The Nifty 50 index fell 0.49 per cent to 24,918 and the S&P BSE Sensex fell 0.49 per cent to 81,523.
Analysts are predicting the market trends as follows:
“On the daily chart, Nifty is taking support from the ascending trend line and is forming a bearish candlestick. Nifty is finding strong support near the 24,800 levels. If this level breaks, it could decline to 24,600 and 24,400 in the short term. On the other hand, 25,200 could act as a resistance level and the price may continue to trade sideways in the broad range of 24,800 to 25,200,” said Mandar Bhojane of Choice Broking.
Hrishikesh Yedve, Asit C. Mehta Investment Interrmediates, said, “Technically, on the daily chart, Nifty has not been able to rise above the trendline resistance and has formed a red candle indicating weakness. As long as the index remains below the trendline resistance (around 25,150 levels), caution is advised on the upside. On the downside, the 34-DEMA support is at around 24,750, which will act as a crucial support for Nifty in the near term.”
That said, let’s take a look at what some key indicators suggest for Thursday’s moves.
US Market:
Wall Street stocks slumped on Wednesday as benchmark U.S. Treasury yields hit their lowest level in more than a year. The drop came after a key inflation report showed disproportionate price increases and made a 25 basis point interest rate cut by the Federal Reserve more likely next week.
All three major US stock indexes fell in early trading, while Brent crude oil prices rebounded from a three-and-a-half-year low. The Labor Department’s Consumer Price Index (CPI) showed that year-on-year inflation slowed by 40 basis points to 2.5%. However, core CPI, which excludes food and energy, rose 0.3% month-on-month and 3.2% year-on-year. Market attention also shifted to Tuesday night’s US presidential debate, where Vice President Kamala Harris and former President Donald Trump clashed over a range of issues, including the economy and immigration.
European stocks:
European stocks closed flat on Wednesday as gains in technology stocks offset losses in real estate shares as investors focused on the European Central Bank’s interest rate decision scheduled for Thursday. The pan-European STOXX 600 index was little changed on the day.
In the UK, the benchmark FTSE 100 fell 0.2%. July GDP data showed UK economic output was unchanged from the previous month.
Technical Perspective: Bearish Candle
As the Indian market ended on a weak note, the Nifty formed a bearish candlestick on the daily chart.
The recent swing low of 24,753 is expected to provide short-term support for the Nifty. On the upside, 25,200 will be a strong resistance for the Nifty and traders need to remain cautious unless it is breached, said Devarsh Vakil, of HDFC Securities.
Looking at the open interest (OI) data, the call side saw the highest OI at strike prices of 25,000 and 25,100, while the put side saw the highest OI at strike prices of 24,800, followed by 24,900.
Stocks exhibiting a bullish bias:
Momentum indicator Moving Average Convergence Divergence (MACD) indicated bullish trading in stocks like TVS Holdings, PI Industries, Hawkins Cookers, RBM Infracon, Himadri Speciality Chemicals, Tata Communications, Dodra Dairy, Havells India, Green Panel Industries and GM Breweries.
The MACD is known to signal trend reversals in the securities and indices being traded. When the MACD rises above its signal line, it signals a bullish trend, indicating that the security’s price may rise, and vice versa.
Stock prices signal weakness going forward:
MACD showed bearish signs in stocks like Craftsman Automation, Swaraj Engines, Shriram Finance, SBI Life Insurance, SBI Life, Ceat, Muthoot Finance, Vijaya Diagnostic Centre, Motilal Oswal Financial Services etc. The bearish crossover of MACD in these stocks indicates that their downward journey has just begun.
Most Active Stocks by Value:
Tata Motors (Rs 3,555 crore), Zomato (Rs 3,362 crore), Prism Johnson (Rs 2,236 crore), HDFC Bank (Rs 1,829 crore), SBI (Rs 1,556 crore), Paytm (Rs 1,499 crore) and ICICI Bank (Rs 1,480 crore) were among the most active stocks in terms of value traded on the NSE. High volume stocks in terms of value traded help identify the stocks with the highest trading volume for the day.
Most active stocks by trading volume:
Vodafone Idea (shares traded: 358 million), YES Bank (shares traded: 240 million), Zomato (shares traded: 121 million), Suzlon Energy (shares traded: 121 million), Prism Johnson (shares traded: 96 million), ONGC (shares traded: 44 million) and Piramal Pharma (shares traded: 36 million) were some of the most traded stocks during the session on NSE.
Stocks showing buying interest:
Stocks like Prism Johnson, Apar Industries, PNB Housing, Century Textiles, Bajaj Auto, Natco Pharma and Jyothy Labs hit new 52-week highs, indicating bullish sentiment and strong buying interest from market participants.
Stocks seeing selling pressure:
None of the major stocks hit 52-week lows on Wednesday.
Sentiment Meter Favors the Bears:
Overall, market breadth was in favor of the bears as 1,603 stocks declined and 2,368 stocks advanced.
(Disclaimer: The recommendations, suggestions, views and opinions expressed by the experts are their own. They do not represent the views of The Economic Times)
