Ahead of Market: 10 things that will decide D-Street action on Tuesday

Benchmark indices ended Monday’s session on a strong note with Nifty breaching 18,000 levels while Sensex ended higher at 60,746 points. Among sectoral indices, Nifty Consumer Durables, Nifty IT and Nifty Auto were the top gainers.

Subash Gangadharan, Senior Technical and Derivative Analyst, HDFC Securities said, “Zooming into the 15 minutes chart, we see that the Nifty opened with an upgap and then traded in a range. The index then found support at the 20 period DMA on the 15 min chart and surged higher towards the closing. The short term trend therefore remains up as the Nifty has moved above the previous swing high of 17919 and made higher bottoms over the last few weeks.”

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities, said, “Investors are hoping for a smaller rate hike by the US Federal Reserve this week against the earlier expectation of a more aggressive rate increase. This optimism has fuelled a sharp upsurge, which has pushed both the local benchmark indices above their key psychological levels.”

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

US market
Wall Street's main indexes fell on Monday, bogged down by a drop in shares of Apple and other megacaps, while investors braced for a hefty rate hike from the Federal Reserve this week and assessed the path of future interest rates.

The US Fed is set to meet on Tuesday and Wednesday, where policymakers are expected to deliver a fourth straight 75-basis point interest rate hike to curb decades-high inflation.

Apple Inc dropped 2.1% in early trading. A Reuters report said production of its iPhones could slump by as much as 30% next month due to tightening COVID-19 curbs in China. Shares of other megacaps including Amazon.com, Google-owner Alphabet, and Microsoft and Meta Platforms were down between 0.8% and 3%.

At 10:14 a.m. ET, the Dow Jones Industrial Average was down 184.99 points, or 0.56%, at 32,676.81, the S&P 500 was down 33.15 points, or 0.85%, at 3,867.91, and the Nasdaq Composite was down 145.57 points, or 1.31%, at 10,956.88.

European shares
European stocks marked their first monthly gain in three on Monday, buoyed by a better-than-expected earnings season and hopes that the U.S. Federal Reserve would slow its pace of interest rate hikes. The pan-European STOXX 600 index rose 0.4% to close at a more than six-week high, having recouped early losses following data showing record-high inflation in the euro zone.

Tech View: Bullish candle
Nifty today formed a bullish candle on the daily scale to end 225 points higher above the 18,000 zone. A higher bottom formation indicated the continuation of an uptrend in the near future. “Now, it has to hold above 18000 zones, for an up move towards 18200 and 18350 zones whereas supports are placed at 17900 and 17777 zones,” said Chandan Taparia of Motilal Oswal Financial Services.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trend in the counters of JSW Energy, Aditya Birla Fashion, FirstSource Solution, Orient Cement and Swan Energy 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 LIC Housing Finance, M&M Financial, IRCTC, City Union Bank and Ramkrishna Forgings 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
Maruti Suzuki (Rs 1,858.91 crore), RIL (Rs 1,460 crore), Bandhan Bank (Rs 1,188 crore), and Nykaa (Rs 999 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
PNB (Shares traded: 8.2 crore), Suzlon Energy Shares traded: 5.58 crore), Bandhan Bank (Shares traded: 4.89 crore), Zomato (Shares traded: 4.59 crore) and HFCL (Shares traded: 4.25 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of Karur Vysya Bank, Max Healthcare, Trent, Cummins India and Indian Bank 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 Intellect Design, Gland Pharma, Delhivery and Piramal Pharma, among others, 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 1,779 tocks ended in the green, while 1,781 names ended in the red.

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