NEW DELHI: Domestic equity indices saw a gap-up opening on Wednesday, but quickly gave up all gains in the afternoon session amid selling pressure in financial stocks. The headline indices ended in the red for the third straight session and settled below their crucial psychological levels.
Nifty moved in a range of 130 points and formed a small bearish candle with a long upper wick, indicating selling pressure at higher levels. Analysts said the 15,700 level may act as immediate resistance for the index.
Here’s how analysts read the market pulse:
Shrikant Chouhan of Kotak Securities said that the index has formed a ‘double top’ at 15,835, which indicates it may fall to 15,650-156,20 levels. “As the underlying trend of the market is still positive, our strategy should be to buy into any selling towards 15,650-15,600 range,” he said.
Mazhar Mohammad of Chartviewindia.in, said, Nifty is directionless and stuck in a broad range of 15,900-15,700. “In case Nifty slips below 15,700, the correction may get accelerated with targets towards the 15,550 level. Bullish sentiment for the near term shall get strengthened on a close above 15,900 levels,” he said.
That said, here’s a look at what some of the key indicators are suggesting for Thursday’s action:
Wall Street near record high
The S&P 500 traded near an all-time high on Wednesday as data showed US private payrolls increased solidly in June, while the major US stock averages look to wrap up their fifth straight quarter of gains. The Dow Jones Industrial Average rose 60.90 points or 0.18 per cent to 34,353.19. The S&P 500 declined 2.80 points, or 0.07 per cent, to 4,289.00, near its all-time high of 4,300.52. The Nasdaq Composite dropped 40.22 points, or 0.28 per cent, to 14,488.11.
European shares suffer losses
European stocks fell even as consumer confidence in the continent surged to a 21-year-high in June. The pan-European STOXX 600 index lost 0.45 per cent. The German DAX fell 116.28, or 0.74 per cent, and London’s FTSE 100 fell 41.47, or 0.59 per cent.
The European benchmark, which hit record highs this month, remains on course, however, to post its biggest first-half percentage gain since 1998. Euro zone inflation eased in June in line with forecasts but is expected to move well above the European Central Bank’s target towards the autumn on higher commodity prices.
Tech View: Nifty slips below 20-DMA
The index managed to defend its immediate support at 15,700, but slipped below the 20-day simple moving average on a closing basis. The 15,700 level may keep offering some support to the index, analysts said. They see resistance for Nifty50 at 15,840 level.
Check out the candlestick formations in the latest trading sessions
ETMarkets.comF&O: Nifty’s immediate range seen at 15,600-15,900 levels
India VIX moved up 0.35% from 13 to 13.04 level. The fear gauge failed to move above 16-16.50 zone in the last three weeks and hovered near its lowest point of last 17 months. Lower volatility indicated an overall bullish market bias, but a small bounce in VIX can give some volatile cues to the market.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Spicejet, PNC Infratech, KNR Constructions, Uflex, Zee Media Corp, Time Technoplast,
, Sun Pharma, Aditya Birla Fashion, KPIT Technologies, Zensar Technologies, Deepak Nitrite, Dilip Buildcon, Apex Frozen Foods, Sumit Woods, Emami, Triveni Turbine, SBI Life Insurance, STL Global, Hexa Tradex, Dr. Reddy’s Labs, Emami Realty, Can Fin Homes, Morarjee Textiles, Suven Pharmaceutical, Dalmia Bharat, Power Mech Projects, Prime Securities, Neogen Chemicals, Ceat, Ipca Laboratorie, Aarti Surfactants, TTK Healthcare, Bharat Rasayan, , TTK Prestige, Asian Hotels (West), Cera Sanitaryware and Lakshmi Machines.
The MACD is known for signalling 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 Himadri Speciality, HUDCO, Axis Bank, IFCI, Rolta India, HCL Technologies, Gujarat Gas, Action Construction, Aries Agro, Nila Spaces, Setco Automotive,
, Prestige Estates, , , Tilaknagar Industries, Bajaj Finserv, Relaxo Footwears, CARE Ratings, Dixon Technologies, Minda Industries, Vardhman Acrylics, Prataap Snacks, Deccan Cements, Mangalam Cement, 5Paisa Capital, Sundaram Finance, Sheela Foam and Bafna Pharmaceutical. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.
Wednesday’s most active stocks in value terms
RIL (Rs 1,922.49 crore), Kotak Bank (Rs 1,513.70 crore), Infosys (Rs 958.75 crore), Tata Steel (Rs 948.88 crore), ICICI Bank (Rs 907.03 crore), Happiest Minds (Rs 841.59 crore), SBI (Rs 773.85 crore), Bajaj Finance (Rs 744.30 crore), HDFC Bank (Rs 726.42 crore) and Cipla (Rs 705.07 crore) were among the most active stocks on Dalal Street in value terms. Higher activity on a counter in value terms can help identify the counters with highest trading turnovers in the day.
Wednesday’s most active stocks in volume terms
Vodafone Idea (Shares traded: 20.21 crore), Reliance Comm (Shares traded: 13.63 crore), YES Bank (Shares traded: 10.64 crore), JP Power (Shares traded: 9.89 crore), Central Bank (Shares traded: 9.87 crore), IOB (Shares traded: 8.96 crore), PNB (Shares traded: 8.82 crore), IDFC First Bank (Shares traded: 8.36 crore), GMR Infra (Shares traded: 6.98 crore) and Suzlon Energy (Shares traded: 5.81 crore) were among the most traded stocks in the session.
Stocks showing buying interest
Bharat Rasayan, PNC Infratech,
, IOB and Central Bank witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.
Stocks seeing selling pressure
Krishna Institute of Medical Sciences, Shyam Metalics and Energy and Uttam Galva Steels witnessed strong selling pressure and hit their 52-week lows, signalling bearish sentiment on these counters.
Sentiment meter favours bears
Overall, the market breadth remained in favour of the bears. As many as 234 stocks on the BSE500 index settled the day in the green, while 265 settled the day in the red.
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