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

The Indian market ended higher on Tuesday, with the Sensex climbing more than 590 points and the Nifty 50 breaching the 25,230 level, as a number of factors, from gains in auto stocks to optimism over U.S. trade negotiations and expectations of a U.S. Federal Reserve rate cut, shaped investor sentiment.

The S&P BSE Sensex climbed 594.95 points, or 0.73%, to finish at 82,380.69, while the NSE Nifty 50 rose to 25,239, higher by 169.90 points, or 0.68%.

Here’s how analysts read the market pulse:

The domestic market sustained its recovery trend, supported by favourable global cues on expectations of ~25 bps rate cut in the forthcoming U.S. Fed policy decision and renewed optimism surrounding the resumed India-US trade negotiations, said Vinod Nair, Head of Research at Geojit Investments.

“Auto and consumer durable stocks outperformed, ahead of the rollout of new GST rates and festive-driven demand expectations. Going forward, investor attention will remain on trade discussions, while strong domestic macro fundamentals are expected to drive upward earnings revisions, supporting current valuations and mitigating downside risks,” said Nair.

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US markets

The S&P 500 and the Nasdaq were subdued in choppy trading on Tuesday, as investors turned cautious ahead of an anticipated interest rate cut from the Federal Reserve on Wednesday and assessed the latest retail sales reading.Investors largely priced in a 25 basis point cut from the U.S. central bank at the conclusion of its two-day meeting on Wednesday to offset the deterioration in the U.S. labor market, evidenced by numerous recent economic indicators.U.S. retail sales increased more than expected in August, data from the Commerce Department showed on Tuesday, but did little to change already priced-in rate cut expectations.

Tech View

The Nifty has given a double bottom breakout on the daily timeframe, indicating rising optimism, said Rupak De, Senior Technical Analyst at LKP Securities, adding that the index has been sustaining above the 21EMA, confirming a continuation of the uptrend.

“Additionally, the RSI has moved above its previous swing high, further supporting bullish momentum. In the short term, the trend is likely to remain strong, with potential upside towards 25,500 and beyond. On the downside, support is placed at 25,000, and a break below this level could signal the end of the current rally,” said Nair.

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Most active stocks in terms of turnover

Redington (Rs 3,025 crore), HDFC Bank (Rs 1,803 crore), Godfrey Philips (Rs 1,576 crore), Infosys (Rs 1,345 crore), RIL (Rs 1,220 crore), ICICI Bank (Rs 1,167 crore) and L&T (Rs 1,068) 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: 84.84 crore), Redington (Traded shares: 10.92 crore), Suzlon Energy (Traded shares: 8.39 crore), YES Bank (Traded shares: 5.88 crore), Reliance Power (Traded shares: 4.79 crore), Motherson Sumi (Traded shares: 4.27 crore) and GMR Airports (Traded shares: 3.24 crore) were among the most actively traded stocks in volume terms on NSE.

Stocks showing buying interest

Shares of Redington, Godfrey Philips, GE Shipping, Aegis Logistics, Usha Martin, Reliance Power, Mahanagar Gas were among the stocks that witnessed strong buying interest from market participants.

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52 Week high

Over 155 stocks hit their 52 week highs today while 55 stocks slipped to their 52-week lows. Among the ones which hit their 52 week highs included Muthoot Finance and Maruti Suzuki.

Stocks seeing selling pressure

Stocks which witnessed significant selling pressure were Godawari Power, JBM Auto, HBL Power, Vodafone Idea, Concord Biotech, Godrej Consumer and Gujarat Mineral Development.

Sentiment meter bullish

The market sentiments were bullish. Out of the 4,309 stocks that traded on the BSE on Tuesday, 1,660 stocks witnessed declines, 2,471 saw advances, while 178 stocks remained unchanged.

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