Domestic benchmark equity indices advanced on Tuesday, led by IT stocks on prospects of a soft landing in the US economy improving and supported by a sustained rally in oil marketing companies.

The NSE Nifty 50 index added 0.72% at 21,929, while the S&P BSE Sensex edged up 0.63% to 72,186.

Here’s how analysts read the market pulse:
“Nifty exhibited a predominantly sideways trend throughout the day, with traders expressing uncertainty regarding the market’s direction. A range-bound movement is expected to persist until a breakout occurs on either side. A decisive upward move beyond 21,950 has the potential to propel the Nifty towards 22,200. Conversely, a decline below 21,850 could instigate a correction towards the 21,700 level,” said Rupak De, LKP Securities.

Osho Krishan, Angel One, said, “The chart structure construes a range-bound activity to continue, with a strong nearby resistance at the 22,000 mark, followed by 22,100. And a decisive breakthrough could only trigger the next leg of rally in the Nifty50 index. On the contrary, 21,800-21,750 remains the intermediate support, while the 20 DEMA placed around 21,650 is to be seen as a sacrosanct support zone for the comparable period.”

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

US market
Wall Street’s main indexes inched higher on Tuesday as investors parsed big-ticket earnings and awaited commentary from policymakers for clues on the timing of the Federal Reserve’s first interest-rate cut.

Eli Lilly jumped 3.5% after forecasting 2024 profit above estimates, driven by demand for its blockbuster weight-loss drug Zepbound and diabetes medicine Mounjaro.

With around half of the S&P 500 companies having reported earnings, 80.4% have surpassed expectations, according to LSEG data last week. Overall S&P 500 earnings are now expected to have risen 7.8% in the fourth quarter from the year-ago quarter.

At 9:53 a.m. ET, the Dow Jones Industrial Average was up 130.09 points, or 0.34%, at 38,510.21, the S&P 500 was up 9.50 points, or 0.19%, at 4,952.31, and the Nasdaq Composite was up 16.48 points, or 0.11%, at 15,614.16.

European shares
European stocks rose, bolstered by strong results from BP Plc, while global bond markets steadied after the biggest two-day selloff in months.

BP rallied 6% as the oil major announced plans to repurchase $3.5 billion of shares in first half. UBS Group AG retreated after earnings disappointed analysts. US equity futures ticked higher. Ten-year Treasuries held at 4.14% after yields soared about 14 basis points in the previous session. The dollar retreated for the first day in three.

In Europe, the Stoxx 600 benchmark climbed 0.5%. Futures contracts for the S&P 500 added 0.1%.

Tech View: Hammer candlestick pattern

Suggesting a bullish momentum in the index that could take it to fresh peaks, Nifty on Tuesday ended 158 points higher and formed a hammer candlestick pattern on the daily charts.

Minor positive patterns like higher tops and bottoms are intact and the market is now on the way up towards the new higher top formation at new all-time highs. The crucial opening downside gap of 17th January is now placed on the verge of a decisive upside breakout at 21,970 levels. Immediate support is at 21,750 and the next overhead resistance to be watched around is 22,125 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 Gland Pharma, Ipca Labs, HPCL, TCS, Easy Trip Planners, and Vedanta, 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 signalling weakness ahead
The MACD showed bearish signs on the counters of HFCL, Max Financial, Vaibhav Global, Lemon Tree Hotels, JK Paper, and Bharti Airtel 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
HDFC Bank (Rs 2,961 crore), TCS (Rs 1,837 crore), Bajaj Finance (Rs 1,611 crore), BPCL (Rs 1,349 crore), ICICI Bank (Rs 1,323 crore), Infosys (Rs 1,321 crore), and RIL (Rs 1,293 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 the highest trading turnovers in the day.

Most active stocks in volume terms
Tata Steel (Shares traded: 5.3 crore), ONGC (Shares traded: 3.6 crore), Power Grid (Shares traded: 2.9 crore), BPCL (Shares traded: 2.2 crore), HDFC Bank (Shares traded: 2 crore), ITC (Shares traded: 1.8 crore), and HDFC Life (Shares traded: 1.5 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of BPCL, HCL Tech, TCS, ONGC, Infosys, Tata Steel, and Coal India, among others, witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.

Stocks seeing selling pressure
Shares of Vinati Organics, Sharda Cropchem, SBI Card, Navin Fluorine, and UPL hit their 52-week lows, signalling bearish sentiment on the counters.

Sentiment meter favours bulls
Overall, market breadth favoured bulls as 2,296 stocks ended in the green, while 1,574 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)

(You can now subscribe to our ETMarkets WhatsApp channel)


Source link