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

Boosted by positive Q1 earnings by some counters and strong global cues, Indian equities rallied to fresh record highs for yet another session on Thursday. Nifty ended shy of 20,000 levels. Nonetheless, Friday’s session may be influenced by Infosys earnings wherein the IT behemoth sharply slashed its revenue guidance for FY24.

Here’s how analysts read the market pulse:

“Unlocking of value by heavy weights (like RIL & ITC) is apprising the main indices. The anticipation of a good Q1 results from banks is providing an extra boost to drive to new highs. Mixed cues from global peers is not disturbing the mood of the domestic market as FIIs’ inflows stay put to the prospects of the Indian economy,” said Vinod Nair, Head of Research at Geojit Financial Services.

“In the short term, the index is expected to stay positive. However, if it fails to surpass the 20,000 level, investors might engage in profit-taking. There is a support level at 19,800, which could attract buying interest during potential pullbacks,” said Rupak De, Senior Technical analyst at LKP Securities.

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

US market
The S&P 500 and Nasdaq fell on Thursday, as Tesla CEO’s hints about more price cuts deepened investor concerns, while Netflix slid on quarterly revenue miss.

Tesla CEO Elon Musk on Wednesday signalled that he would cut prices again on electric vehicles to boost demand in “turbulent times”, even as his all-out price war squeezes the company’s margins.

Shares of the electric car maker slid 4.6% after Musk’s comments, even as Tesla beat quarterly profit estimates.

Five of the top 11 S&P 500 sectors declined, led by losses in consumer discretionary stocks, down 1.3%. At 9:43 a.m. ET, the Dow Jones Industrial Average was up 159.63 points, or 0.46%, at 35,220.84, the S&P 500 was down 3.38 points, or 0.07%, at 4,562.34, and the Nasdaq Composite was down 55.32 points, or 0.39%, at 14,302.70.

European shares
European shares edged lower at open on Thursday, as investors assessed mixed earnings from companies in the region while disappointing results from U.S. heavyweights Tesla and Netflix also weighed on sentiment.

The pan-European STOXX 600 index was down 0.2% by 0705 GMT.

Frankfurt-listed shares of big U.S. names Netflix and Tesla fell 8.2% and 3.7% respectively, after disappointing results from both companies late on Wednesday.

Tech View: Long bull candle
A long bull candle was formed on the daily chart with minor lower shadow. Technically, this market action indicates sharp upside momentum for the market. Though, Nifty placed at the highs, there is no sign of any tiredness or reversal pattern building at the new highs. Hence, one may expect further upside in the short term.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on the counters of Bajaj Hindusthan, RVNL, NHPC, UCO Bank and HPCL 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 Zomato, Ujjivan Small Finance Bank, Transformers and Rectifiers (India), Time Technoplast and GSFC, among others.

Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value terms
HDFC Bank (Rs 4739 crore), RIL( Rs 5060 crore), Polycab India (Rs 2519 crore) and ICICI Bank (Rs 2611 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 highest trading turnovers in the day.

Most active stocks in volume terms
Suzlon Energy (Shares traded:24.26 crore), YES Bank (Shares traded: 21.43 crore), PNB (Shares traded: 9.78 crore) and Reliance Power (Shares traded: 11.27 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of Polycab India, Alembic Pharma, Glenmark Life, Mazagon Dock Shipbuilders and Suzlon Energy, 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 Shree Ram Proteins, Cell Point (India) and Penta Gold, among other stocks, hit their 52-week lows, signaling bearish sentiment on the counters.

Sentiment meter favours bears
Overall, market breadth favoured bears as 1,668 stocks ended in the green, while 1,710 names settled in the red.

(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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