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

After US-based short seller Hindenburg triggered a controversy over Adani Group’s debt position with its contentious report, equity benchmarks tumbled sharply on Wednesday. Nifty ended below 17,900, down 226 points or 1.25%, while Sensex fell 774 points or 1.27% to end at 60,205. Broader markets fell even more sharply on the monthly F&O expiry day.

Here's how analysts read the market pulse:

“Nifty seems to have given a fresh breakdown. The 17,761-17,774 band is the immediate support for Nifty below which the downtrend could accelerate. On up moves, 18,145 could prove to be a resistance,” said Deepak Jasani, Retail Research Head- HDFC Securities.

“Bears remained at the helm as benchmark index Nifty shed more than 200 points on Wednesday. On the daily timeframe, the index remained below the 50-day exponential moving average that confirms the bearish trend. On the lower end, however, the correction was limited to the upper band of the falling wedge pattern on the daily chart.

“The sentiment looks very weak, with the RSI in a bearish crossover. However, a further correction may occur if the price falls below 17,840. On the higher end, resistance is placed at 18,000,” said Rupak De, Senior Technical Analyst at LKP Securities.

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

US market
US stock indexes rose on Thursday after data showing a resilient labour market and better-than-expected economic growth last quarter helped ease worries of a deep recession, while Tesla's bullish outlook boosted the tech-heavy Nasdaq.

A report from the Labor Department showed initial claims for state unemployment benefits dropped for the week ended January 21, while the Commerce Department said gross domestic product (GDP) expanded at an annualised rate of 2.9% in the fourth quarter, above expectations of a 2.6% rise.

At 9:49 am ET, the Dow Jones Industrial Average was up 58.37 points, or 0.17%, at 33,802.21, the S&P 500 was up 21.49 points, or 0.54%, at 4,037.71, and the Nasdaq Composite was up 131.26 points, or 1.16%, at 11,444.62.

Keeping a lid on gains for Dow was chemical firm Dow Inc that fell 1.6% after missing Wall Street estimates for quarterly profit, and a 3.4% drop in IBM Corp after it missed annual cash flow targets.

European shares
European shares gained on Thursday as upbeat quarterly results from STMicroelectronics, Sabadell and Nokia eased worries over the corporate earnings season amid signs of a recession. The pan-European STOXX 600 rose 0.6% at 0835 GMT, with technology and financial services stocks leading gains.

STMicroelectronics jumped 8.4% after the chipmaker reported bigger-than-expected fourth-quarter sales.

Tech View: Long bearish candle
While closing below the 18,000 mark, headline index Nifty on Wednesday formed a long bearish candle on the daily charts. It has been trading in a broader range of 17,777 to 18,250 for the last 20 trading sessions.

Stocks showing bullish bias
On Wednesday, momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on the counters of Bharti Airtel, TVS Motor, PVR, HUL and Sharda Cropchem, among others.

The MACD is known for signaling 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 signaling weakness ahead
The MACD showed bearish signs on the counters of Tata Steel, IDFC, Orient Paper, Infibeam Avenues and Anant Raj 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
Ambuja Cements (Rs 1,557 crore), SBI (Rs 1,475 crore), RIL (Rs 1,367 crore) and ICICI Bank (Rs 1,279 crore) were among the most active stocks on the NSE in value terms on Wednesday. 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
Zomato (Shares traded: 23.7 crore), Yes Bank (Shares traded: 16.9 crore), Vodafone Idea (Shares traded: 10.4 crore), PNB (Shares traded: 8.3 crore) and Suzlon Energy (Shares traded: 4.7 crore) were among the most traded stocks in the session on the NSE on Wednesday.

Stocks showing buying interest
Shares of Bikaji Foods and Bombay Super Hybrid Seeds witnessed strong buying interest from market participants on Wednesday as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure
Shares of Indus Towers, Aurobindo Pharma, Biocon, Indigo Paints, Laurus Labs and Vodafone Idea among others hit their 52-week lows on Wednesday, signaling bearish sentiment on the counters.

Sentiment meter favours bears
Overall, market breadth favoured bears on Wednesday as 2,396 stocks ended in the red while 1,120 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)