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

Benchmark Sensex and Nifty slid for the eighth straight day to close at four-month lows on Tuesday as growing worries over interest rate hikes to stem inflation and FII selling unnerved investors.

Mixed global cues, selling in index heavyweights and caution by investors ahead of the release of key macroeconomic data waylaid the key indices to their longest losing run in more than three-and-a-half years. Nifty ended February with a 2% cut.

Here's how analysts read the market pulse:

“For bulls, 17,350 could be the immediate trigger level and above the same, the index could move up to 17,425-17,4780. On the flip side, as long as the index trades below 17,350 the correction wave is likely to continue and it could slip till 17,250-17,200,” said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.

“Global investors' interest in the equity market is weakening due to the slowdown in the economy, led by high inflation and contractionary monetary policy. Inflows are being diverted to safe assets, and corporate earnings growth is dropping, affecting the performance of the stock market and demanding downgrade in valuation. The double whammy for India is that it is expensive compared to other EMs, resulting in underperformance among the global market,” said Vinod Nair, Head of Research at Geojit Financial Services.

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

US stocks
Wall Street stocks edged down Tuesday after a positive start to the week, as traders weigh lingering concerns over the Federal Reserve's future policy direction. The Dow Jones Industrial Average fell 0.3% to 32,799.13 while the broad-based S&P 500 lost 0.2% to 3,974.78.

The tech-heavy Nasdaq Composite Index ticked down 0.1% to 11,453.64. At 9:42 a.m. ET, the Dow Jones Industrial Average was down 116.83 points, or 0.36%, at 32,772.26 and the S&P 500 was down 2.73 points, or 0.07%, at 3,979.51.

European shares
European shares fell on Tuesday, with UK's Ocado sinking after a worse-than-expected full-year loss, while data from France and Spain pointed to inflation being stickier than feared.

The continent-wide STOXX 600 index slipped 0.3% in the first hour of trading, after closing sharply higher in the previous session.

Tech View
A reasonable negative candle was formed on the daily chart. This candle pattern has negated the positive candle like hammer of the previous session. New swing low was formed at 17,255 levels. After the downside breakout of immediate support of the ascending trend line at 17,490 levels on 24th Feb, the market witnessed weakness in the next two sessions thereby confirming a validity of downside breakout, said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on the counters of Hindustan Construction Company, Federal Bank, Adani Transmission, City Union Bank and Aditya Birla Capital, among others.

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 signaling weakness ahead
The MACD showed bearish signs on the counters of TVS Motor, Marksans Pharma, Wonderla Holidays, Trent and Tejas Networks, 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
Adani Enterprises (Rs 4,437 crore), BOB (Rs 2849 crore), CG Power (Rs 2402 crore), RIL (2369 crore) and HCL Tech (Rs 2241 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
Yes Bank (Shares traded: 21.27 crore), BOB (Shares traded: 17.92 crore), CG Power (Shares traded: 7.84 crore), Tata Steel (Shares traded: 7.65 crore) and Vodafone Idea (Shares traded: 6.77 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of Triveni Turbine, Equitas SFB, Supreme Industries and Ion Exchange among others witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure
Shares of Adani Transmission, Adani Gas, DCM Shriram, MMTC and Piramal Pharma among others hit their 52-week lows, signaling bearish sentiment on the counters.

Sentiment meter favours bears
Overall, market breadth favoured bears as 1,655 stocks ended in the green, while 1,808 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)