Indian benchmark equity indices, Sensex and Nifty50, recorded their biggest single-day decline in nearly three weeks on Tuesday, dragged down by slowing corporate earnings and ongoing foreign selling.
The NSE Nifty 50 fell 1.25% to 24,472, while the BSE Sensex shed 1.15% to 80,220. Both benchmarks gained approximately 0.4% in the first hour of trading before reversing those gains, marking their worst session since October 3.
Here's how analysts read the market pulse:
"The Nifty slipped from the head and shoulder pattern on the daily timeframe, leading to a sharp fall during the day. Sentiment further weakened after the Nifty broke below the crucial support level of 24,700. The sentiment may remain weak as long as the index stays below 24,700, with a "sell on rise" strategy favored by market participants. The index has fallen below the 100 EMA for the first time since early June of this year. On the lower end, support is placed at 24,400, and if the index falls below this level, it may extend its correction towards 24,000," said Rupak De of LKP Securities.
Jatin Gedia of Sharekhan, said, "On the daily charts Nifty has slipped decisively below the 20-week average (24718) which is a sign of weakness. Daily and hourly momentum indicators possess a negative crossover which is a sell signal. Thus, both price and momentum indicator suggest towards weakness. On the downside, we expect the Nifty to drift towards 24000 where there is a high concentration of open interest on the put side implying support. On the upside, 24900 – 25000 shall act as a crucial resistance from short term perspective."
That said, here’s a look at what some key indicators are suggesting for Wednesday's action:
US market:
U.S. stock indexes fell on Tuesday as rising Treasury yields affected rate-sensitive sectors, prompting investors to evaluate earnings to gauge the health of American companies.
Verizon was the biggest loser on the blue-chip Dow, missing third-quarter revenue estimates with a 4.9% decline. Megacap stocks sensitive to interest rates also slipped, with Apple down 1.2% and Nvidia dropping 0.5%, contributing to a 0.3% loss in the broader tech sector.
Consumer discretionary shares were pressured by declines of 1% in Tesla and 0.6% in Amazon.com.
Rising U.S. Treasury yields weighed on equities as investors considered the impact of the upcoming presidential election on fiscal policy and awaited insights into how a strong economy might influence the Federal Reserve's policy decisions.
The yield on the benchmark 10-year note climbed to 4.222%, continuing a steady rise since early October, following a strong jobs report that led investors to lower expectations for interest rate easing from the central bank this year.
European stocks:
European stocks dipped on Tuesday as investors faced uncertainties around geopolitics and potential global interest rate cuts. However, SAP's strong outlook provided a boost to tech stocks, softening some losses.
The pan-European STOXX 600 index closed 0.2% lower, recovering slightly from earlier losses that brought it to a two-week low.
Rising yields on benchmark German bunds also weighed on equities, particularly affecting the utilities sector, which led the declines.
While the STOXX has reached record highs several times this year, it has pulled back from those levels as investors account for stagnating economic growth and weak demand from China.
Tech View: Long bear candle
A long bear candle has been formed on the daily chart, which indicates an attempt at a decisive downside breakout of 24,600-24,500 levels. After the formation of a series of higher tops and bottoms on the daily chart in the last few months, Nifty is currently weakening after forming a new lower top around 25230 levels. This is a negative indication and signals ongoing downward correction.
Another crucial weekly cluster support around 24,500 (ascending trend line, 23.6% retracement and weekly 20 period EMA) is placed on the verge of a downside breakout.
The short-term trend of Nifty continues to be negative. A decisive move below 24,500-25,450 levels is likely to open the next downside target of 24,000. Any rise up to the immediate resistance of 24,700 could be a selling opportunity, said Nagaraj Shetti of HDFC Securities.
In the open interest (OI) data, the highest OI on the call side was observed at 24,600 and 24,500 strike prices, while on the put side, the highest OI was at 24,400 strike price followed by 24,300.
Stocks showing bullish bias:
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on the counters of Anup Engineering, Olectra Greentech, Tata Chemicals, Heritage Foods, Mallcom, and Aster DM Healthcare 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 Apar Industries, Shakti Pumps, Persistent Systems, OFSS, Prataap Snacks, Gillette India, Godrej Properties, Whirlpool of India, and Symphony 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 3,346 crore), ICICI Bank (Rs 2,557 crore), Mazagon Dock Ship (Rs 2,239 crore), RIL (Rs 2,143 crore), Zomato (Rs 1,832 crore), City Union Bank (Rs 1,542 crore), and Amber Enterprises (Rs 1,504 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 highest trading turnovers in the day.
Most active stocks in volume terms:
City Union Bank (Shares traded: 9.1 crore), YES Bank (Shares traded: 8.7 crore), Zomato (Shares traded: 6.9 crore), Suzlon Energy (Shares traded: 6.7 crore), JP Power (Shares traded: 6.7 crore), PNB (Shares traded: 5.1 crore), and NHPC (Shares traded: 4.1 crore) among others were among the most traded stocks in the session on NSE.
Stocks showing buying interest:
Shares of Whirlpool India, MCX, and Torrent Pharma 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 PNC Infratech, ITI, RBL Bank, Equitas Small Finance Bank, Tanla Platforms, Easy Trip Planners, and Ujjivan Small Finance Bank hit their 52-week lows, signaling bearish sentiment on the counter.
Sentiment meter bears:
Overall, market breadth favoured bears as 3,499 stocks ended in the red, while 494 names settled in the green.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
The NSE Nifty 50 fell 1.25% to 24,472, while the BSE Sensex shed 1.15% to 80,220. Both benchmarks gained approximately 0.4% in the first hour of trading before reversing those gains, marking their worst session since October 3.
Here's how analysts read the market pulse:
"The Nifty slipped from the head and shoulder pattern on the daily timeframe, leading to a sharp fall during the day. Sentiment further weakened after the Nifty broke below the crucial support level of 24,700. The sentiment may remain weak as long as the index stays below 24,700, with a "sell on rise" strategy favored by market participants. The index has fallen below the 100 EMA for the first time since early June of this year. On the lower end, support is placed at 24,400, and if the index falls below this level, it may extend its correction towards 24,000," said Rupak De of LKP Securities.
Jatin Gedia of Sharekhan, said, "On the daily charts Nifty has slipped decisively below the 20-week average (24718) which is a sign of weakness. Daily and hourly momentum indicators possess a negative crossover which is a sell signal. Thus, both price and momentum indicator suggest towards weakness. On the downside, we expect the Nifty to drift towards 24000 where there is a high concentration of open interest on the put side implying support. On the upside, 24900 – 25000 shall act as a crucial resistance from short term perspective."
That said, here’s a look at what some key indicators are suggesting for Wednesday's action:
US market:
U.S. stock indexes fell on Tuesday as rising Treasury yields affected rate-sensitive sectors, prompting investors to evaluate earnings to gauge the health of American companies.
Verizon was the biggest loser on the blue-chip Dow, missing third-quarter revenue estimates with a 4.9% decline. Megacap stocks sensitive to interest rates also slipped, with Apple down 1.2% and Nvidia dropping 0.5%, contributing to a 0.3% loss in the broader tech sector.
Consumer discretionary shares were pressured by declines of 1% in Tesla and 0.6% in Amazon.com.
Rising U.S. Treasury yields weighed on equities as investors considered the impact of the upcoming presidential election on fiscal policy and awaited insights into how a strong economy might influence the Federal Reserve's policy decisions.
The yield on the benchmark 10-year note climbed to 4.222%, continuing a steady rise since early October, following a strong jobs report that led investors to lower expectations for interest rate easing from the central bank this year.
European stocks:
European stocks dipped on Tuesday as investors faced uncertainties around geopolitics and potential global interest rate cuts. However, SAP's strong outlook provided a boost to tech stocks, softening some losses.
The pan-European STOXX 600 index closed 0.2% lower, recovering slightly from earlier losses that brought it to a two-week low.
Rising yields on benchmark German bunds also weighed on equities, particularly affecting the utilities sector, which led the declines.
While the STOXX has reached record highs several times this year, it has pulled back from those levels as investors account for stagnating economic growth and weak demand from China.
Tech View: Long bear candle
A long bear candle has been formed on the daily chart, which indicates an attempt at a decisive downside breakout of 24,600-24,500 levels. After the formation of a series of higher tops and bottoms on the daily chart in the last few months, Nifty is currently weakening after forming a new lower top around 25230 levels. This is a negative indication and signals ongoing downward correction.
Another crucial weekly cluster support around 24,500 (ascending trend line, 23.6% retracement and weekly 20 period EMA) is placed on the verge of a downside breakout.
The short-term trend of Nifty continues to be negative. A decisive move below 24,500-25,450 levels is likely to open the next downside target of 24,000. Any rise up to the immediate resistance of 24,700 could be a selling opportunity, said Nagaraj Shetti of HDFC Securities.
In the open interest (OI) data, the highest OI on the call side was observed at 24,600 and 24,500 strike prices, while on the put side, the highest OI was at 24,400 strike price followed by 24,300.
Stocks showing bullish bias:
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on the counters of Anup Engineering, Olectra Greentech, Tata Chemicals, Heritage Foods, Mallcom, and Aster DM Healthcare 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 Apar Industries, Shakti Pumps, Persistent Systems, OFSS, Prataap Snacks, Gillette India, Godrej Properties, Whirlpool of India, and Symphony 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 3,346 crore), ICICI Bank (Rs 2,557 crore), Mazagon Dock Ship (Rs 2,239 crore), RIL (Rs 2,143 crore), Zomato (Rs 1,832 crore), City Union Bank (Rs 1,542 crore), and Amber Enterprises (Rs 1,504 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 highest trading turnovers in the day.
Most active stocks in volume terms:
City Union Bank (Shares traded: 9.1 crore), YES Bank (Shares traded: 8.7 crore), Zomato (Shares traded: 6.9 crore), Suzlon Energy (Shares traded: 6.7 crore), JP Power (Shares traded: 6.7 crore), PNB (Shares traded: 5.1 crore), and NHPC (Shares traded: 4.1 crore) among others were among the most traded stocks in the session on NSE.
Stocks showing buying interest:
Shares of Whirlpool India, MCX, and Torrent Pharma 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 PNC Infratech, ITI, RBL Bank, Equitas Small Finance Bank, Tanla Platforms, Easy Trip Planners, and Ujjivan Small Finance Bank hit their 52-week lows, signaling bearish sentiment on the counter.
Sentiment meter bears:
Overall, market breadth favoured bears as 3,499 stocks ended in the red, while 494 names settled in the green.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
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