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

Indian equity indices continued to be dominated by bulls for the second straight session on Monday and ended higher, boosted by buying in index heavyweights Reliance Industries, ICICI Bank and M&M stocks amid a positive trend in global markets. The 30-share BSE Sensex climbed 240 points to settle at 62,788. Nifty ended just below 18,600 levels. On the other hand, broader markets underperformed.

Here's how analysts read the market pulse:

“The equity market is maintaining stability due to a continuous stream of favourable domestic economic indicators. Stronger-than-expected domestic PMI figures, sequential growth in auto sales, and robust expansion in bank credit are instilling investor confidence in India's growth prospects. On the other hand, the US jobs data presented a mixed picture, with non-farm payroll showing acceleration while the unemployment rate surged from 3.4% to 3.7% in May,” said Vinod Nair, Head of Research at Geojit Financial Services.

“The index has a support level at 18,550, indicating a price level where buyers have shown interest and may provide a foundation for potential price rebounds,” Kunal Shah, senior technical & derivative analyst, LKP Securities, said.

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

US stocks
The S&P 500 and Nasdaq on Monday hovered near highs hit in the previous session as Apple scaled an all-time peak, while investors assessed odds of the Federal Reserve pausing interest rate hikes at its upcoming policy meeting.

Apple Inc shares rose 1.5% to touch an all-time high ahead of its annual software developer conference later in the day, where the iPhone maker is widely expected to announce a new mixed-reality headset. At 10:15 a.m. ET, the Dow Jones Industrial Average was down 90.45 points, or 0.27%, at 33,672.31, the S&P 500 was down 0.44 points, or 0.01%, at 4,281.93, and the Nasdaq Composite was up 9.44 points, or 0.07%, at 13,250.21.

Palo Alto Networks Inc climbed 3.4% as the cybersecurity firm looks set to replace Dish Network in the S&P 500 index. Dish shares fell 1.8%.

European shares
European shares were flat on Monday as markets struggled to hold on to the tailwind from a rebound seen last week, while London stocks led regional gains following upbeat performances by energy firms on the back of higher oil prices.

The pan-European STOXX 600 index held near 462.5 points, trading barely within a three-point range, while London's FTSE 100 index, housing Europe's top oil companies, led gains with a 0.5% climb.

The European oil & gas sector index climbed 0.9%, lifted by rising oil prices after top global exporter Saudi Arabia pledged to cut production by another 1 million barrels per day from July.

Tech View: Small negative candle
A small negative candle was formed on the daily chart with minor upper shadow. Technically, this pattern indicates a lackluster type movement in the market at the highs, said Nagaraj Shetti, technical analyst, HDFC Securities.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on the counters of Lloyds Steel, BHEL, Vakrangee and Tata Motors, 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 IOC, ITC, Jain Irrigation, LT Foods and HDFC Life 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
Mazagon Dock Shipbuilders (Rs 2,203 crore), HDFC Bank (Rs 1506 crore), Axis Bank (Rs 1376 cr), HDFC (Rs 1251 cr) and RIL (Rs 1243 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
Suzlon Energy (Shares traded: 27.23 crore), Zomato (Shares traded: 8.40 crore), Tata Steel (Shares traded: 3.96 crore), Reliance Power (Shares traded: 3.99 crore), and BEL (Rs 3.52 crore) are among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of Mazagon Dock Shipbuilders, eClerx, NLC India and Prestige Estate witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure
Shares of Viji Finance, JBF Industries among others hit their 52-week lows, signaling bearish sentiment on the counters.


Sentiment meter favours bulls
Overall, market breadth favoured bears as 2,128 stocks ended in the green, while 1543names settled with losses.



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