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

Equity benchmarks extended their rally for the second straight session on Wednesday amid buying in index heavyweights HDFC twins and fresh foreign funds inflows. The 30-share BSE Sensex climbed 390 points to settle at 61,045.74. The broader NSE Nifty rallied 113 points or 0.62% to 18,165.35. The HDFC duo accounted for around half of the benchmark's gains. Healthy earnings so far coupled with expectation of a strong Union Budget before elections next year is supporting the sentiment on the D-Street.

Here's how analysts read the market pulse:
"After the adverse performance during the last one and a half months, the Indian market has been advancing in the last 2-3 trading days. The trend is supported by the marginal improvement in FII inflows and upside in domestic investments. The domestic investors are adopting a buy on dip strategy,” Vinod Nair, Head of Research at Geojit Financial Services, said.

"Nifty index has broken out strongly from a falling wedge pattern, which is a bullish reversal pattern. The bulls regained control and surpassed the 18,100 barrier, demonstrating strong momentum. The index remains in a buy-on-dip mode with support at 17,900, where fresh put writing has been witnessed. The index's next immediate resistance stands at 18,200, and a breach will see sharp short-term movement toward 18,500-18,600 levels,” Rupak De, Senior Technical Analyst at LKP Securities, said,

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

US market
Wall Street's main indexes rose on Wednesday after weak retail sales and further evidence of slowing inflation supported hopes of smaller rate hikes by the Federal Reserve, while Tesla shares gained for the second straight day.

A reading from the Commerce Department showed retail sales fell 1.1% in December against expectations of a 0.8% drop, while a separate report showed producer prices declined more than expected in December. Also boosting the S&P 500 and Nasdaq, Microsoft Corp rose 0.2% after the company said it would cut 10,000 jobs by the end of the third quarter of fiscal 2023.

Among major S&P 500 sectors, consumer discretionary stocks were up 1%, leading gains. At 9:49 a.m. ET, the Dow Jones Industrial Average was up 63.78 points, or 0.19%, at 33,974.63, the S&P 500 was up 14.36 points, or 0.36%, at 4,005.33, and the Nasdaq Composite was up 73.86 points, or 0.67%, at 11,168.98.

European shares
European shares advanced on Wednesday, as risk appetite was supported by a slew of positive earnings updates, setting the benchmark index on track for its longest winning streak since November 2021.

The pan-European STOXX 600 was up 0.3% by 0815 GMT, boosted by rate-sensitive technology stocks. The benchmark index has gained nearly 7.5% in an upbeat start to the year, spurred by hopes of a rebound in China's economy, easing price pressures, fall in natural gas futures and growing expectations of a milder-than-expected recession.

Tech View: Bullish candle
On the daily scale, Nifty today established a bullish candle. It was for the fourth time when the index made a higher high. Now, it has to hold above 18,081 zones for an up move towards 18,250 and 18,350 zones whereas supports are placed at 18,081 and 18,018 zones, said Chandan Taparia of Motial Oswal.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on the counters of MTNL, Coal India, Dhani Services, HDFC and JSW Steel 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 IDFC First Bank, Manappuram Finance, NCC, Capri Global Capital and Paytm, 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
HDFC Bank (Rs 1,557 crore), RIL (Rs 1,537 crore), Adani Enterprises (Rs 1,311 crore) and HDFC (Rs 1,034 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: 9.78 crore), Zomato (Shares traded: 8.45 crore), PNB (Shares traded: 6.86 crore), Tata Steel (Shares traded: 6.47 crore) and Nykaa (Shares traded: 5.26 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of L&T, IDFC, Edelweiss Financial, IIFL Finance and Swan Energy witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure
Shares of Nykaa, Quess Corp, Indus Towers, Gland Pharma, Balaji Amines were among those that witnessed strong selling pressure and hit their 52-week lows, signaling bearish sentiment on the counters.

Sentiment meter favours bulls
Overall, market breadth favoured bulls as 1,573 stocks ended in the red while 1,940 names settled with gains.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)