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

The benchmark indices ended Thursday’s session in the red, with Nifty still holding on to 18,050 levels. Broader markets, however, outperformed the headline indices.

Amit Trivedi, CMT, Technical Analyst - Institutional Equities, Yes Securities, said “Nifty remained weak for the consecutive session. After a negative start, Nifty recouped early losses but failed to sustain above levels of 1,8100. Eventually the Nifty ended lower, closing its upward gap which was formed on 1st November.”


Nagaraj Shetti, Technical Research Analyst, HDFC Securities, said “After showing weakness from the swing highs on Wednesday, Nifty shifted into a consolidation with weak bias on Thursday and closed the day lower by 30 points. After opening on a weak note, the market showed upside recovery from the intraday lows in the early part of the session. It later shifted into a narrow range movement for the better part of the session.”

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


US market
US stocks extended losses on Thursday as investors feared the Federal Reserve was far from signaling a less hawkish stance in its fight against inflation.

Stocks initially received a boost on Wednesday after the Fed raised interest rates by 75 basis points as expected and the policy announcement left open the possibility of smaller increments in the future. The gains, however, evaporated as Fed Chair Jerome Powell said it was "very premature" to discuss when the central bank might pause the rate hikes.

The benchmark S&P 500 marked its biggest percentage decline in almost a month with a 2.5% loss in the previous session.

While traders are still split between the odds of a 50 bps and 75 bps rate hike in December, the peak Fed funds rate is seen climbing to 5% or higher next year, compared with a prior estimate of 4.50%-4.75% rise.

Another set of data on Thursday showed the US services industry grew at its slowest pace in nearly 2-1/2 years in October and businesses continued to face higher input prices, confirming that inflation was shifting to services from goods.

At 9:46 a.m. ET, the Dow Jones Industrial Average was down 218.25 points, or 0.68%, at 31,929.51, the S&P 500 was down 42.28 points, or 1.12%, at 3,717.41, and the Nasdaq Composite was down 146.95 points, or 1.40%, at 10,377.85.

European shares
European shares fell on Thursday, led by technology shares, after the Federal Reserve hinted at smaller interest rate increases for longer, dampening hopes of a downshift in its aggressive fight against inflation.

The pan-European STOXX 600 dropped 0.9% by 0905 GMT, with rate-sensitive European technology stocks falling nearly 2%. While most major European sector indexes slid, banks edged 0.3% higher.

Tech View: Positive candle
The index formed a small positive candle on the daily chart with minor upper shadow, indicating buy on dips opportunity in the market at the highs.“Now, it has to hold above 18,000 zones, for an up move towards 18,200 then 18,350 zones whereas supports are placed at 17,950 and 17,888 zones,” said Chandan Taparia of Motilal Oswal Financial Services.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed a bullish trend in the counters of M&M Financial, Raymond, Mazagon Dock, Sequent Scientific, Yes Bank and Federal Bank 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 signalling weakness ahead
The MACD showed bearish signs on the counters of Axis Bank, PNB Housing, Blue Star, NHPC and Aarti Drugs among others.

Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value term
Mazagon Dock (Rs 1,996 crore), SBI (Rs 1,021 crore), M&M Financial (Rs 975 crore), and Axis Bank (Rs 885 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: 14.05 crore), PNB (Shares traded: 10.42 crore), UCO Bank (Shares traded: 6.72 crore), IDFC First Bank (Shares traded: 5.95 crore) and Bank of India (Shares traded: 4.57 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of RITES, Raymond, RVNL,UCO Bank and Varun Beverages, 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 Relaxo Footwear, Intellect Design, Symphony, Motilal Oswal and Amber Enterprises counter witnessed strong selling pressure and hit its 52-week lows, signaling bearish sentiment on the counters.

Sentiment meter favours bears
Overall, market breadth favoured losers as 1,679 stocks ended in the green, while 1,780 names ended 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)