India’s bluechip Nifty 50 index fell for the first time in nine sessions on Friday, succumbing to the persistent concerns of US rate hikes that have weighed on global equities. The Nifty 50 settled 0.85% lower at 19,331.80, while the 30-member S&P BSE Sensex fell 0.77% to 65,280.45. Both indexes hit record highs for the sixth time in seven sessions before reversing course. Still, the recent rally helped the Nifty and Sensex end the week with gains of 0.74% and 0.87%, respectively.
“The sharp increase in US payroll data led to expectations of a prolonged high-interest rate environment, resulting in a spike in US yields and increased volatility in global equities. Market participants are awaiting key data points such as domestic and US inflation numbers for further insights into the sustainability of the market trend. Given the elevated market valuation, the profit booking is visible at the upper band of the rally,” he added.
That said, here’s a look at what some key indicators are suggesting for Monday’s action:
Wall Street Watch
Wall Street stocks dipped Friday following data that showed slower hiring in the United States but which was seen as keeping the Federal Reserve on track to raise interest rates.
The world’s biggest economy added 209,000 jobs last month, fewer than expected, but the unemployment rate edged down to 3.6 percent, remaining close to historic lows. The Dow Jones Industrial Average finished down 0.6 percent at 33,734.88. The broad-based S&P 500 dipped 0.3 percent to 4,398.95, while the tech-rich Nasdaq Composite Index slipped 0.1 percent to 13,660.72.
European shares
European shares edged lower on Friday, following sharp losses in the previous session, after U.S. data that showed a still strong labor market, while investors await a key U.S. jobs report due later in the day for more clues on interest rate outlook.
The pan-European STOXX 600 index fell 0.4% by 0710 GMT, set for its worst week since mid-March, led by declines in utilities shares, which slid 1.2%.UK’s FTSE 100 index also fell 0.6%.
Tech View: Long bear candle
A long bear candle was formed on the daily chart with a long upper shadow. Technically this pattern indicates the rejection of bulls at the new highs. This could also be considered a short-term top reversal pattern. The positive chart pattern like higher tops and bottoms is intact as per the daily chart and present weakness in the market could be considered as a higher top reversal of the pattern. Further weakness is expected to find a base for higher bottom formation. “The immediate supports like ascending resistance line as per change in polarity and daily 10 period EMA is placed around 19200 levels, which could be an immediate cluster support for the market on further weakness ahead. Any upside bounce from here could encounter a strong hurdle at 19425 levels,” Nagaraj Shetti, Technical Research Analyst, HDFC Securities, said.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on the counters of Tata Power, Shree Renuka Sugars, Vedanta, Jain Irrigation, and Minda Corporation 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 REC, HCL Technologies, United Spirits, and Godrej Consumer among others.
Most active stocks in value terms
Olectra Greentech (Rs 1986 crore), HDFC Bank (Rs 1657 crore), RIL (Rs 1633 crore), Bharti Airtel (Rs 1629 crore), and Tata Motors (Rs 1279 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 the highest trading turnovers in the day.
Most active stocks in volume terms
Suzlon Energy (Shares traded: 26.75 crore), Reliance Power (Shares traded: 14,57 crore), YES Bank (Shares traded: 24.82 crore), PNB (Shares traded: 10.13 crore) and Bank of Maharashtra (Shares traded: 5.89 crore) among the most traded stocks in the session on NSE.
Stocks showing buying interest
Shares of Olectra Greentech, Kalyan Jewellers, Ion Exchange, Mishra Dhatu Nigam, and Tata Motors (DVR) 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 Aarti Industries, Viji Finance, Kshitij Polyline, Dangee Dums, and Cell Point (India) among others stocks hit their 52-week lows, signaling bearish sentiment on the counters.
Sentiment meter favours bears
Overall, market breadth favored bears as 1,413 stocks ended in the green, while 2,050 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)