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

Indian indices tanked for the fourth straight session as weak sentiments weighed globally. Nifty at the close slumped to 17,800 levels, while the broader markets witnessed even more pressure, with Nifty Midcap 100 index shedding around 4%. Within the Nifty pack, only Divi’s Labs logged marginal gains.

Here's how analysts read the market pulse:
“Indian benchmark indices made a gap down opening today amid weak global market cues. Indian markets witnessed bloodbath as investors remained cautious of rising covid cases around the globe. US indices closed lower as unemployment benefits increased less than expected thus, indicating a strong labour market.

This triggered fresh expectations of further rate hikes by the US fed. Asian markets closed with hefty losses as Japan’s core consumer inflation hit a fresh 40 year high of 3.7% in the month of November,” Mohit Nigam, Fund Manager & Head - PMS, Hem Securities, said.

"Globally markets were losing their grip post the Fed announcement which hinted at further rate hike in upcoming meetings. Robust US economic data points such as better-than-expected Q3 GDP, higher consumer confidence along with healthier jobless claims fuelled the worries flaming the volatility. Additionally, the spike in COVID cases across China dampened the appetite for risk as it instilled fears of another global COVID outbreak,” Vinod Nair, Head of Research at Geojit Financial Services.

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

US market close with gains
US stocks ended Friday’s session with gains as investors digested data showing inflation is continuing to ease and the Federal Reserve’s rate hikes are serving their purpose. Both the S&P 500 and the tech-heavy Nasdaq 100 still suffered their third week of losses, the longest losing streak for both indexes since late September, as investors this month grappled with a hawkish Fed and data pointing to a resilient economy that can handle more rate-hike pain.

European market subdued
Europe's STOXX 600 was subdued on Friday in thin pre-holiday trading after a turbulent week where hopes of an improving economic outlook overshadowed fears of recession and hawkish central banks. The STOXX 600 (.STOXX) was flat by close and bound for a 0.6% weekly advance. With the early gains, the index looked set to recoup a small part of last week's staggering 3.3% loss, which was driven by heightened concerns of a recession after the US Federal Reserve and the European Central Bank signalled a prolonged rate-hike cycle.

Tech View: Long bearish candle
While making lower lows for the last seven trading sessions, Nifty today slipped below the 200-DEMA (double exponential moving average) and formed a bearish candle on the daily scale. The index closed below the 50-day SMA (simple moving average) and also formed a long bearish candle on weekly charts which is broadly negative

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade Vijaya Diagnostics, Ami Organics and Krishna Institute 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 Yes Bank, Suzlon Energy, Indian Overseas Central Bank and RBL Bank 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 1,202 crore), Adani Enterprises (Rs 1133 crore), ICICI Bank (Rs 976 crore) and Infosys (Rs 944 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: 40.16 crore), Suzlon Energy (Shares traded: 26.32 crore), PNB (Shares traded: 17.41 crore), and IOB (Shares traded: 14.35 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of Abbott India witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure
Shares of Century Textiles, Brightcom Group, TV!8 Broadcast, Polyplex Corp among others hit their 52-week lows on Tuesday, which signals bearish sentiment on the counter.

Sentiment meter favours bears
Overall, market breadth favoured bears as 411 stocks ended in the green, while 3,181 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)