10 things that will decide D-Street action on Friday

Indian benchmark equity indices surged on Thursday as a less hawkish stance by the US Federal Reserve on rate hikes eased market concerns, while a drop in overnight crude prices helped cool domestic inflation fears.

Blue-chip indexes Nifty 50 settled 0.19% higher at 22,648 points, while the S&P BSE Sensex appreciated 0.17% to 74,611.

The US central bank late on Wednesday kept interest rates unchanged as expected by the markets and flagged hopes of no rate hikes in the near term.

Here's how analysts read the market pulse:

"On the daily charts, we can observe that Nifty, after the sell in the previous trading session, has consolidated. 22,700 on the upside remains a crucial resistance while 22,450 is the crucial support from a short-term perspective. Nifty is likely to consolidate within this range over the next few trading sessions," said Jatin Gedia of Sharekhan.

Rupak De of LKP Securities, said, "On the hourly chart, Nifty formed a lower peak, indicating a decrease in bullish sentiment. The momentum indicator has crossed into bearish territory, suggesting weak momentum. In the short term, the trend may continue sideways with potential to fluctuate within the range of 22,500-22,800."

That said, here’s a look at what some key indicators are suggesting for Friday's action:

US market
Wall Street's main indexes advanced on Thursday, a day after the Federal Reserve left interest rates unchanged and allayed worries around potential rate hikes, with focus moving to a crucial job report later in the week.

While Fed Chair Jerome Powell indicated that stubbornly high inflation would see a long-expected US rate cut pushed back, he refused to entertain talk that rates might actually need to go up again. At 10:01 a.m. ET, the Dow Jones Industrial Average rose 69.56 points, or 0.18%, to 37,972.85, the S&P 500 gained 5.60 points, or 0.11%, to 5,023.99, and the Nasdaq Composite gained 51.79 points, or 0.33%, to 15,657.28.

European shares
European shares flitted in a tight range on Thursday, after falling to a one-week low in early trade, as investors returned from a mid-week holiday to gauge a slew of earnings and the Federal Reserve signalling a delay in interest rate cuts.

The pan-European STOXX 600 held its ground at 503.55, as of 0830 GMT, after logging its first monthly decline this year in April.

Market sentiment has come under pressure as investors navigated through risks surrounding the Middle East geopolitical conflict, the European Central Bank's policy outlook beyond June, and the corporate earnings season.

Tech View: Small positive candle
Nifty on Thursday ended 43 points higher to form a small positive candle with a minor upper shadow, indicating range-bound action in the market near crucial resistance around 22,800 levels.

The short-term trend of Nifty is choppy with range-bound action. Any upside from here could encounter strong resistance around 22,800 levels. Immediate support is at 22,550 levels and a slide below the support could trigger some more weakness ahead, said Nagaraj Shetti of HDFC Securities.

Open Interest (OI) data showed that on the Call side, the highest OI was observed at 22,700 followed by 23,000 strike prices while on the put side, the highest OI was at 22,500 strike price.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence ( MACD) showed bullish trade on the counters of Vadilal Industries, BASF India, M&M, Oberoi Realty, and Sanofi India, among others.

The MACD is known for signalling 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 signalling weakness ahead

The MACD showed bearish signs on the counters of Honeywell Automation, Data Patterns, KPI Green Energy, Godrej Properties, and Senco Gold, among others. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value terms
Kotak Bank (Rs 4,187 crore), ICICI Bank (Rs 2,869 crore), HDFC Bank (Rs 2,563 crore), RIL (Rs 2,134 crore), SBI (Rs 1,656 crore), Infosys (Rs 1,428 crore), and Axis Bank (Rs 1,423 crore) were among the most active stocks on the NSE in value terms. Higher activity on a counter in value terms can help identify the counters with highest trading turnovers in the day.

Most active stocks in volume terms
Tata Steel (Shares traded: 6.9 crore), Power Grid (Shares traded: 4.4 crore), NTPC (Shares traded: 2.7 crore), Kotak Bank (Shares traded: 2.6 crore), ICICI Bank (Shares traded: 2.5 crore), ITC (Shares traded: 2.3 crore), and SBI (Shares traded: 2 crore) were among the most traded stocks in the session on the NSE.

Stocks showing buying interest
Shares of REC, Raymond, KFin Technologies, Carborundum Universal, Trent, Ashok Leyland, and Triveni Turbine, among others, witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.

Stocks seeing selling pressure
Shares of Kotak Bank hit their 52-week lows, signalling bearish sentiment on the counters.

Sentiment metre favours bears
Overall, market breadth favoured bears as 1,967 stocks ended in the red, while 1,867 names settled in the green.

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