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

    Synopsis

    “Indian shares opened lower on Friday, dragged by losses across most sectors, on recession fears in the US and hawkish commentary by major central banks, following their US counterpart. US retail sales in November fell more than expected, suggesting higher borrowing costs and fears of an imminent recession are hurting household spending in the world's largest economy,” Mohit Nigam, Fund Manager & Head, Hem Securities, said.

    Ahead of Market: 10 things that will decide stock action on MondayETMarkets.com
    Domestic indices continued to trade with losses for the second straight session on Friday after the hawkish US Fed monetary policy outcome. Nifty fell below its key support level and ended below 18,300. Meanwhile, among sectoral indices, Nifty PSU Bank fell the most by around 3% amid profit booking.

    Here's how analysts read the market pulse:

    "Nifty remained volatile with a bearish bias during the day as it slipped below the support of 18350. The momentum indicator RSI(14) is in a bearish crossover and falling with a current reading of 44, suggesting an extension of a bearish momentum. The short-term trend is likely to remain bearish till the index sustains below 18500. On the lower end, support is pegged at 18100-18000,” Rupak De, Senior Technical Analyst at LKP Securities, said.

    “Indian shares opened lower on Friday, dragged by losses across most sectors, on recession fears in the US and hawkish commentary by major central banks, following their US counterpart. US retail sales in November fell more than expected, suggesting higher borrowing costs and fears of an imminent recession are hurting household spending in the world's largest economy,” Mohit Nigam, Fund Manager & Head, Hem Securities, said.

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

    Wall Street
    US stocks suffered their longest weekly losing streak since September, with investors concerned that the Federal Reserve’s resolve to keep raising rates could tip the economy into a recession.

    The S&P 500 and the tech-heavy Nasdaq 100 closed the session lower for a third day. The quarterly triple witching expiration of equity derivatives also amplified market moves on Friday.

    European markets

    European shares slid on Friday, ending the week sharply lower after major central banks flagged further rate hikes, while economic activity data from the euro zone failed to assuage concerns of a looming recession.

    The Europe-wide STOXX 600 index closed 1.2% lower on Friday, ending the week with a loss of nearly 3.3%.

    Italy's FTSE MIB slipped 0.2% by close, extending losses for third straight week. UK's blue-chip FTSE 100 fell 1.3% after British retail sales fell unexpectedly in November as high borrowing costs eat into household finances.Healthcare stocks weighed on the STOXX 600, with pharmaceutical companies such as Bayer AG and AstraZeneca falling 3.8% and 1.8%, respectively.

    Tech View: Bearish candle
    Headline equity index Nifty on Friday formed a bearish candle with a long upper shadow on the daily chart. Now till it holds below 18350, weakness could be seen towards 18081 and 18000 zones, whereas hurdles are placed at 18350 and 18442 zones, said Chandan Taparia of Motilal Oswal.

    Stocks showing bullish bias
    Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Ugar Sugar Works, KCP Sugar, Dwarikesh Sugar and Kothari Sugar 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 PNB, Bank of India, Indian Oil Corporation, HUDCO and L&T Finance Holdings 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
    Tata Motors (Rs 2,142 crore), GMM Pfaudler (Rs 2,071 crore), RIL (Rs 1,888 crore ) Infosys (Rs 1,470 crore) and Dr. Reddy’s (Rs 1,450 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: 48.36 crore), UCO Bank (Shares traded: 27.79 crore), Suzlon Energy (Shares traded: 25.49 crore), and IOB (Shares traded: 21.24 crore) were among the most traded stocks in the session on NSE.

    Stocks showing buying interest
    Shares of Raymond, Kalyan Jewellers, Mahindra CIE, Aegis Logistics and UCO Bank among others witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

    Stocks seeing selling pressure
    Shares of Metropolis Health, Aarti Industries, Aurobindo Pharma, SIS India, Laurus Labs and Keystone Realtors hit their 52-week lows on Tuesday, which signals bearish sentiment on the counter.

    Sentiment meter favours bears
    Overall, market breadth favoured bears as 1,344 stocks ended in the green, while 2,213 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)



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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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