Analysts interpret these market trends as follows:
“Indian indices have resumed their rally, tracking the global market trend, as inflation cooling worldwide raises hopes for an end to the policy-tightening era. The latest positive development came from the Eurozone, where inflation has slowed for the third consecutive month in July, matching market expectations at 5.3%. Moreover, the Eurozone economy grew by 0.3% in the June quarter according to preliminary estimates, slightly exceeding market expectations,” stated Vinod Nair, Head of Research at Geojit Financial Services.
“Today’s sharp upward movement has put call writers on the defensive. There was significant short covering in the sold calls, and put writing also appeared for this week’s expiry and the monthly expiry. Nifty has a strong base between 19400 and 19550 with open upside targets. The Bank Nifty, on the other hand, needs to cross above the 46300 level to initiate an upward movement again. The Bank Nifty’s max pain level has not yet shifted from the 45700 level, and any rallies up to this level are likely to be sold into,” explained Rahul Ghose, Founder & CEO of Hedged.
Given these insights, here are key indicators for Tuesday’s action:
US Market
Wall Street rose on Monday with key benchmarks set to end July higher on upbeat company earnings and hopes of a soft landing for a resilient U.S. economy, while cooling inflation fuels bets on a rate-hike pause.
Investors await quarterly reports from Apple, Amazon.com and AMD later this week, while July ISM Manufacturing reading and three sets of employment data, including July’s non-farm payrolls, are also in focus.
At 9:48 a.m. ET, the Dow Jones Industrial Average was up 54.51 points, or 0.15%, at 35,513.80, the S&P 500 was up 10.59 points, or 0.23%, at 4,592.82, and the Nasdaq Composite was up 43.63 points, or 0.30%, at 14,360.29.
Nine of the top 11 S&P 500 sectors gained, led by a 1.7% rise in energy stocks.
European Shares
European shares were broadly flat on Monday ahead of data that is expected to show euro zone inflation eased in July, likely supporting the view that the European Central Bank will hold off from hiking interest rates again next month.
The pan-European STOXX 600 struggled for direction, pulling back from near 1-1/2-year highs touched last week.
Dragging the index down, Heineken slid 4.8% after the world’s second-largest brewer by volume cut its 2023 profit growth forecast after an economic slowdown in Vietnam depressed first-half earnings by more than expected.
Technical View: Positive candle
A fairly positive candle was formed on the daily chart on Monday with a minor lower shadow. This pattern indicates a market bounce following a slight decline. After a series of higher highs and higher lows over the last two months, Nifty seems to have formed minor degrees of lower highs and lower lows in the past 4-5 sessions amid range movement. This pattern could suggest ongoing consolidation in the market. However, a sustainable move above 19870 levels could negate this bearish pattern.
Stocks showing bullish bias
The Momentum indicator Moving Average Convergence Divergence (MACD) signaled bullish trade for IDFC First Bank, Ujjivan SFB, BEL, BLS International Services, and CSC, among others. The MACD, known for signaling trend reversals in traded securities or indices, gave a bullish signal, indicating potential upward movement for these stocks.
Stocks signaling weakness ahead
The MACD displayed bearish signs on RVNL, UCO Bank, Equitas SFB, Samvardhana Motherson, and DCB Bank counters, among others. A bearish crossover on the MACD for these counters indicates the start of their downward journey.
Most active stocks in value terms
HDFC Bank, ICICI Bank, Piramal Enterprises, RIL, and Infosys were among the most active stocks on the NSE in value terms. High activity on these counters can help identify the stocks with the highest trading turnover for the day.
Most active stocks in volume terms
IRFC, Vodafone Idea, Suzlon Energy, Reliance Power, and IDFC First Bank were among the most traded stocks in the session on the NSE.
Stocks showing buying interest
BEML, BLS International Services, Hindustan Copper, and LT Foods shares witnessed strong buying interest from market participants, hitting their fresh 52-week highs and signaling bullish sentiment.
Stocks seeing selling pressure
Shares of UPL, JBF Industries, MOS Utility, and Viji Finance were among the stocks that reached their 52-week lows, indicating bearish sentiment on these counters.
Sentiment meter favors bulls
In general, the market breadth favored bulls as 2,178 stocks ended in the green, while 1,509 names settled with cuts.
(Disclaimer: The recommendations, suggestions, views, and opinions provided by the experts are their own. They do not represent the views of Economic Times.)
