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

Domestic indices ended lower for the second consecutive session on Thursday, while the rupee closed at a record low after the US Federal Reserve raised interest rates and signalled further hikes ahead.

While the Sensex ended 337 points lower, the Nifty declined 0.5% to end the weekly expiry day above 17,600, while broader markets outperformed the headline indices.

Here's how analysts read the market pulse:

Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services, said: “Indian markets again showed resilience in the face of global weakness after the US Fed sounded more hawkish in its future action. Nifty opened a gap down but attempted to recover twice during the day, to finally close with a loss of 86 points at 17,630”.

Amit Trivedi, CMT, Technical Analyst - Institutional Equities, Yes Securities, said: “Since past four sessions, Nifty’s range has been confined within the high/low range of large bearish (i.e. 17,820-17,497) candle, formed on 16th September; inability to sustain above 17,820 stalled upside momentum, while on the slip side levels of 17,500 acting as immediate floor.”

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

Wall Street opens lower
Wall Street stocks fell early Thursday, extending a retreat as more central banks joined the Federal Reserve in raising interest rates in response to soaring inflation. About 20 minutes into trading, the Dow Jones Industrial Average was down 0.5 percent at 30,042.90.

The broad-based S&P 500 shed 0.6 percent to 3,765.54, while the tech-rich Nasdaq Composite Index dropped 1.0 percent to 11,112.34.

European markets slide
European shares fell on Thursday, with tech stocks sliding after the U.S. Federal Reserve delivered another jumbo-sized interest rate hike and signalled more increases in its fight against stubbornly high inflation. The Bank of England raised its key interest rate to 2.25% from 1.75%.

The pan-European STOXX 600 index shed 1% by late afternoon trade while rate-sensitive European tech stocks were down 1.6% and banks up 0.4%.

Tech View: Small-bodied candle on daily charts
Nifty formed a small-bodied candle on the daily charts. "The Nifty remained volatile during the day as the market participants adjusted positions according to the FOMC outcome. On the daily chart, Nifty formed a small-bodied candle with wicks on both sides, suggesting indecisiveness,” Rupak De, Senior Technical Analyst at LKP Securities, said.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed a bullish trade setup on the counters of NHPC, KPIT Technologies, NMDC, Devyani International and Bombay Dyeing, 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 Fortis Healthcare, Power Grid, Vedanta, Ujjivan Small Finance and Apollo Tyres. A bearish crossover on the MACD on these counters indicated that they had just begun their downward journey.

Most active stocks in value terms
Ambuja Cements (Rs 1,323 crore), Adani Enterprises (Rs 1,288 crore), Infosys (Rs 1,257 crore), RIL (Rs 1,184 crore) and Fortis Healthcare (Rs 1,165 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: 32.51 crore), Vodafone Idea (Shares traded: 10.21 crore), Yes Bank (Shares traded: 9.95 crore), JP Power (Shares traded: 9.6 crore) and Shree Renuka Sugars (Shares traded: 9.91 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of Campus Activewear, Varun Beverages, Page Industries, Welspun Corp and Lakshmi Machine witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.

Stocks seeing selling pressure
Shares of Sona BLW Precision, MedPlus Health, Finolex, Zensar and Indian Oil 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 1,764 stocks ended in the red, while 1,676 names advanced.

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