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

Markets snapped the 2-day win-run on Thursday and ended lower, with Nifty ending at 18,344 level, down 66 points. Nifty Bank too, after logging record highs intra-day, ended weak by 0.2%.

Here's how analysts read the market pulse:

Nagaraj Shetti, Technical Research Analyst, HDFC Securities said, "Nifty witnessed sharp weakness from the intraday highs on Thursday and closed the day lower by 65 points. After opening on a negative note, the market shifted into a range bound action for the better part of the session. An attempt of upside recovery of mid part has failed to sustain and Nifty showed sharp declines towards the end."

Vinod Nair, Head of Research at Geojit Financial Services, said, "Global markets have recently surged on expectations that the Fed may scale back its aggressive rate hike schedule in reaction to easing US inflation statistics. The euphoria was, however, dashed by better US retail sales in October and aggressive remarks from Fed officials. The domestic market moved in tandem with the trend, with most sectors in red. As the domestic market got more expensive, FIIs were seen being cautious."

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

US market
US stock indexes fell on Thursday as mixed economic data and hawkish comments from a Federal Reserve official fuelled concerns that the central bank may not ease its aggressive policy tightening. St. Louis Federal Reserve President James Bullard said rate hikes so far "have had only limited effects on observed inflation," and that the central bank needs to continue raising interest rates by at least another full percentage point.

Bullard's comments come as strong retail sales numbers on Wednesday stoked concerns that the Fed would keep raising borrowing costs, even as evidence of cooling inflation gives the central bank room to reduce the size of its rate hikes.

All major S&P 500 sectors traded lower on Thursday, with retail and consumer discretionary falling 1.9% and 1.8%, respectively. Shares of megacap tech and other growth companies including Apple Inc, Amazon.com and Alphabet were down between 0.9% and 3%.

The S&P 500 has gained more than 6% from its October closing lows on hopes of a less hawkish Fed, though the index has logged steep losses so far this year on fears of a recession stemming from the hefty interest rate hikes.

At 10:07 am ET, the Dow Jones Industrial Average was down 265.98 points, or 0.79%, at 33,287.85, the S&P 500 was down 45.82 points, or 1.16%, at 3,912.97, and the Nasdaq Composite was down 140.01 points, or 1.25%, at 11,043.65.

Department store chain Macy's Inc gained 11.2% and personal care products retailer Bath & Body Works Inc surged 17.3% after the companies raised their annual profit forecasts.

European shares
Futures on the Euro STOXX 50 rose 0.4%, while DAX futures gained 0.6% and derivatives on the UK's FTSE 100 were unchanged. U.S. futures also pointed to a recovery after Wednesday's drop driven by a grim outlook from big box retailer Target.

Tech stocks in Europe remain in focus after Nvidia beat quarterly revenues and following a rough session for chip stocks in Asia on the back of grim signals from U.S.'s Micron about excess inventories and sluggish demand.

Tech View: Negative candle
Nifty formed a small negative candle on the daily chart with a long upper shadow. Technically, this pattern indicates an emergence of minor weakness from the highs amidst a narrow-range movement. Nifty is now placed at the lower end of the range of the last four sessions.

Stocks showing bullish bias:
Momentum indicator Moving Average Convergence Divergence (MACD) showed a bullish trend in the counters of Macrotech Developers, Home First Finance, PNC Infratech, Phillips Carbon and Castrol India 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 NLC India, GMR Infra, Indiabull Housing, HDFC Life and Mastek, among others.

Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value term
Nykaa (Rs 1,151 crore), Paytm (Rs 239 crore), IRFC (Rs 72 crore) and Timken India ( Rs 64 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
Nykaa( Shares traded: 6.54 crore), IRFC (Shares traded: 2.5 crore), Vodafone Idea (Shares traded: 1.95 crore) and Suzlon Energy (Shares traded: 1.33 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of IRFC, Raymond, Exide Industries, Global Health and Bharti Airtel, 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 Piramal Pharma, Quess Corp, Policy Bazaar, Indigo Paints and Max Financial among others witnessed strong selling pressure and hit its 52-week lows, signaling bearish sentiment on the counters.

Sentiment meter favours bears
Overall, market breadth favoured losers as 1,422 stocks ended in the green, while 2,081 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)