Ahead of Market: 10 things that will decide stock action on Monday

Benchmark indices snapped the 7-day losing streak on Friday after RBI hiked key policy rates on expected lines. Nifty reclaimed 17,000 levels and ended the session higher with gains of over 1.6%. Now, as most key events are behind, focus will shift to auto and consumption sectors ahead of monthly sales data and high demand in the ongoing festive season.

Here's how analysts read the market pulse:

Vinod Nair, Head of Research at Geojit Financial Services, said Fed’s hawkish approach to tame inflation through aggressive interest hikes was a misfortune for the domestic market’s bull-run. Although the domestic economy is buoyed by solid fundamentals, the stock market's appetite for risk has been hindered by the rising worry of a worldwide recession, he said.

Rupak De, Senior Technical Analyst at LKP Securities, said, “Nifty snapped its losing streak as the index posted gain after seven consecutive days of correction. On the lower end, it found support at 16800 and moved up. On the daily chart, the index has formed a bullish engulfing pattern”.

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

US market end down on choppy trading
Stocks fell in choppy trading Friday as Wall Street closed out a terrible week, month and quarter that brought the S&P 500 to a new 2022 low. This was the first time Wall Street has posted three consecutive quarters of losses since the aftermath of the global financial crisis more than a decade ago. The Dow Jones Industrial Average closed below 29,000 for the first time since November 2020. The index fell 500.10 points, or 1.71%, to 28,725.51. The Nasdaq Composite was 1.51% lower, ending the day at 10,575.62. Meanwhile, the S&P 500 was down 1.51% on Friday, falling to 3,585.62. The index closed out its worst month since March 2020. For September, the Dow tumbled 8.8%, while the S&P 500 fell 9.3%. The Nasdaq lost 10.5%.

European shares close higher
European stocks ended Friday 1.3% higher following a muted relief rally but ended September with sharp losses. The Stoxx 600 index fell 7.8% through the month, its worst performance since June, and 6% through the third quarter. In London, The FTSE 100 ended a little higher on Friday, supported by a strong showing from the recently-battered housebuilding sector and an upward revision to UK GDP, but underperforming its European counterparts.

Tech View: A bullish engulfing candle
A bullish engulfing candle was formed on the daily chart which offset the Nifty 50 index lower highs formation of the last seven trading sessions.

On the weekly chart, the index formed a small negative candle with a long lower shadow that suggests formation of a bullish hammer type candle pattern at the lows.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Infosys, Lupin, Apollo Micro Systems, GPT Infraprojects, Strides Pharma and Restaurant Brands.

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 Asian Paints, PVP Ventures, Tourism Finance, VIP Industries and Dynamic Services 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
RIL (Rs 2,037 crore), Adani Enterprises (Rs 1,489 crore), Adani Green (Rs 1,303 crore), Bajaj Finance (Rs 1,169 crore) and Infosys (Rs 1,137 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: 22.33 crore), Suzlon Energy (Shares traded: 10.78 crore), PNB (Shares traded: 9.04 crore), Yes Bank (Shares traded: 8.68 crore) and Zomato (Shares traded: 7.14 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of Mazagon Dock, Phoenix Mills, Bharti Airtel, KIMS and Aditya Birla Retail witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure
Shares of Sona BLW Precision, Sanofi India, LIC, Birlasoft and Intellect Design were among those that witnessed strong selling pressure and hit their 52-week lows, signaling bearish sentiment on the counters.

Sentiment meter favours bulls
Overall, market breadth favoured gainers as 2,254 stocks ended in the green, while 1,174 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)