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

NEW DELHI: Indian indices traded higher for the second straight session, led by gains in the metal pack. Nifty, at the close, topped 18,132 points, up 0.65%, while Sensex added 361 points or 0.6%.

Here's how analysts read the market pulse:

"Nifty moved higher at the end of a volatile trading session, adding 0.65% to the previous closing. On the daily chart, the rally stopped at the 50 EMA. As long as it remains above 18,070, the trend appears to be positive. On the higher end, the index may move up towards 18,350. Support on the lower end is placed at 18,070/17,950,” said Rupak De, Senior Technical Analyst at LKP Securities.

"Indian markets opened on a positive note following positive trade in Asian markets as China re-opens its economy and gradually ends it zero-covid policy giving boost to sentiments and raising hopes of a recovery. During the afternoon session markets continued to trade in fine fettle. Sector wise, sugar stocks remained in limelight after the Ministry of Consumer Affairs, Food and Public Distribution announced 100% incentive on sugar sacrificed for producing ethanol from B-heavy molasses, sugarcane juice and syrup. During the day, cyclical sectors outperformed their peers and were trading with significant gains while FMCG, Healthcare traded in the red,” said Narendra Solanki - Head Fundamental Research- Investment Services, Anand Rathi Shares & Stock Brokers.

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

US market
The S&P 500 and tech-heavy Nasdaq fell on Tuesday, led by declines in some megacap growth stocks and Tesla, with optimism around China further easing its COVID-19 curbs limiting losses on the indexes.

Tesla Inc slid 5% after Reuters reported that the electric vehicle maker plans to extend a reduced production schedule at its Shanghai plant into January.

Megacap growth stocks Apple Inc, Alphabet Inc and Amazon.com Inc slipped between 1% and 2%, dented by a rise in U.S. Treasury yields. The drops made consumer discretionary and technology the worst performers among major S&P 500 sector indexes.

European shares
European shares climbed on Tuesday, tracking a global rally in equities after China further relaxed its COVID-19 curbs, raising hopes of a recovery in the world's second-largest economy. The pan-European STOXX 600 index gained 0.6% after a long Christmas holiday weekend. It has lost nearly 12% so far this year. Concerns of economic recession due to central banks' aggressive monetary policy tightening have hit European equities hard this year.

Lifting shares globally on Tuesday, China said it would drop its quarantine requirements for inbound visitors, further easing three-year border controls aimed at curbing COVID. Miners and energy stocks added 1.2% and 1.4% as commodity prices jumped on hopes of demand recovery in top consumer China.

Tech View: Small positive candle
A small positive candle was formed on the daily chart with a long lower shadow. Technically this pattern signals continuation of upside momentum in the market with buy on dips opportunity. This is a positive indication and signals more upside in the short term.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish bias on the counters of KCP Sugar, Reliance Naval, Rana Sugars, CCL Products India and TVS Motor, among others.

The MACD is known for signalling 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 General Insurance, Marico, Rajshree Sugars and V-Guard Industries 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
Yes Bank (Rs 1,060 crore), IOB (Rs 950 crore), JSPL (Rs 848 crore) and Tata Steel (Rs 832 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
Yes Bank (Shares traded: 52.55 crore), IOB (Shares traded: 28.96 crore), Suzlon Energy (Shares traded: 13.74 crore), and PNB (Shares traded: 12.43 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of JSPL, CCL Products and Usha Martin hit their 52-week highs, which signals bullish sentiment on the counters.

Stocks seeing selling pressure
Shares of Laurus Labs hit their 52-week low, which signals bearish sentiment on the counter.

Sentiment meter favours bulls
Overall, market breadth favoured bulls as 2,572 stocks ended in the green, while 926 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)