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

Indian equities witnessed a heavy sell-off on Friday, a day after the US Fed increased interest rates on expected lines and reiterated to continue with its aggressive rate hike moves to go ahead, to fight inflation. Sensex plunged over 1,000 points, while the Nifty50 ended the session lower by 300 points at 17,327. Sectorally, all the indices ended in the red, with the Nifty PSU Bank index plunging 4 per cent.

Here's how analysts read the market pulse:

Rupak De, Senior Technical Analyst at LKP Securities: says, "Nifty has fallen sharply after an indecisive candle on the daily chart. The sharp fall has led the index below the crucial short-term moving average. The momentum oscillator on the daily timeframe is in a bearish crossover. The trend looks negative, which may take the Nifty towards 17,000 over the short term. On the higher end, it has resistance at 17,500."

Deepak Jasani, Head of Retail Research-HDFC Securities, said: “Nifty ended in the red for the third consecutive session on September 23, driven down by weak global cues. Nifty opened flat and started to fall from the opening time. Volumes on the NSE were the lowest since September 12.”

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

Dow at lowest level since Nov 2020
Wall Street stocks finished decisively lower Friday, falling for the fourth straight session as markets bet on the rising risk of a recession due to interest rate hikes.

All three major indices dropped more than 1.5 percent, adding to the week's losses after Wednesday's big Federal Reserve rate increase spurred similar moves by other central banks in response to elevated inflation.

The Dow Jones Industrial Average tumbled 1.6 percent to 29,590.41, its lowest closing value since November 2020. The broad-based S&P 500 fell 1.7 percent to 3,693.23, while the tech-rich Nasdaq Composite Index sank 1.8 percent to 10,867.93.

European stocks close 2.3%
European energy and material stocks sank nearly 6% on Friday, pushing a broader index of regional shares to near two-year lows as dismal euro zone data pointed to an economic downturn, adding to worries over hawkish central bank moves.

UK stocks lost 2%, with further losses capped by a 3% plunge in the pound after British finance minister Kwasi Kwarteng announced a series of tax cuts and measures aimed at boosting growth. The pan-European STOXX 600 index dropped 2.3%, taking weekly losses to 4.4% - its worst week since mid-June.

Tech View: Long bearish candle
The Nifty50 index formed a long bearish candle on the daily charts. The Supertrend indicator also triggered a sell on Friday.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed a bullish trade setup on the counters of Apcotex Industries, Gokul Refoils, EIH, Pricol and Metropolis, 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 PNB, NHPC, Zee Entertainment, SBI, Axis Bank, and Bharti Airtel. A bearish crossover on the MACD on these counters indicated that they had just begun their downward journey.

Most active stocks in value terms
Infosys (Rs 1,436 crore), ICICI Bank (Rs 1,415 crore), Infosys (Rs 1,257 crore), Power Grid (Rs 1,343 crore), Tata Steel (Rs 1,154 crore) and HDFC Bank (Rs 1,147crore) 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: 13.99 crore), Tata Steel (Shares traded: 10.97 crore), YES Bank (Shares traded: 10.40 crore), Vodafone Idea (Shares traded: 8.13 crore) and PNB (Shares traded: 6.95 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of Tube Investments, ITC, KRBL, Maruti Suzuki, and Campus Activewear witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.

Stocks seeing selling pressure
Shares of IEX, Biocon, Mastek, Gland Pharma, LIC, and Sanofi India were among those that witnessed strong selling pressure and hit their 52-week lows, signaling bearish sentiment on the counters.

Sentiment meter favours bears
Overall, market breadth favoured losers as 2,580 stocks ended in the red, while 896 names advanced.

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