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

Equity benchmarks ended over 1% higher on Monday amid positive trends in global markets and buying in Reliance Industries and IT counters. D-Street witnessed the return of the risk-on sentiment Indian indices. The 30-share BSE Sensex zoomed 847 points to settle at 60,747. The broader NSE Nifty climbed 242 points or 1.35% to end at 18,101. All Nifty sectoral indices ended in the green, with Nifty IT logging the maximum gains of close to 3%.

Here's how analysts read the market pulse:

“After showing sharp weakness in the last three sessions, Nifty witnessed an excellent upside bounce on Monday and closed the day higher by 241 points. After opening with an upside gap of 91 points, the market shifted into further upside with range bound movement in the early- to mid-part of the session. Intraday weakness of mid-part has been used as a buy on dips opportunity. The opening upside gap remains unfilled,”Nagaraj Shetti, Technical Research Analyst, HDFC Securities, said.

"Wall Street climbed in anticipation of a less aggressive US Fed as wage growth slowed and service activity contracted, fuelling bets that inflation is moderating. Furthermore, the December payrolls rising higher than anticipated increased the possibility of a softer landing for the US economy. These gains were also absorbed by the domestic market, with IT being the biggest gainer ahead of the release of sector earnings, as the favourable US economy boosted sector optimism,”Vinod Nair, Head of Research at Geojit Financial Services, said.

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

US market
The tech-heavy Nasdaq led gains among the main Wall Street indexes on Monday, boosted by shares of Amazon and Tesla, while signs of a cooling labour market supported bets of a slower pace of interest rate hikes by the Federal Reserve.

Amazon.com Inc rose 3.4% after Jefferies said it saw cost pressures easing for the e-commerce giant in the second half of the year. At 9:58 am ET, the Dow Jones Industrial Average was up 132.40 points, or 0.39%, at 33,763.01, the S&P 500 was up 33.17 points, or 0.85%, at 3,928.25, and the Nasdaq Composite was up 160.39 points, or 1.52%, at 10,729.69.

Macy's Inc and Lululemon Athletica Inc dropped 8.7% and 10.3%, respectively, following dour holiday-quarter forecasts from both the retailers.

European shares
European stock indexes rose in early trading on Monday and world stocks were at the highest in more than three weeks, boosted by investors scaling back expectations for US Federal Reserve rate hikes and optimism about China's borders reopening. At 1219 GMT, the MSCI World Equity index was up 0.6%, having hit its highest since December 15.

Europe's STOXX 600 was 0.5% higher, also near a one-month high but London's FTSE 100 was down 0.1%, retreating after it hit its highest since 2019 earlier in the session.

Tech View: Long positive candle
A long bull candle was formed on the daily chart, which indicates an upside bounce in the market after a decline of a few sessions. After the formation of lower tops and bottoms on the daily chart, Nifty seems to have formed a higher bottom on Friday at 17,795 levels. But this needs to be confirmed with follow-through up move in the subsequent sessions.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trend on the counters of Bank of India, BHEL, L&T Finance Holdings and RIL, 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 signaling weakness ahead
The MACD showed bearish signs on the counters of Welspun Enterprises, Ugar Sugar Works, Jindal Stainless and Macrotech, 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
Infosys (Rs 1,699 crore), RIL (Rs 1278 crore), ICICI Bank (Rs 1466 crore) and TCS (Rs 952 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: 22.43 crore), Yes Bank (Shares traded: 13.36 crore), Suzlon Energy (Shares traded: 8.88 crore), and IDBI Bank (Shares traded: 6.06 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of CG Power, Godfrey Phillips, JSPL, REC and PFC witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure
Shares of Vodafone Idea, Galaxy Surfactants and Atul, among others, hit their 52-week lows on Tuesday, which signals bearish sentiment on the counter.

Sentiment meter favours bulls
Overall, market breadth favoured bulls as 2,044 stocks ended in the green, while 1,585 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)