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

Markets continued their winning run for the fourth consecutive day, with the Nifty swiftly moving past the 18,000 level. Nonetheless, the buoyancy in the markets with the backdrop of softening crude oil prices and peaking inflation needs to play out well, caution experts.

Nagaraj Shetti, Technical Research Analyst, HDFC Securities, said, “The upmove with range-bound action continued in the market on Tuesday, and Nifty closed higher by 133 points amidst lacklustre type movement. After opening with an upside gap, the market moved up in the early hours. It later shifted to a narrow range movement at the highs which continued till the end”.

Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services, said: We expect market momentum to continue in the near term with the Nifty heading towards 18,200 zones. Positive global cues, strengthening of the rupee and a drop in 10-year bond yield to five month low are some of the key positives. FIIs have been net buyers for more than the last 3 days.

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

Wall Street slumps after hot inflation data
US Stocks fell sharply on Tuesday after a key August inflation report came in hotter than expected, hurting investor optimism for a less aggressive Federal Reserve.

The S&P 500 sank 2.3% in early trading Tuesday, threatening to snap a four-day winning streak. Bond prices also fell sharply, sending their yields higher, after a report showed inflation decelerated to 8.3% in August, instead of the 8.1% economists expected.

The Dow Jones Industrial Average lost 603 points, or 1.9%, to 31,777, as of 9:45 a.m. Eastern time, and the Nasdaq composite dropped 3.1%.

European markets slide
European shares and the euro slid on Tuesday, and European bond yields jumped, after data showed monthly U.S consumer prices unexpectedly rose in August.

The consumer price index gained 0.1% last month after being unchanged in July, the Labor Department said on Tuesday. Economists polled by Reuters had forecast the CPI dipping 0.1%.

European stocks turned sharply lower, pushing the pan-regional STOXX 600 equity benchmark into negative territory. The index was down 0.3% by 1246 GMT, having risen as much as 0.6% before the data.

Tech View: Small bullish candle
The 50-pack index, trading above its key short and long-term averages, formed a small bullish candle on the daily chart, with wicks on both the sides, reflecting the indecisiveness among traders at high.

Analysts see an upside hurdle for the index at 18,150, while immediate support for the index is seen at 17,925-900 levels.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed a bullish trade setup on the counters of Zomato, Vedanta, SAIL, KRBL, ICICI Bank, Samvardhana etc.

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 Federal Bank, TV 18, HFCL, Rashtriya Chemicals, Kotak Mahindra Bank and Varun Beverages.

A bearish crossover on the MACD indicated that they had just begun their downward journey.

Most active stocks in value terms
Bajaj Finserv (Rs 1,871 crore), Zomato (Rs 1,295 crore), Adani Enterprises(Rs 1219 crore), RIL (Rs 1074 crore), and Bajaj Finance (Rs 1022 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 the highest trading turnovers in the day.

Most active stocks in volume terms
Vodafone Idea (Shares traded: 21.33 crore), Zomato (Shares traded: 19.9 crore), Yes Bank (Shares traded: 11.84 crore), Suzlon Energy (Shares traded: 7.45 crore) and PNB (Shares traded: 6.76 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of BLS International Service, KRBL, Maharashtra Scooter, Tata Investment, AllCargo, Rolex etc. witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.

Stocks seeing selling pressure
Shares of Alembic Pharma and Sanofi India witnessed strong selling pressure and hit new 52-week lows, signalling bearish sentiment on the counters.

Sentiment meter favours bulls
Overall, market breadth favoured winners as 1,818 stocks ended in the green, while 1,677 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)