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

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

Indian equities ended on a positive note on Thursday, despite weak global sentiment. The Nifty settled with a minor gain of 30 points at 19,465, while the Sensex added 137.5 points, ending at 65,539. Sectorally, the media, realty, and healthcare indices led, while the metal index ended with a decline of 0.94%. Investor sentiment has been affected due to a sharp rise in domestic inflation and the slow progress of the monsoon this month.

Here’s how analysts interpret the market pulse:

“Initial concerns arose from the unexpected surge in domestic CPI inflation, primarily due to higher food prices. This brought volatility to the Indian market. However, relief came when this inflation surge appeared transitory, leading to a recovery later in the trading session.

“Additionally, as core inflation continued its moderation, the market did not expect a rate hike, although an extended rate pause now seems more likely. Stronger-than-expected retail sales data in the US and concerns about further rating downgrades of US banks added to the volatility in Western markets. In contrast, Asian markets responded to the rate cut initiated by the Chinese central bank,” said Vinod Nair, Head of Research at Geojit Financial Services.

“The negative chart pattern with consecutive lower tops and bottoms remains. After forming a new lower bottom at 19257 on Monday, Nifty might be heading towards another lower top soon. The strong resistance is currently around 19550-19600 levels, and weakness might emerge from this week’s highs. The immediate support is around 19250-19300 levels,” explained Nagaraj Shetti from HDFC Securities.

With that in mind, here are some key indicators for Thursday’s action:

US market
The S&P 500 and Dow rose on Wednesday as Target results lifted the retail sector, while investors awaited minutes of the Federal Reserve’s July policy meeting for cues on the bank’s interest rate path.

Shares of Target jumped 6.3% after the big-box retailer’s second-quarter profit beat outweighed its annual forecast cut.Bigger rival Walmart, which is scheduled to report results on Thursday, rose 0.5%, while department stores Macy’s and Kohl’s gained 2.1% and 0.7%, respectively. Home Depot rose 1.2%.

At 9:55 a.m. ET, the Dow Jones Industrial Average was up 137.92 points, or 0.39%, at 35,084.31, the S&P 500 was up 5.03 points, or 0.11%, at 4,442.89, and the Nasdaq Composite was down 29.36 points, or 0.22%, at 13,601.68.

European shares
European shares reversed earlier losses on Wednesday, helped by a jump in insurers after positive results from British firms Aviva and Admiral Group and by easing bond yields.

The pan-European STOXX 600 advanced 0.2%, after closing at its lowest level in more than a month on Tuesday.

European insurers added 0.5% as Admiral Group jumped 8.0% after the British motor and home insurer posted a marginal rise in its first-half pre-tax profit.

Aviva rose 2.4% after the British insurer posted an 8% rise in first-half operating profit.

Dipping bond yields also helped gains, with German 10-year bond yields coming off a five-month peak.

Tech View: Small positive candle
A small positive candle formed on the daily chart with minor upper and lower shadows. Technically, this indicates a side-by-side bull candle type pattern. Yet, its placement isn’t ideal, making the sustainability of any upside bounce uncertain.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) indicated bullish trade for Cochin Shipyard, Garden Reach Shipbuilders, Dhanalakshmi Bank, and Infosys, among others. The MACD is known for signaling trend reversals; a MACD crossing above the signal line suggests potential upward movement.

Stocks signaling weakness ahead
The MACD showed bearish signs for Ujjivan SFB, BSE, Jubilant Foodworks, Castrol India, and Shriram Properties, among others. A bearish crossover on the MACD for these counters indicates the start of a potential downtrend.

Most active stocks in value terms
Interglobe Aviation (Rs 3103 crore), HDFC Bank (Rs 2725 crore), SBFC Finance (Rs 1818 crore), and Cochin Shipyard (Rs 1778 crore) were among the most active stocks on the NSE in terms of value.

Most active stocks in volume terms
IRFC (Shares traded: 20.75 crore), SBFC Finance (Shares traded: 20.44 crore), Reliance Power (Shares traded: 8.73 crore), Vodafone Idea (Shares traded: 8.17 crore), and IOB (Shares traded: 8.02 crore) were among the most traded stocks in the session on the NSE.

Stocks showing buying interest
Shares of SBFC Finance, GRSE, Cochin Shipyard, Mishra Dhatu Nigam, and PTC Industries scaled their fresh 52-week highs, reflecting bullish sentiment.

Stocks seeing selling pressure
Easy Trip Planners, Vedanta, UPL, Vishal Fabrics, and BKM Industries hit their 52-week lows, indicating bearish sentiment.

Sentiment meter favours bears
In a broader perspective, the market leaned slightly towards the bears, with 1,825 stocks ending in red and 1,814 settling in green.

(Disclaimer: The views and opinions expressed by the experts are their own and do not necessarily reflect those of Economic Times.)

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