Ahead of Market: 10 Things That Will Determine Stock Market Action on Wednesday

The Indian market ended lower on Tuesday, with the Sensex and Nifty retreating after briefly beating record levels in the previous session, as investors held on to gains and foreign funds continued to trim their exposure. A mix of profit-taking and external pressure kept the benchmarks under pressure. The S&P BSE Sensex fell 503.63 points, or 0.59%, to end at 85,138.27, retreating from Monday’s peak of 86,159.02. The NSE Nifty 50 fell 143.55 points, or 0.55%, to 26,032.20. Both indexes had risen to new 14-month highs on Monday, up about 0.5% each, before late-session profit-taking weakened momentum and set a softer tone for Tuesday’s open.

Here’s how analysts read the market pulse: Domestic markets continued to witness profit booking amid concerns over the weakening rupee and continued FII outflows, said Vinod Nair, head of research at Geojit Investments, adding that the rebalancing of the NSE’s sector index in line with Securities and Exchange Board of India regulations led to corrections in major banking stocks.

“In the near term, declining expectations of a rate cut by the Reserve Bank of India on the back of strong GDP data and uncertainty over US-India trade talks may keep investors cautious. Still, robust domestic macro fundamentals and improving earnings prospects for the second half of the fiscal should provide support,” said Vinod Nair, head of research at Geojit Investments.

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American markets

Wall Street stocks opened slightly higher on Tuesday after a day of losses as traders looked ahead to the release of key economic data this week.Markets are awaiting Wednesday’s monthly report on private sector jobs, followed by September inflation figures on Friday.

Expectations that the US Federal Reserve will cut borrowing costs next week have recently supported markets, helping them recover from early November losses caused by fears of a technology bubble.

The US market was pressured on Monday by declines in some technology and crypto stocks.

European markets

Britain’s FTSE 100 rose on Tuesday, lifted by financial shares after the Bank of England eased capital requirements for lenders in a bid to boost growth, while industrial shares recovered after a sharp fall in the previous session.

The blue-chip FTSE 100 rose 0.4% by 1119 GMT, while the mid-cap FTSE 250 was flat, reversing course after suffering its biggest single-day percentage decline in two weeks on Monday.

In Europe, the German DAX rose 0.5% around midday, while the CAC 40 in Paris added 0.2%. Britain’s FTSE 100 also rose 0.2%.

Technical view

The Nifty once again witnessed a day of subdued trading with a predominantly negative bias, said Rupak De, Senior Technical Analyst at LKP Securities, adding that the index continued to trade below the 21EMA on the hourly chart.

“A mild negative divergence on the daily chart has contributed to the recent weakness in momentum. On the hourly chart, a rising trendline provides immediate support; however, if Nifty falls below this trendline, a decline towards 25,900 could follow. On the other hand, resistance is at 26,150, and a move above this level could improve sentiment. Overall, bearish to sideways sentiment may persist in the coming days,” De said.

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Most active stocks in terms of turnover

Bajaj Housing Finance (Rs 4,221 crore), HDFC Bank (Rs 2,705 crore), Wockhardt (Rs 2,403 crore), RIL (Rs 1,766 crore), ICICI Bank (Rs 1,667 crore), Bharti Airtel (Rs 1,386 crore) and SBI (Rs 1,308 crore) were among the most active stocks by value BSE. Higher activity in a counter in terms of value can help identify the counters with the highest trading turnover per day.

Most active stocks by volume

Vodafone Idea (shares traded: Rs 64.9 crore), Bajaj Housing Finance (shares traded: Rs 43.95 crore), JP Power (shares traded: Rs 14.5 crore), YES Bank (shares traded: Rs 14 crore), Bank of Maharashtra (shares traded: Rs 10.85 crore), GMR Airports (shares traded: Rs 5.74 crore) and Canara Bank (shares traded: Rs 4.23 crore) were among the most actively traded stocks on NSE by volume.

Stocks that show buying interest

Shares of Balkrishna Industries, Akzo Nobel, Birlasoft, Schneider, Minda Corp, CE Info Systems and Natco Pharma were among the stocks that witnessed strong buying interest from market participants.

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52 Week High

More than 106 stocks hit their 52-week highs today, while 249 stocks fell to their 52-week lows. Canara Bank, Tata Motors CV and Asian Paints were among those that hit 52-week highs.

Stocks see selling pressure

Stocks that witnessed significant selling pressure were Advent Hotels International, Bajaj Housing Finance, GRSE, Welspun India, City Union Bank, Ather Energy and Saregama India.

Sentiment gauge bearish

Market sentiment was bearish. Of the 4,316 shares traded on the BSE on Tuesday, 2,677 shares saw a decline, 1,482 rose, while 157 shares remained unchanged.

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