The Indian equities ended Thursday’s session on a weak note even as the US Fed hiked key policy rates on expected lines, Nifty ended at 19,660 points. Sectorally, Pharma and Realty emerged as outliers, while private bank and Oil and Gas indices ended with the most cut
Here’s how analysts read the market pulse:
“The FOMC’s decision aligned with market expectations as they implemented a 25bps hike and expressed a data-centric approach for future rate actions. Positive global sentiment prevailed due to the reduced prospects of a US recession. Despite this, the domestic market witnessed sharp correction led by banks and autos, while pharma stocks performed on a positive start to their earnings season,” Vinod Nair, Head of Research at Geojit Financial Services, said.
“The short-term trend of Nifty seems to have reversed down and more weakness could be in store for the coming sessions. There is a possibility of important cluster support for the market around 19,500-19,450 levels. Any rise from here could find strong resistance at 19,850 levels,” Nagaraj Shetti, Technical Research Analyst, at HDFC Securities, said.
That said, here’s a look at what some key indicators are suggesting for Friday’s action:
Wall Street rises on Meta boost
Wall Street’s main indexes surged on Thursday on hopes that the Federal Reserve’s policy tightening was ending and the world’s largest economy was heading for a soft landing, while Meta Platforms jumped on strong third-quarter revenue forecast.
Meta gained 8.2% after it also reported a jump in second-quarter advertising revenue, topping Wall Street financial targets.
European stocks close sharply higher
European stocks rose sharply on Thursday, with Frankfurt closing at a record high, after the ECB signalled it may have reached a peak in interest rate hikes.
Frankfurt’s DAX 40 index rose 1.7 percent to close at a record 16,406.03 points, while the CAC 40 in Paris jumped 2.1 percent. London’s FTSE 100 added 0.2 percent, dragged down by energy and telecoms stocks.
Tech View: Long bear candle
A long bear candle was formed on the daily chart with a minor lower shadow. Technically, this market action indicates a reversal pattern after a small rise. Currently, Nifty closed below the immediate support of 10-day EMA at 19680 levels, which is after sustaining above it for 21 consecutive sessions. Further weakness from here, the market could slide down to its crucial lower support of 20-day EMA around 19,500 levels. This moving average has been offering support for the Nifty for the past three months.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on the counters of IFCI, MMTC, Manappuram Finance, Tata Motors, and Power Grid Corporation 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 HPCL, IndusInd Bank, TCPL, HDFC AMC, and Xchanging Solutions among others.
A 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 5021 crore), ICICI Bank (Rs 2576 crore), RIL( Rs 2161 crore) and Tech Mahindra (Rs 1940 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 the highest trading turnovers in the day.
Most active stocks in volume terms
Vodafone Idea (Shares traded: 34.93 crores), Suzlon Energy(Shares traded: 25.07 crore), Reliance Power (Shares traded: 24.6 crores), and PNB (Shares traded: 9.56 crore) were among the most traded stocks in the session on NSE.
Stocks showing buying interest
Shares of Cipla, REC, Raymond, Colgate-Palmolive and Birlasoft 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 Rajesh Exports, Campus Activewear, Pentagon Rubber and Viji Finance among others stocks that hit their 52-week lows, signaling bearish sentiment on the counters.
Sentiment meter favours bears
Overall, market breadth favoured bears as 1,680 stocks ended in the green, while 1,894 names settled in the red.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)