Ahead of Market: 10 things that will decide stock market action on Wednesday

The India–US trade deal provided a strong boost to domestic equities, with benchmark indices ending the session with broad-based gains across sectors. Financials, auto, realty and chemicals emerged as the top performers, while Reliance Industries and HDFC Bank were the biggest individual contributors to the frontline indices. The Nifty closed at 25,727.55, up 639.15 points or 2.55%, while the BSE Sensex jumped 2,073 points, or 2.54%, to settle at 83,739.13.

Meanwhile, the volatility gauge India VIX ended at 12.90, down 6.99% from the last closing.

Here’s how analysts read the market pulse:

Commenting on the day’s action, Rupak De, Senior Technical Analyst at LKP Securities said that Nifty opened with a gap-up and witnessed decent profit-taking, forming a large red candle on the daily chart. Yet the index managed to close above the 38.2% Fibonacci retracement level, placed around 25,500. “This has led to a swift shift in sentiment from sell on rise to buy on dips within a single session. Going forward, immediate support is seen in the 25,470–25,500 zone. On the higher end, resistance is placed at 26,000–26,200,” De said.

US markets

The U.S. stock market is drifting through mixed trading on Tuesday, while gold and silver bounce back from their latest sell-off.

Several influential Big Tech stocks weighed on the market, including drops of 2.5% for Nvidia and 2.2% for Microsoft.

They fell despite a 6.6% climb for Palantir Technologies, which reported bigger profit and revenue for the latest quarter than analysts expected. Its forecast for 61% growth in revenue this year also topped analysts’ expectations, as CEO Alex Karp crowed that his company is unique and that “these numbers prove it.”

European Markets

European markets were a sea of red around 2:30 p.m. GMT (8:15 pm India) time with UK’s FTSE 100 was trading with cuts (1.01%) while Stoxx 600, French CAC 40, Germany’s DAX and Spain’s IBEX were down up to 0.58% around this time.

Tech View

Nifty has reclaimed its long-term 200-DMA at 25,250 and the 100-DMA at 25,630 and has negated the bearish setup and managed to sustain above the 25,600 mark, Nilesh Jain, Head – Technical and Derivatives Research Analyst (Equity Research) at Centrum Broking said. On the momentum front, MACD has generated a fresh buy crossover, while RSI has rebounded from the oversold zone and moved above 50, signaling improving strength, he added.

“India VIX cooled off sharply by 6% to close near 13. Any further decline in volatility would provide additional comfort to the bulls. Overall, the structure for the Nifty appears positive for 26,100 levels, and a buy-on-dips approach remains advisable as long as Nifty holds above 25,250,” Jain opined.

Most active stocks in terms of turnover

PB Fintech (Policybazaar, Rs 545 crore), Hindustan Copper (Rs 392 crore), Radico Khaitan (Rs 159 crore), Tata Motors (TMCV, Rs 150 crore), Waaree Energies (Rs 135 crore), Jio Financial Services (Rs 129 crore), and Reliance Industries (Rs 127 crore) were among the most active stocks on BSE in value terms. Higher activity in a counter in value terms can help identify the counters with highest trading turnovers in the day.

Most active stocks in volume terms

Vodafone Idea (Traded shares: 7.21 crore), Ola Electric (Traded shares: 86.49 lakh), Suzlon Energy (Traded shares: 81.91 lakh), Trident (Traded shares: 72.77 lakh), RPower (Traded shares: 72.38 lakh), Hindustan Copper (Traded shares: 62.99 lakh) and YES Bank (Traded shares: 60.97 lakh crore) were among the most actively traded stocks in volume terms on BSE.

Stocks showing buying interest

Reliance Industries (RIL), HDFC Bank, Adani Enterprises, Aarti Industries, Eternal, Jio Financial, Bajaj Finance and InterGlobe Aviation were among the stocks that witnessed strong buying interest from market participants.

Also Read: Chemical stocks surge up to 19% on US-India trade deal. Why brokerages see Aarti, UPL, 2 more stocks as top beneficiaries

52 Week high

Over 121 stocks hit their 52 week highs today while 117 stocks slipped to their 52-week lows. Among the ones which hit their 52 week highs included Aayush Art And Bullion, Aether Industries, Apex Frozen Foods, APL Apollo Tubes, Ashok Leyland, AXIS Bank, Bajaj Auto, Bajaj Consumer Care and HCL Technologies.

Stocks seeing selling pressure

Among the large cap names were Tech Mahindra, Bharat Electronics (BEL) and SBI Life Insurance Corporation. Other stocks which witnessed significant selling pressure were PB Fintech (Policybazaa), Aegis Vopak Terminals, Varun Beverages Limited (VBL), Rainbow Childrens Med, Chennai Petroleum Corporation, Ola Electric, Medanta and Aster DM Healthcare.

Sentiment meter favours bulls

Action in heavyweights like HDFC Bank, Bajaj Finance and Bharti Airtel dragged the markets the most, ensuring a negative closing. The breadth also stayed negative in broader markets. Out of the 4,422 stocks that traded on the BSE on February 3, Tuesday, 3,279 stocks witnessed advances, 1,015 saw declines while 128 stocks remained unchanged.

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