Ahead of Market: 10 things that will decide stock market action on Wednesday
Indian equities fell sharply as escalating West Asia tensions lifted crude oil prices and weakened the rupee, raising inflation concerns. Sensex and Nifty declined up to 0.7%, while analysts said geopolitical risks overshadowed earnings optimism d...
By Debaroti Adhikary, ETMarkets.com |
The Indian stock market closed in the deep red on Tuesday, with Sensex and Nifty falling up to 0.7% as tensions in the Middle East escalated, driving up oil prices. Sensex dropped more than 561 points to 77,055, while Nifty 50 dropped 159 points to 24,052 on Tuesday. The broader market also edged lower, with Nifty Smallcap 100 and Nifty Midcap 100 indices dropping up to 1%. Nifty Auto, PSU Bank, IT and Realty emerged as the biggest losers, falling up to 2% in afternoon trade, while the sell-off wiped out nearly Rs 3 lakh crore from the market capitalisation of BSE-listed companies.
Here's how analysts read the market pulse
Domestic equities came under renewed pressure as escalating West Asia tensions drove crude oil prices sharply higher, reviving fears whether global energy supply further delays a recovery in India corporate earnings, said Vinod Nair, Head of Research at Geojit Investments. The pain was compounded by the rupee breaching the 96-per-dollar mark, fanning concerns over imported inflation and squeezing input costs across industries, he added.
"The fallout was most visible in inflation- and cost-sensitive pockets; auto, financials, and realty led the market lower, while pharma bucked the trend, benefiting as investors sought shelter in defensives amid the volatility. Sustained foreign fund outflows added to the cautious mood, keeping sentiment on the back foot. Looking ahead, all eyes are now on the US Fed Chair, whose upcoming remarks could set the tone for global rate expectations. Meanwhile, the Q1 earnings season rolls on a positive note but rapid increase in geopolitical risk has dampened the sentiment," Nair further said.
US stocks
Wall Street's main indexes rose on Tuesday after softer-than-expected inflation data fueled hopes the Federal Reserve could adopt a less hawkish stance on interest rates, while upbeat second-quarter results lifted most of the big bank stocks.
The data showed that the consumer price index rose 3.5% in June from a year earlier, below Reuters-polled economists' forecast of 3.8%.
Following the report, traders sharply pared back expectations for near-term policy tightening, with a 15% chance of a quarter-point rate increase at the Fed's upcoming meeting, down from 35% before the data.
IBM shares tumbled nearly 24% after the software and consulting firm forecast preliminary second-quarter revenue below estimates. A fall of more than 22.9% at the close would mark the stock's biggest one-day drop since the "Black Monday" crash of 1987.
Shares of some other software companies also fell, tracing declines in IBM. Oracle dropped 1.7% and Service Now fell 5.6%. Accenture declined 2.8%.
Big bank results kick-started the second-quarter earnings season on Wall Street. Goldman Sachs gained 6.5% after it exceeded second-quarter profit expectations, as dealmaking picked up pace and market volatility due to the Middle East war boosted the equities business to a record.
JPMorgan Chase and Citigroup added 1.8% and 1.5%, respectively, after reporting higher second-quarter profit. Bank of America gained 1.4% after beating estimates for second-quarter profit, whileWells Fargo eased 0.3%.
European markets
European shares were near one-week lows on Tuesday, as escalating U.S.-Iran tensions spooked investors, who scrutinized quarterly earnings from companies such as oil major BP and telecom equipment maker Ericsson to gauge the impact of the conflict on corporate health.
The pan-European STOXX 600 index fell 0.04%.
Tech view
Nifty 50 remained range-bound after opening with a gap-down as the NSE weekly options expired, said Rupak De, Senior Technical Analyst at LKP Securities. He added that the index found support around the previous day's low while continuing to sustain above the falling trendline.
"The index also held above the critical 50 EMA, indicating underlying strength. In the short term, the outlook is likely to remain positive as long as the index stays above 23,950. On the higher side, it may advance towards the 24,250–24,300 zone. However, a decisive fall below 23,950 could weaken the current bullish setup and trigger a phase of consolidation," according to the analyst.
Most active stocks in terms of turnover
Kalyan Jewellers (Rs 5,037 crore), TCS (Rs 2,101 crore), HDFC Bank (Rs 2,079 crore), ICICI Bank (Rs 1,985 crore), Biocon (Rs 1,877 crore), Reliance Industries (Rs 1,752 crore) and Infosys (Rs 1,629 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: 29.01 crore), Kalyan Jewellers (Traded shares: 9.58 crore), Yes Bank (Traded shares: 6.18 crore), Adani Power (Traded shares: 5.56 crore), IDBI Bank (Traded shares: 5.28 crore), JP Power (Traded shares: 4.71 crore) and Biocon (Traded shares: 4.3 crore) were among the most actively traded stocks in volume terms on NSE.
Stocks showing buying interest
Nuvoco Vistas Corp, Biocon, CONCOR, Adani Power, MCX India, Welspun Corp and Adani Green Energy 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 Biocon, Welspun Corp, Adani Green Energy, Divis Labs, Adani Transmission, ACME Solar Holdings and JB Chemicals.
Stocks seeing selling pressure
Stocks which witnessed significant selling pressure were Aegis Vopak Terminal, . Newgen Software, Thermax, Welspun India, Aegis Logistics, MRPL and CreditAccess Grameen.
52-week low
Among the ones which hit their 52-week lows on NSE included Vedanta, ITC, PI Industries and Patanjali Foods,.
Sentiment meter favours bulls
Out of the 3,410 stocks that traded on the NSE on July 14, Tuesday, 1,022 stocks witnessed advances, 2,278 saw declines while 110 stocks remained unchanged.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
Here's how analysts read the market pulse
Domestic equities came under renewed pressure as escalating West Asia tensions drove crude oil prices sharply higher, reviving fears whether global energy supply further delays a recovery in India corporate earnings, said Vinod Nair, Head of Research at Geojit Investments. The pain was compounded by the rupee breaching the 96-per-dollar mark, fanning concerns over imported inflation and squeezing input costs across industries, he added.
"The fallout was most visible in inflation- and cost-sensitive pockets; auto, financials, and realty led the market lower, while pharma bucked the trend, benefiting as investors sought shelter in defensives amid the volatility. Sustained foreign fund outflows added to the cautious mood, keeping sentiment on the back foot. Looking ahead, all eyes are now on the US Fed Chair, whose upcoming remarks could set the tone for global rate expectations. Meanwhile, the Q1 earnings season rolls on a positive note but rapid increase in geopolitical risk has dampened the sentiment," Nair further said.
US stocks
Wall Street's main indexes rose on Tuesday after softer-than-expected inflation data fueled hopes the Federal Reserve could adopt a less hawkish stance on interest rates, while upbeat second-quarter results lifted most of the big bank stocks.
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The data showed that the consumer price index rose 3.5% in June from a year earlier, below Reuters-polled economists' forecast of 3.8%.
Following the report, traders sharply pared back expectations for near-term policy tightening, with a 15% chance of a quarter-point rate increase at the Fed's upcoming meeting, down from 35% before the data.
IBM shares tumbled nearly 24% after the software and consulting firm forecast preliminary second-quarter revenue below estimates. A fall of more than 22.9% at the close would mark the stock's biggest one-day drop since the "Black Monday" crash of 1987.
Shares of some other software companies also fell, tracing declines in IBM. Oracle dropped 1.7% and Service Now fell 5.6%. Accenture declined 2.8%.
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Big bank results kick-started the second-quarter earnings season on Wall Street. Goldman Sachs gained 6.5% after it exceeded second-quarter profit expectations, as dealmaking picked up pace and market volatility due to the Middle East war boosted the equities business to a record.
JPMorgan Chase and Citigroup added 1.8% and 1.5%, respectively, after reporting higher second-quarter profit. Bank of America gained 1.4% after beating estimates for second-quarter profit, whileWells Fargo eased 0.3%.
ADVERTISEMENT
European markets
European shares were near one-week lows on Tuesday, as escalating U.S.-Iran tensions spooked investors, who scrutinized quarterly earnings from companies such as oil major BP and telecom equipment maker Ericsson to gauge the impact of the conflict on corporate health.
The pan-European STOXX 600 index fell 0.04%.
Tech view
Nifty 50 remained range-bound after opening with a gap-down as the NSE weekly options expired, said Rupak De, Senior Technical Analyst at LKP Securities. He added that the index found support around the previous day's low while continuing to sustain above the falling trendline.
"The index also held above the critical 50 EMA, indicating underlying strength. In the short term, the outlook is likely to remain positive as long as the index stays above 23,950. On the higher side, it may advance towards the 24,250–24,300 zone. However, a decisive fall below 23,950 could weaken the current bullish setup and trigger a phase of consolidation," according to the analyst.
Most active stocks in terms of turnover
Kalyan Jewellers (Rs 5,037 crore), TCS (Rs 2,101 crore), HDFC Bank (Rs 2,079 crore), ICICI Bank (Rs 1,985 crore), Biocon (Rs 1,877 crore), Reliance Industries (Rs 1,752 crore) and Infosys (Rs 1,629 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: 29.01 crore), Kalyan Jewellers (Traded shares: 9.58 crore), Yes Bank (Traded shares: 6.18 crore), Adani Power (Traded shares: 5.56 crore), IDBI Bank (Traded shares: 5.28 crore), JP Power (Traded shares: 4.71 crore) and Biocon (Traded shares: 4.3 crore) were among the most actively traded stocks in volume terms on NSE.
Stocks showing buying interest
Nuvoco Vistas Corp, Biocon, CONCOR, Adani Power, MCX India, Welspun Corp and Adani Green Energy 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 Biocon, Welspun Corp, Adani Green Energy, Divis Labs, Adani Transmission, ACME Solar Holdings and JB Chemicals.
Stocks seeing selling pressure
Stocks which witnessed significant selling pressure were Aegis Vopak Terminal, . Newgen Software, Thermax, Welspun India, Aegis Logistics, MRPL and CreditAccess Grameen.
52-week low
Among the ones which hit their 52-week lows on NSE included Vedanta, ITC, PI Industries and Patanjali Foods,.
Sentiment meter favours bulls
Out of the 3,410 stocks that traded on the NSE on July 14, Tuesday, 1,022 stocks witnessed advances, 2,278 saw declines while 110 stocks remained unchanged.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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