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Ahead of Market: 10 things that will decide D-Street action on Monday hot news

Equity benchmark Sensex on Friday rallied around 556 points, logging its best single day in two months, while Nifty closed above the 19,400 level on value-buying in power, metal, and oil stocks following strong domestic macro data and global cues. The BSE barometer closed higher by 555.75 points or 0.86% at 65,387.16 with 26 of its constituents ending in the green.

Here’s how analysts read the market pulse:
“Investor sentiments were mostly cloudy due to mixed market trends on the global and domestic fronts. Concerns about the progress of US policy measures weighed on both domestic and global markets after the Fed Chair expressed his commitment to managing inflation within target bounds. As the week progressed, investors regained optimism regarding a policy rate hike pause following the arrival of subdued economic data. However, the impact of the same on the domestic market was limited as investors awaited domestic GDP data.

The domestic market witnessed a significant rally at the end of the week, driven by higher-than-expected domestic manufacturing PMI and positive GDP growth data, reflecting a robust economic outlook. Favourable global cues also played a role in this upturn,” Vinod Nair, Head of Research at Geojit Financial Services, said.

“On the weekly charts, the Nifty closed in the green after falling for five consecutive weeks, indicating that the index has reached a zone from where buying interest emerged. Considering the above parameters, we change our short-term outlook on the index to positive. On the upside, we expect the Nifty to target levels of 19650. In terms of levels, the crucial support zone is at 19330 – 19300, and the immediate hurdle is placed at 19520 – 19550,” Jatin Gedia, Sharekhan, said.

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

Wall Street Watch
US stock indexes settled for a mixed close and benchmark Treasury yields rebounded after a US jobs report showed an uptick in unemployment, cementing expectations that the Federal Reserve will let interest rates stand at its September meeting.

The three major indexes gave up earlier advances, losing momentum as the session progressed and investors digested the data ahead of the long U.S. holiday weekend.The S&P 500 and the Dow ended modestly green, while the tech-laded Nasdaq closed nearly unchanged. All three indexes notched gains on the week.

European Shares
European shares were flat on Friday as a decline in luxury firms and automakers offset gains in commodity-linked sectors, while Danish drugmaker Novo Nordisk dethroned LVMH as Europe’s most valuable listed company.

The pan-European STOXX 600 closed flat, although notching its best weekly gain of 1.5% since mid July, as China-exposed stocks lifted sentiment this week on signs of more stimulus measures from Beijing.

Tech View: Long bull candle
A long bull candle was formed on the daily chart that engulfed the negative candle of the previous session. Technically, this action signals a bullish engulfing pattern but not a classical one. After showing a false downside breakout of 19,250 levels on Thursday, the market seems to have reversed sharply on the upside.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on the counters of YES Bank, PNB, GAIL, IRFC and JM Financial, 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 UCO Bank, Central Bank, Electronics Mart, J&K Bank and New India Assurance, among others. A bearish crossover on the MACD on these counters indicated that they had just begun their downward journey.

Most active stocks in value terms
MRF (Rs 107990 crore), Page Industries (Rs 39889 crore), Honeywell Automation (Rs 39266 crore), 3M India (Rs 31159 crore), and Shree Cements (Rs 24004 crore), among others, 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: 72.33 crores), YES Bank (Shares traded: 39.23 crores), IRFC (Shares traded: 23.6 crore), Suzlon Energy (Shares traded: 20.91 crore), and BHEL (Shares traded: 19.23 crore), among others, were among the most traded stocks on NSE.

Stocks showing buying interest
Shares of IRFC, BHEL, MTAR Technologies, Vodafone Idea, and Railtel Corporation, 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 GNA Axles, TCNS Clothing, Penta Gold, and Orient Bell, among others, hit their 52-week lows, signaling bearish sentiment on the counters.
Sentiment meter favours bulls.

Overall, market breadth favoured bulls as 2,124 stocks ended in the green, while 1,554 names settled with cuts.

(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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