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

After the US Fed announced a 75 basis point hike last night, the domestic equity market fell for the fifth consecutive day today. Nifty hit a 52-week low of 15,335.10, while the Sensex also hit a low of 51,425.48 during the day. Sensex ended lower by over 1,000 points.

Here's how analysts read the market pulse:

Ruchit Jain, Lead Research, 5paisa.com, said the trend continues to remain bearish. “However, the momentum readings on the lower time frame chart have reached the oversold zone and hence, a pullback move could be seen from the short-term supports in the near term,” he said.

Nagaraj Shetti, Technical Research Analyst, HDFC Securities, said the sharp weakness of Thursday below the crucial support (15,600) indicates a significant downside breakout in the market. “One may expect the Nifty to slide down to the next lows of around 15,000-14,800 in the near term. Any upside bounce from here could be a sell-on-rise opportunity.”

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

Dow falls 700 points
Markets worldwide are back to tumbling on Thursday, and Wall Street is down close to 3% in a nearly total wipeout as worries about a fragile economy roar back to the fore.

The S&P 500 was 2.8% lower in early trading, more than reversing its blip of a 1.5% rally from a day before. Analysts had warned of more big swings given deep uncertainties about whether the Federal Reserve and other central banks can tiptoe the narrow path of hiking interest rates enough to slow high inflation but not so much that they cause a recession.

European Stocks Drop
European shares fell as investors weighed risks to growth from surging inflation after the Federal Reserve went ahead with the biggest rate increase since 1994.

The Stoxx Europe 600 Index was 2.3% lower by 12:07 p.m. in London, with retail, chemicals and technology sectors leading the declines.

Tech View: Nifty50 forms long bearish candle
Nifty50 formed a long bearish candle on the daily chart that engulfed the previous session's candle. During the day, the 50-pack index could not hold its key support levels as it entered the oversold territory, as suggested by the 14-day relative strength index. While the trend broadly stays positive, some bounce after the steep fall is likely.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed a bullish trade setup on the counters of Vakrangee, Team Lease Service, Equitas SFB, Thermax, Deepak Nitrite and Suven Pharma.

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 Tata Communications, Sun TV, Torrent Pharma, Pidilite Industries, BPCL and Tata Consumer. A bearish crossover on the MACD on these counters indicated that they had just begun their downward journey.

Most active stocks in value terms
Reliance Industries (Rs 2,056 crore), Bajaj Finance (Rs 1,178 crore), Tata Steel (Rs 905 crore), Tata Steel (Rs 1,143 crore), Maruti Suzuki (Rs 1,046 crore), and Infosys (Rs 936 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
ONGC (Shares traded: 2.5 crore), Tata Motors (Shares traded: 2.2 crore), NTPC (Shares traded: 1.8 crore), Hindalco (Shares traded: 1.6 crore), Coal India (Shares traded: 1.4 crore) and ITC (Shares traded: 1.4 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of Kohinoor Foods, Marathon Nextgen, Mirza International and others witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.

Stocks seeing selling pressure
Tata Steel, Hindalco, Tech Mahindra, Infosys, Wipro, IndusInd Bank, Bajaj Finance and Grasim 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 558 stocks ended in the green, while 2,826 names settled with cuts.