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

The Indian stock market slipped into the red on Monday, with benchmark indices Sensex and Nifty falling as investors grappled with rising US bond yields and renewed expectations of higher interest rates following hawkish comments from US Fed Chair Kevin Warsh. Renewed US-Iran tensions and a surge in crude oil prices above $90 a barrel added to the pressure.

Sensex dropped over 307 points to end at 76,957 while Nifty 50 lost over 95 points to close at 24,080. Broader markets saw a sharper fall, with Nifty Smallcap 100 and Nifty Midcap 100 indices dropping up to 0.8%.

Here's how analysts read the market pulse


Escalating tensions between the US and Iran have kept investors on edge, as fading prospects of a diplomatic breakthrough pushed crude oil prices and global bond yields higher, said Vinod Nair, Head of Research at Geojit Investments. He noted that rising crude oil prices and bond yields have renewed concerns over energy-led inflation and a higher interest rate environment, which could weigh on the earnings cycle.

Meanwhile, the Fed chair's recent comments after the Jackson Hole address have increased expectations of a potential September rate hike, keeping global yields elevated and contributing to near-term volatility in emerging markets, according to the analyst. “Despite these headwinds, stock-specific buying in the broader market supported a recovery from intraday lows, aided by expectations of healthy Q1FY27 GDP growth, festive-led demand, and better GST collections,” he said.

US stocks

The main U.S. stock indexes dropped on Monday after military strikes between the United States and Iran drove up oil prices, fanning inflation worries after Fed Chair Kevin Warsh's hawkish remarks in his first Jackson Hole address the previous week.

The losses could set the tone for September, typically a weak month for equities, and are likely to up the ante at the U.S. Federal ‌Reserve's meeting next ⁠month.

Traders see ⁠a more than 60% chance of a rate hike at the Fed's September meeting, according to CME's FedWatch, a sharp increase from 41.4% a week ago, after Warsh said policymakers may need to increase borrowing costs if inflation does not ease to the central bank's 2% target.

European markets

Europe's STOXX 600 index dipped 0.2%, with trading volumes reduced by a ⁠UK public holiday.

Tech view

Nifty continues to remain weak as it trades below the critical moving averages, said Rupak De, Senior Technical Analyst at LKP Securities. He noted that the index found initial resistance around the recent low. However, the RSI has formed a positive divergence on the hourly chart, indicating a possibility of a near-term pullback.

In the near term, the index may witness a minor pullback towards 24,180–24,200, the analyst said. However, he believes that the higher levels are likely to act as resistance. “A sustained move above 24,200 could trigger a further rise of around 100 points. On the downside, support is placed at 23,990. A sustained break below this level could resume the correction in the market,” according to the analyst.

Most active stocks in terms of turnover

Eternal (Rs 8,897 crore), Lenskart Solutions (Rs 7,387 crore), Laurus Labs (Rs 5,918 crore), HDFC Bank (Rs 5,634 crore), Adani Transmission (Rs 5,147 crore), Groww (Rs 4,526 crore), and RIL (Rs 4,458 crore) were among the most active stocks on NSE in value terms. Higher activity in a counter in value terms can help identify the counters with the highest trading turnovers in the day.

Most active stocks in volume terms

Vodafone Idea (Traded shares: 41.9 crore), Eternal (Traded shares: 27.2 crore), Groww (Traded shares: 23.55 crore), Ola Electric (Traded shares: 17.84 crore), Lenskart Solutions (Traded shares: 11.17 crore), Zee Entertainment (Traded shares: 10.92 crore) and Yes Bank (Traded shares: 10.2 crore) were among the most actively traded stocks in volume terms on NSE.

Stocks showing buying interest

Ather Energy, Cyient, Balrampur Chini, Indegene, Ola Electric, Gabriel India and CE Info Systems were among the stocks that witnessed strong buying interest from market participants.

52-week high

Among the ones which hit their 52-week highs on NSE included Ather Energy, Indegene, Aurobindo Pharma, Nykaa, Lenskart Solutions, Welspun Corp and Oracle.

Stocks seeing selling pressure

Stocks which witnessed significant selling pressure were Adani Transmission, Adani Enterprises, Zee Entertainment Enterprises, Adani Green, Adani Power, Newgen Software and Adani Ports SEZ.

52-week low

Among the ones which hit their 52-week lows on NSE included Emami, ITC, KEC International, HUL, PI Industries, Inox Wind and RVNL.

Sentiment meter favours bears

Out of the 3,641 stocks that traded on the NSE on August 31, Monday, 1,340 stocks witnessed advances, 2,204 saw declines while 97 stocks remained unchanged.

(With inputs from agencies)

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