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

Benchmark equity indices ended lower on Wednesday after three days of gain amid profit-taking ahead of the June inflation print, which came in higher owing to high food prices.
Fag-end selling pulled down 30-share BSE Sensex by 223.94 points or 0.34% to settle at 65,393.90.Nifty closed below 19,400 levels, with a cut of 55 points or 0.28%. Meanwhile, broader markets outperformed their headline peers. Among top Nifty gainers were stocks like ONGC, Eicher Motors, JSW Steel, Nestle and Kotak Mahindra Bank.

Here’s how analysts read the market pulse:

“The range-bound movement in the Indian indices was influenced by the likelihood of subdued IT earnings. While optimism about moderation in US inflation supported the broad index. Further, an uptick in domestic food inflation on the back of mandi prices trending above MSP and muted Kharif sowing forced the investors to be cautious. Monsoon progress and the Kharif sowing trend in July are the keys to the future inflation trend,” said Vinod Nair, Head of Research at Geojit Financial Services.

“Despite a bearish signal, the overall trend remains positive as long as the price stays above the support level at 19,300. It is a level (19300) where Put writers have maintained heavy positions, meaning that if the price drops below this level, it could indicate further downward movement. Below 19300 Nifty may fall down towards 19000-18900. On the upside, there is resistance at 19500, suggesting that the price may struggle to move beyond this level. A decisive move above 19500 might lead the writers to unwind their positions,” Rupak De, Senior Technical analyst at LKP Securities, said.

That said, here’s a look at what some key indicators are suggesting for Thursday’s action:US stocks
Wall Street rallied on Wednesday, led by gains in rate-sensitive megacap growth stocks after data showed inflation cooled further in June and boosted hopes that the Federal Reserve was nearing the end of its monetary tightening cycle.

U.S. consumer prices rose modestly in June and logged their smallest annual increase in more than two years as inflation continued to subside.

At 09:46 a.m. ET, the Dow Jones Industrial Average was up 282.05 points, or 0.82%, at 34,543.47, the S&P 500 was up 40.07 points, or 0.90%, at 4,479.33, and the Nasdaq Composite was up 161.15 points, or 1.17%, at 13,921.85.

Megacap growth and technology stocks such as Microsoft , Amazon.com and Tesla added between 1.2% and 1.6%.

Ten of the 11 major S&P 500 sectors advanced, led by gains in consumer discretionary stocks that added 1.1% in early trading.

European shares
European shares extended gains on Wednesday as further evidence of easing consumer inflation in the United States boosted hopes that the Federal Reserve could end its market-punishing interest rate hikes soon.

The pan-European STOXX 600 index rose as much as 1.3% after the inflation data and was last up around 1% by 13:01 GMT, extending gains to the fourth straight day.

Tech View: Long negative candle
A long negative candle was formed on the daily chart, which is indicating a lack of strength in the market to surpass the crucial overhead resistance of 19500. The Nifty remained in a broader high low range of 19500-19300 levels as of now. As per its range movement, the market is placed at the immediate support of 19300 levels.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on the counters of Engineers India, Elgi Equipments, NALCO, HUDCO and Coffee Day Enterprises, 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 NTPC, DLF, Bombay Dyeing, Wockhardt and L&T 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
HDFC (Rs 11567 crore), HDFC Bank (Rs 5832 crore), LTIMindtree (Rs 2440 crore), RIL( Rs 2405 crore) and Mazagon Dock Shipbuilders (Rs 2293 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

Suzlon Energy (Shares traded: 20.19 crore), Reliance Power (Shares traded: 20.12 crore), YES Bank (Shares traded: 13.12 crore), Delta Corp (Shares traded: 8.21 crore) and Zomato (Shares traded: 6.42 crore) among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of Mazagon Dock Shipbuilders, BSE, NCC, JB Chemicals and Mankind Pharma, 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 Pentagon Rubber, Cell Point and Jet Airways 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 1,697 stocks ended in the green, while 1,774 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)

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