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

Equity benchmarks began the New Year on a strong note, despite lackluster cues on account of New Year holiday in most financial markets. Sensex climbed 327 points and the Nifty finished near the 18,200-mark on Monday helped by positive macroeconomic data and a firm trend in European equities bolstering investor sentiment.

The 30-share BSE Sensex climbed 327 points to settle at 61,168. Similarly, the broader NSE Nifty advanced 0.51% to 18,198.

Here's how analysts read the market pulse:

“Markets welcomed 2023 on high spirits in the absence of global cues. Strong macros and expectations of healthy corporate earnings provided support to domestic equities. India’s manufacturing PMI rose to 13 month high to 57.8 in December, while GST collection too rose by 15% in December 2022 to Rs 1.49 lakh crore, thus, supporting overall sentiments in the market,” said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services.

“Nifty opened higher and remained in positive territory throughout the day to close with gains of 92 points at 18,197 levels. Majority sectors ended in green", he added.

“On the technical front, the key resistance level for Nifty50 is 18,300, and on the downside 18,000 can act as strong support. Key resistance and support levels for Bank Nifty are 43,800 and 42,900, respectively,” said Mohit Nigam, Fund Manager & Head - PMS, Hem Securities.

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

US market:
The US stock market was closed on January 2, 2023, on account of the New Year holiday. The US stock market holiday list for 2023 shows that there will not be any trading on the Nasdaq stock exchange and New York Stock Exchange (NYSE) on Monday, January 2.

European shares:
World stocks inched higher, European bond yields dropped and the dollar held firm in light trading on Monday following warnings from the International Monetary Fund's managing director that a third of the world will fall into recession in 2023. MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.04%, just short of an index of global shares, which climbed 0.21%.

The pan-European STOXX 600 index climbed 0.9%, retracing some of the nearly 12% it lost in 2022, bludgeoned by central banks' aggressive monetary policy tightening. ECB President Christine Lagarde said eurozone wages were growing quicker than earlier thought, and the central bank must prevent this from adding to already-high inflation.

Tech View: Positive candle
A reasonable positive candle was formed on the daily chart, placed beside the long negative candle of Friday. This signals minor strength of bulls to come back from the lows. A decisive move above 18,265 levels could negate the bearish pattern of dark cloud cover that formed on Friday.

Stocks showing bullish bias:
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish signals on the counters of Tata Steel, NCC, SAIL, REC and Vedanta, 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 signaling weakness ahead:
The MACD showed bearish signs on the counters of Kalyan Jewellers, Max India and Narayana Hrudayalaya and Capri Global, 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:
Tata Steel (Rs 1,689 crore), Yes Bank (Rs 1,068 crore), SAIL (Rs 759 crore) and IRB Infra (Rs 716 crore) were among the most active stocks on the 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: 49.52 crore), Tata Steel (Shares traded: 14.34 crore), Suzlon Energy (Shares traded: 11.57 crore), and SAIL (Shares traded: 8.68 crore) were among the most traded stocks in the session on the NSE.

Stocks showing buying interest:
Shares of Usha Martin, PNB Housing, PFC, Jindal Stainless and REC among others hit their 52-week highs, which signals bullish sentiment on the counter.

Stocks seeing selling pressure:
Shares of Aavas Financiers, Aurobindo Pharma and IPCA Labs, among others, hit their 52-week lows, which signal bearish sentiment on the counter.

Sentiment meter favours bulls:
Overall, market breadth favoured bulls as 2,306 stocks ended in the green, while 1,304 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)