Ahead of Market

`Mirroring a bearish trend in Asian markets, Indian equity indices ended lower for the fifth straight session on Thursday, also the monthly expiry day. Nifty index closed with a marginal loss of 43 points at 17,511. Sector-wise, PSU Bank index was the major gainer – up 0.50%, while Realty declined by around 2%. Globally, concerns over rate hikes by the US Federal Reserve unnerved investors, post the FOMC minutes release. 

Here's how analysts read the market pulse:

“Going ahead, the low of 17,455 is likely to act as immediate support for the falling Nifty. A decisive fall below 17,450 may trigger the resumption of the fall. In that case, it may fall down towards 17,200–17,150. However, failure to break down may induce a recovery towards 17,750–17,850, where the upper band of the falling channel lies,” said Rupak De, Senior Technical Analyst at LKP Securities.

The equity market traded cautiously between gains and losses as the minutes of the central bank policy meeting revealed concerns over high inflation and its commitment to bring inflation under control. In response to the heightened fears of rate hikes, the US 10 year treasury yield continued to stay high, near 4%. Additionally, the dollar index rose as the greenback cheered over hawkish Fed comments and rising geopolitical tensions,” said Vinod Nair, Head of Research at Geojit Financial Services.

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

1: US market

US stock indexes climbed on Thursday as a strong sales forecast from Nvidia boosted chipmakers and outweighed worries that the Federal Reserve will keep raising interest rates for longer after data highlighted a tight labor market. Nvidia Corp surged 14.3% to a more than 10-month high after the chip designer forecast quarterly sales above estimates and reported a surge in the use of its chips to power artificial intelligence services such as chatbots.At 10:10 a.m. ET, the Dow Jones Industrial Average was up 140.33 points, or 0.42%, at 33,185.42, the S&P 500 was up 23.46 points, or 0.59%, at 4,014.51, and the Nasdaq Composite was up 64.38 points, or 0.56%, at 11,571.45. Nine of the 11 major S&P 500 sectors gained.

2: European shares

European shares rose on Thursday, after two straight sessions of declines, as U.S. semiconductor designer Nvidia's positive sales forecast sparked a rally in chip stocks. The broader Europe STOXX 600 index rose 0.2%, with the technology sector jumping 1.4%. Chipmakers ASM International, BE Semiconductor and Aixtron rose between 1.3% and 2.8%. Engineering firm Rolls-Royce surged 18.0%, to the top of the STOXX 600, after the company's CEO forecast more profit growth in 2023 after last year's profit beat expectations.

3: Tech View: Small negative candle

A small negative candle was formed on the daily chart, which indicates a formation of high wave type candle pattern. Normally, such pattern formation after a reasonable downward correction signals possible upside bounce.“Nifty is currently placed near the crucial support of 17,400-17,300 levels and has recovered decently on the upside in the recent past,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.

4: Stocks showing bullish bias

Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on the counters of GAIL, Shipping Corporation of India, Religare Enterprises, Coforge and Nippon Life AMC 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.

5: Stocks signaling weakness ahead

The MACD showed bearish signs on the counters of L&T, Poonawalla Fincorp, Titan, H.G. Infra, and Action Construction Equipment India among others. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

6: Most active stocks in value terms

HDFC Bank (Rs 2,235 crore), Zee Entertainment (Rs 1,465 crore), Adani Enterprises (Rs 1,242 crore), RIL (1,080 crore) and HDFC (Rs 1,048 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.

7: Most active stocks in volume terms

Vodafone Idea (Shares traded: 20.03 crore), Zomato (Shares traded: 11.8 crore), Zee Entertainment (Shares traded: 7.65 crore), Yes Bank (Shares traded: 7.47 crore) and PNB (Shares traded: 5.93 crore) were among the most traded stocks in the session on NSE.

8: Stocks showing buying interest

Shares of Equitas SFB, Finolex Cables, ITC, Cyient and Blue Star among others witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

9: Stocks seeing selling pressure

Shares of Adani Transmission, Adani Gas, Adani Green Energy, Macrotech Developers and Zee Entertainment among others hit their 52-week lows, signaling bearish sentiment on the counters.

10: Sentiment meter favours bears

Overall, market breadth favoured bears as 1,580 stocks ended in the green, while 1,862 names settled with cuts.