market outlook: Ahead of Market: 12 things that will decide stock action on Thursday

NEW DELHI: Profit-booking and concerns over gradually hawkish commentary from central banks pushed benchmark indices lower on Wednesday. Nonetheless, some sectors like metals saw buying.

Here’s how analysts read the market pulse:-

“Follow up buying was missing with slight recovery seen in the last hour,” said Chandan Taparia of Motilal Oswal Securities. Taparia said the index needs to hold above 17,200, for an up move towards 17,500 and 17,777 levels. He sees support at 17,150 and 17,000 levels.

Nagaraj Shetti, Technical Research Analyst, HDFC Securities said a long negative candle after a higher opening indicates a presence of strong resistance around 17,500 level.

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

Wall St opens lower

US stock indexes opened lower on Wednesday as oil prices rose and megacap shares fell, while investors assessed the outlook for US interest rates following calls from policymakers for bigger increases.

The Dow Jones Industrial Average fell 58.62 points, or 0.17%, at the open to 34,748.84.

The S&P 500 opened lower by 18.51 points, or 0.41%, at 4,493.10, while the Nasdaq Composite dropped 118.46 points, or 0.84%, to 13,990.35 at the opening bell.

European markets in the red

London’s benchmark FTSE 100 index was down 0.2 percent in afternoon trading as British finance minister Rishi Sunak said the UK economy would grow far slower than expected this year due to the Ukraine war and soaring global inflation.

In Frankfurt, the DAX was 1.5 percent lower while the Paris CAC 40 was shedding 1.3 percent.

Tech View: Bearish candle

Nifty50 on Wednesday formed a bearish candle on the daily scale and closed just above its 50-day moving average. Analysts said a follow-up buying was missing, which could have instilled confidence among traders. They see the index trading in a broad 17,100-500 range in the near future.

F&O: Resistance at 17,500

There was substantial accumulation of calls at 17,500, making it a major near-tem hurdle for Nifty while support existed at 17,000.

Stocks showing bullish bias

Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Lemon Tree Hotels, Adani Green, Gujarat Gas, Mphasis, Mishra Dhatu Nigam and Biocon.

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 Crompton Greaves Consumer, P&G Health, HUL, Godrej Agrovet, ABB India and Emami. 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 2,311 crore), Reliance Industries (Rs 1,817 crore), Tata Steel (Rs 1,726 crore), Adani Wilmar (Rs 1,248 crore), Infosys (Rs 1,163 crore), Tata Motors (Rs 1,120 crore) and SAIL (Rs 1,029 crore) were among the most active stocks on Dalal Street 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: 13 crore), L&T Financial Holdings (Shares traded: 11 crore), SAIL (Shares traded: 10 crore), YES Bank (Shares traded: 8 crore), IDFC First Bank (Shares traded: 7 crore) and Adai Power (Shares traded: 7 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest

Suven Pharma, Linde India, JSPL, Cummins India, Orient Refractories, Chola INvestment Finance and Century Ply witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure

Dhani Services, Future Retail and P&G Health witnessed strong selling pressure and hit their 52-week lows, signaling bearish sentiment on the counters.

Sentiment meter favours bears

Overall, market breadth favoured losers as 1,463 stocks ended in the green, while 1,935 names settled with cuts.

Market Watch: Is there a lack of conviction at current valuations after last week’s rally?

After starting the day on a firm footing, domestic equity markets surrendered gains on profit booking as concerns over a continued rise in global crude oil prices and the prospect of faster rate hikes in the US took a toll on risk appetite. The BSE barometer Sensex gyrated in a band of 848 points to settle 305 points lower at 57,684.82. The index had briefly topped the 58,400 level. Over the past five trading days, the Sensex has added 868 points. Its broader peer, the Nifty50 swung 243 points before ending 70 points lower at 17,245.65. The index breached the 17,400 mark during trade.

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