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

The BSE Sensex tumbled for the fourth straight session on Wednesday after the Reserve Bank raised the key interest rates by 35 basis points while lowering the GDP growth forecast to 6.8% for the current fiscal. Besides, the central bank made it clear that it remained focussed on bringing down inflation that has stayed above the comfort zone for 10 straight months.

Subdued Asian markets and continued selling by foreign investors further weighed on investor sentiment, traders said. The 30-share BSE benchmark ended 216 lower at 62,410.68, while Nifty settled at 18,560.50.

Here's how analysts read the market pulse:

“The weakness with high volatility continued in Nifty on Wednesday and the market closed the day lower by 82 points amidst broader range movement. After opening with a negative note, the market witnessed sharp intraday selling pressure during its upside recovery attempt. Selling emerged again towards the end and Nifty closed near the lows,” Nagaraj Shetti, Technical Research Analyst, HDFC Securities, said.

“As the economy deals with the global headwinds, the RBI has become more realistic, lowering FY23 GDP growth forecast from 7% to 6.8%. The focus remains on fighting inflation, which will lead to increase in interest rates in future. Along with a global slowdown, corporate earnings forecasts for H2FY23 & FY24 can be downgraded,” Vinod Nair, Head of Research at Geojit Financial Services, said.

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

US market
US stock indexes fell in choppy trading on Wednesday as investors assessed the warnings of a looming recession from major Wall Street bankers, while Apple shares fell on analyst projections of lower iPhone shipments.

The benchmark S&P 500 fell for a fifth straight session and the Nasdaq for a fourth, dragged down by a 1.4% drop in Apple Inc shares on Morgan Stanley's iPhone shipment target cut due to production delays at a Foxconn plant in China.

At 9:54 a.m. ET, the Dow Jones Industrial Average was down 80.70 points, or 0.24%, at 33,515.64, the S&P 500 was down 12.07 points, or 0.31%, at 3,929.19, and the Nasdaq Composite was down 70.86 points, or 0.64%, at 10,944.03.

Concerns around a steep rise in borrowing costs have boosted the dollar and dented demand for risk assets such as equities this year, with the S&P 500 on course to snap a three-year winning streak, down 17.5% so far in 2022.

European shares
European shares slipped on Wednesday, with investors on edge as fears of a recession picked up steam, although the losses were limited by strength in the healthcare sector. The region-wide STOXX 600 index was down 0.2% at 0813 GMT, taking cues from a dismal trading session on Wall Street overnight after big US banks cautioned of a likely recession next year. Miners fell 1.4%, leading declines on the STOXX 600, followed by the energy sector, which shed about 1%.

Tech View: Small red candle
Nifty today formed a small bearish candle on the daily scale, which is broadly negative. The index has been making lower lows for the last four sessions and needs to negate to commence the fresh leg of rally.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Aakash Exploration, Siemens, Gokul Agro, LT Foods and Indian Bank, 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 signalling weakness ahead
The MACD showed bearish signs on the counters of ONGC, Reliance Industries, Lemon Tree, Tata Motors and Indus Towers, 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
Suzlon Energy (Rs 48.11 crore), CESC (Rs 44 crore), PNB (Rs 42.6 crore), Central Bank (Rs 40.35 crore) and HFCL (Rs 39 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
Suzlon Energy (Shares traded: 4.8 crore), Vodafone Idea (Shares traded: 2.83 crore), JP Power (Shares traded: 1.99 crore), Central Bank (Shares traded: 1.44 crore) and Yes Bank (Shares traded: 1.34 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of J&K Bank, Jyothy Labs, Star Cement, Dabur India and Ion Exchange witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.

Stocks seeing selling pressure
No shares hit their 52-week lows on Tuesday, which signals bearish sentiment on the counters.

Sentiment meter favours bears
Overall, market breadth favoured bears as 1,478 stocks ended in the green, while 2,038 names settled with cuts.

With inputs from PTI

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