma and Siemens 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 United Breweries, Vikas Multicorp and SVP Global among others hit their 52-week lows, signaling bearish sentiment on the counters.

Sentiment meter favours bulls
Overall, market breadth favoured bulls as 2,244 stocks ended in the green, while 1,303 names settled with cuts.

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