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

Boosted by soft US inflation data, the domestic equity headline index Nifty ended in the green for the fourth consecutive day. The majority of the sectors gained, with banks, IT and realty being the top gainers. Mid and smallcaps outperformed.

Here's how analysts read the market pulse:

Prashanth Tapse, Research Analyst, Senior VP (Research), Mehta Equities, said the technical landscape for Nifty is likely to be positive as long as the benchmark trades above its biggest support level at 17,377 with targets at 17,889.

On breaching the same, all bullish eyes will be on the psychological 18,000 mark, he said.

Nagaraj Shetti, Technical Research Analyst, HDFC Securities, said the short-term trend of the Nifty continues to be positive, and one may expect further upside in the short term. “Our near-term upside target remains intact around 17,800-17,900 levels, and there is a possibility of selling pressure emerging from the highs. Immediate support is placed at 17,550 levels.”

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

Wall Street rises
Wall Street is rising again Thursday after another encouraging dose of data showed inflation cooled last month.

The S&P 500 was 0.5% higher following a report showing inflation at the wholesale level slowed more than economists expected. It bolstered hopes among investors that inflation may be close to a peak and that the Federal Reserve won’t be as aggressive about raising interest rates as feared.

The Dow Jones Industrial Average was up 180 points, or 0.5%, at 33,490, as of 11:11 a.m. Eastern time, and the Nasdaq composite was 0.2% higher. All the indexes were up earlier in the morning but pared their gains after Treasury yields climbed.

European shares tick higher
European shares edged higher on Thursday after a strong rally in the previous session on signs of U.S. inflation cooling, while Aegon climbed after the Dutch insurer raised its full-year forecast.

The pan-European STOXX 600 index rose 0.1%, after clocking its best session in nearly two weeks on Wednesday on bets that the softer-than-expected inflation reading will encourage the Federal Reserve to become less aggressive on interest rates hikes.

Tech View: Small bearish candle on daily chart
Nifty50 ended up forming a small bearish candle on the daily chart. Analysts said the index is near key resistance levels and that the 17,700-800 range may be a strong hurdle for the index in the near future.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed a bullish trade setup on the counters of KPIT Tech, Minda Industries, Prestige Estate, EID Parry, Lakshmi Machine and Bank of Baroda.

The MACD is known for signalling 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 IOB, Aptus Value Housing, Hathway Cable, Colgate-Palmolive, Gujarat Alkalies and Ashok Leyland. A bearish crossover on the MACD on these counters indicated that they had just begun their downward journey.

Most active stocks in value terms
ICICI Bank (Rs 1,967 crore), HDFC Bank (Rs 1,357 crore), RIL (Rs 981 crore), HDFC (Rs 970 crore), Axis Bank (Rs 935 crore), and Tata Steel (Rs 825 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
Tata Steel (Shares traded: 7.5 crore), Coal India (Shares traded: 2.9 crore), ICICI Bank (Shares traded: 2.3 crore), ONGC (Shares traded: 1.9 crore), NTPC (Shares traded: 1.6 crore) and Hindalco (Shares traded: 1.5 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of Home First Finance, Devyani International, EID Parry, HAL, Bank of Baroda, Metro Brands and Indian Hotels witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.

Stocks seeing selling pressure
Shares of Alembic Pharma and Medplus Health witnessed strong selling pressure and hit their 52-week lows, signalling bearish sentiment on the counters.

Sentiment meter favours bulls
Overall, market breadth favoured losers as 1,792 stocks ended in the green, while 1,596 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)