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

Equity benchmark indices tumbled on Monday as investors offloaded finance, banking and energy stocks amid escalating tensions in the Middle East and surging crude oil prices overseas and higher US interest rate concerns. Investors stayed on the sidelines and refrained from taking risks amid uncertainty due to the Israel-Hamas conflict, analysts said

The NSE Nifty 50 index closed 0.72% lower at 19,512, while the S&P BSE Sensex fell 0.73% to 65,512.

All the 13 major sectoral indices logged losses. High-weightage banks and oil & gas lost over 1% each, while public sector banks shed 3.09%.

Here’s how analysts read the market pulse:

“On the hourly chart, the 200-SMA (placed around 19,670) acted as a significant resistance during Friday’s trading session, resulting in a decline in the index. On the downside, support is found in the range of 19,480 to 19,430. The market may continue to exhibit a “sell on the rise” sentiment until Nifty surpasses the 19,700 level,” said Rupak De, Senior Technical analyst at LKP Securities.

Shrikant Chouhan, Head of Research (Retail) at Kotak Securities, said, “Technically, after a gap down opening the Nifty traded below the 50-day SMA (Simple Moving Average) or 19605 level, which would be the immediate resistance zone. Above the same, the index could move up till 19700-19725 levels. While 19480 could be the crucial support zone for the traders, below the same it could retest the level of 19400-19390.”

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

US market
The S&P 500 and the Nasdaq fell on Monday as a deepening conflict between Israel and the Palestinian Islamist group Hamas roiled global markets and pushed investors toward safe-haven assets, while crude prices jumped over 3%.At 9:40 a.m. ET, the Dow Jones Industrial Average was down 12.14 points, or 0.04%, at 33,395.44, the S&P 500 was down 14.98 points, or 0.35%, at 4,293.52, and the Nasdaq Composite was down 127.02 points, or 0.95%, at 13,304.33.

The CBOE volatility index, Wall Street‘s “fear gauge”, also rose to 18.59, reflecting investor anxiety.

Major technology stocks Apple, Microsoft Alphabet, Nvidia and Amazon.com fell between 0.5% and 2.3%.

Traditional safe-haven assets including gold and the U.S. dollar gained, while crude prices increased.

European shares
Most major European stock markets opened lower on Monday as military clashes in the Middle East sparked a rush to safe-haven assets such as bonds and gold, while also boosting oil prices by over 3%.

The pan-European STOXX 600 index fell 0.2% by 0710 GMT, with chemical and travel & leisure sectors leading losses.

Global investors turned risk averse as military clashes between Israel and the Palestinian Islamist group Hamas deepened political uncertainty across the Middle East and raised concerns about oil supplies.

Tech View
Indicating a sell-on-rise mood in the market, Nifty on Monday lost 141 points and formed a small red candle with an upper shadow on the daily chart.

The formation of bullish hammer candle pattern of last week as per weekly timeframe chart is still intact. The index is expected to slide near to the low of the said hammer pattern around 19350-19450 levels in the short term before showing another round of upside bounce from the lows. Immediate resistance is placed at 19620 levels, said Nagaraj Shetti of HDFC Securities.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on the counters of Mahindra Holiday, Sobha, Home First Finance, Essel Propack, Eicher Motors, and Bajaj Finserv, 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 Crisil, Elgi Equipments, CCL Products, Apollo Hospital, Blue Star, and Dixon Technologies 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
TCS (Rs 1,546 crore), HDFC Bank (Rs 1,248 crore), RIL (Rs 872 crore), Axis Bank (Rs 678 crore), ICICI Bank (Rs 631 crore), Bajaj Finance (Rs 603 crore), and SBI (Rs 537 crore), among others, were 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
Tata Steel (Shares traded: 2.1 crore), ONGC (Shares traded: 1.4 crore), NTPC (Shares traded: 1 crore), SBI (Shares traded: 92 lakh), HDFC Bank (Shares traded: 82 lakh), Power Grid Corp (Shares traded: 78 lakh), and Axis Bank (Shares traded: 68 lakh) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of ITI, Oil India, Kaynes Technology, Angel One, MCX India, Vijaya Diagnostics, and Mahindra Holiday, 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, Adani Gas, and Campus Activewear, among others, hit their 52-week lows, signaling bearish sentiment on the counters.

Sentiment meter favours bears
Overall, market breadth favoured bears as 2,830 stocks ended in the red, while 977 names settled in the green.

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

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