Ahead of Market: 12 things that will decide D-St action on Wednesday

NEW DELHI: After a weak opening, the Indian stock market extended losses for the third consecutive session on Tuesday amid the increasing intensity of headwinds including rising crude oil prices and selloff in global markets.

The market also seemed cautious amid the ongoing RBI policy meeting. The Nifty50 closed 0.92 per cent lower at 16,416.35 and the BSE Sensex slipped 1.02 per cent to 55,107.34.

The movement was in line with broader weakness in equities after a 50-basis-point rate increase by the Reserve Bank of Australia compounded concerns that hawkish central banks could tip the global economy into a recession.

Here's how analysts read the market pulse:

“Technically, the pattern signals a weak trend with range bound action. The Nifty is currently at the edge of breaking below the crucial support of 16,400 levels (support as per change in polarity and daily 10 and 20 day EMA). But minor buying is still emerging from the lows,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.

Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel One, feels it was yet another day of “boredom” for the markets as market participants are opting to be a bit cautious ahead of the RBI monetary policy slated in the forthcoming session.

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

Wall Street slips as growth shares weigh
US stock indexes fell on Tuesday as elevated Treasury yields hit rate-sensitive growth stocks, while Target Corp's gloomy margin forecast spooked the retail sector.

Shares of Target slid 4 per cent as the big-box retailer said it would have to offer deeper discounts and cut back on stocking discretionary items.

At 9:52 a.m. ET, the Dow Jones Industrial Average was down 167.50 points, or 0.51 per cent, at 32,748.28, the S&P 500 was down 16.01 points, or 0.39 per cent, at 4,105.42, and the Nasdaq Composite was down 39.43 points, or 0.33 per cent, at 12,021.94.

Tesla and Amazon.com fell 1.1% and 1.9%, respectively, to weigh the most on the S&P 500 and the Nasdaq.

European stocks pull back
European retail names fell off a cliff after US Target delivered a middle of the day surprise, cutting the quarterly margin forecast for the second time in less than a month.

About 2 percentage points were shaved off the European index of retail names in less than 20 minutes after the news hit the wires. It is now the worst performing sector of the day, down 2.5%, having earlier fallen as much as 3.1%.

The STOXX 600 was last down 0.8% near session lows.

Tech View: Bullish candle
NSE Nifty50 index formed a small negative candle on the daily chart with a minor lower shadow as the market saw selling thanks to cautiousness ahead of the RBI policy meeting scheduled on Wednesday. The index managed to defend the 16,400 level on a closing basis.

F&O: Support at 16,000
On the call side, the biggest open interest is at 16,800 followed by 16,600, meaning these are two resistance levels. On the put side, open interest converges at 16,000, followed by 16,300, providing support.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed a bullish trade setup on the counters of RBL Bank, HPCL, Godfrey Phillips, Adani Gas, Thyrocare Tech and P&G Health.

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 Brightcom Group, Dhani Services, Heo Moto, Prince Pipes, V-Mart Retail and JK Lakshmi Cement. 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 1582 crore), ONGC (Rs 987 crore), Oil India (Rs 876 crore), TCS (Rs 779 crore), Maruti Suzuki (Rs 763 crore), Infosys (Rs 740 crore) and ICICI Bank (Rs 732 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
Vodafone Idea (Shares traded: 8 crore), Future Retail (Shares traded: 6 crore), ONGC (Shares traded: 6 crore), Suzlon Energy (Shares traded: 5 crore), MRPL (Shares traded: 5 crore) and Zomato (Shares traded: 4 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Oil India, MRPL and Hindustan Aeronautics witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.

Stocks seeing selling pressure
TCNS Clothing, ICICI Lombard, Ramco Cements, Dalmia Bharat, Glenmark Pharma, Vakrangee and GSPL 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 1,250 stocks ended in the green, while 2,052 names settled with cuts.