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

New Delhi: On the back of global cues and signs of inflation peaking out, the equity market has so far gained around 5 per cent from its recent lows. While the Nifty ended up 1.1 per cent higher at 16,520.85, the Nifty IT index rallied 2.93 per cent. The broader indices underperformed and closed flat to marginally higher.

Here's how analysts read the market pulse:

Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial, said that FIIs have turned buyers over the last two sessions as valuations turn comfortable while concerns are abating. "However, given the sharp rally in the last few days, we expect markets may take a pause and consolidate before resuming its upward journey. Investors would pick up cues from the ECB’s MPC on Thursday and the US Fed meeting next week," he said.

Rupak De, Senior Technical Analyst at LKP Securities, said Nifty found resistance at higher levels as it reached the upper band of the rising channel on the daily chart. "Over the near term, the index may consolidate till it gives a breakout above 16,600. On the lower end, 16,350-16,400 may remain crucial support. A buy on dips strategy is likely to work as long as the Nifty holds above 16,350."

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

US stocks tread water
Wall Street is taking a pause on Wednesday, a day after rallying to its best day in weeks, following a mixed set of profit reports from big US companies.

The S&P 500 was drifting between small gains and losses and was down 0.3 per cent in early trading, a day after soaring 2.8 per cent. The Dow Jones Industrial Average was down 142 points, or 0.4 per cent, at 31,684, a little past 10 a.m. Eastern time, and the Nasdaq composite was 0.1 per cent higher.

Profit reporting season is ramping up for big companies, with more types of industries offering details about how high inflation and a possible recession are affecting their customers. A lot is riding on whether they can continue to deliver healthy profits.

European stocks retreat
European stocks retreated Wednesday as the EU took precautionary measures in the face of reduced Russian gas supplies.

The pan-European Stoxx 600 was down 0.26 per cent by late-afternoon, halving reversed opening gains of around 0.4 per cent

The euro edged higher, meanwhile, as traders were looking ahead to a key ECB meeting Thursday.

Tech View
Nifty50 ended up forming an indecisive bearish candle on the daily chart, after a gap-up opening, suggesting investors were indecisive at highs. Analysts believe that the index could face resistance around the 16,650 level.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Oil India, Jubilant Foodworks, AU Small Finance Bank, Sonata Software, Strides Shasun and Solar Industries.

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 Hemisphere Properties, GSPL, Rail Vikas Nigam, Muthoot Finance, Navin Fluorine and GSK Pharma.

A bearish crossover on the MACD on these counters indicated that they had just begun their downward journey.

Most active stocks in value terms
RIL (Rs 2,768 crore), HDFC Bank (Rs 1,388 crore), TCS (Rs 1,069 crore), HUL (Rs 1,042 crore), SBI (Rs 978 crore), and Axis Bank (Rs 823 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
ONGC (Shares traded: 6 crore), SBI (Shares traded: 1.9 crore), Tata Motors (Shares traded: 1.7 crore), ITC (Shares traded: 1.6 crore), Wipro (Shares traded: 1.3 crore) and Axis Bank (Shares traded: 1.2 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of ITC, Bajaj Auto, Eicher Motors and M&M witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure
Shares of Renaissance Global Limited, DRC Systems India, Nandan Denim, Radhika Jeweltech Limited and Orissa Bengal Carrier Limited witnessed strong selling pressure and hit their 52-week lows, signaling bearish sentiment on the counters.

Sentiment meter favours bulls
Overall, market breadth favoured winners as 1,880 stocks ended in the green, while 1,459 names settled with cuts.

(With inputs from agencies)

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