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Rising number of coronavirus cases in India and the world took a heavy toll on Dalal Street on Tuesday, as the domestic stock market reversed decent early gains to end over 2 per cent lower.
Bank and financial stocks took the biggest hit, pushing the market to a three-year low.
Rising volatility has been keeping investors worried.
Vinod Nair, Head of Research at Geojit Financial Services said: “After trading in the positive zone for the major part of the day, the indices turned red during the last hour, with selling mainly seen in financials.
European markets and Dow futures added to the negativity.
Covid-19 showed no signs of abatement and with central banks monetary policy actions having limited impact, calls were out for more actions to contain the spread of the virus.”
Here’s what indicators are suggesting for the stock market action on Wednesday:Wall Street gains on Fed reliefUS stocks reversed early losses to trade higher on Tuesday as the Federal Reserve said it would relaunch financial crisis-era purchases of short-term corporate debt to thaw credit markets strained by the coronavirus pandemic, Reuters reported.
At 8.45 PM IST, Dow Jones Industrial Average was up 335.84 points, or 1.66%, at 20,524.38, the S-P 500 was up 57.81 points, or 2.42%, at 2,443.94.
The Nasdaq Composite was up 281.37 points, or 4.80%, at 7,185.96.
European stock market rebound fizzles outEuropean shares retreated after an initial bounce on Tuesday as damage being heaped on companies and economies across the globe from the coronavirus grew and kept financial markets on edge.
At 8.30 PM IST, Euro Stoxx 50 was mildly in the green at 0.11 per cent, while FTSE 100 and DAX were down up to 0.69 per cent.
Tech View: Nifty forms bearish candle; next stop 8,555Nifty on Tuesday slipped below the 9,000 mark for the first time since March 2017 and formed a long bearish candle on the daily chart.
This was the second session when the index formed a lower high.
The index is in the deep oversold territory as suggested by the 14-day RSI indicator, but given the prevailing sentiment, analysts say it can revisit the recent low of 8,555.
F-O: Use any bounce as a selling opportunityDespite the market being in the oversold territory, it is not seeing a sustainable bounce in the benchmark index, which is a negative sign for the market.
Considering the overall chart structure, traders should refrain from taking long positions, as all global markets are in strong bear grip.
Once can use any small bounce as a selling opportunity.
At its current juncture, Nifty’s resistance levels have shifted lower to 9,400 and then 9,600 levels, while support is seen at 8,550.
Stocks showing bullish biasMomentum indicator Moving Average Convergence Divergence (MACD) on Tuesday showed bullish trade setup on the counters of India Cements, Omaxe, KCP Sugar, IL-FS Investment, Pricol, Lotus Eye Hospital, Cigniti Technologies, Motor - General, Ind-Swift Labs, Jayant Agro and Palash Securities.
The MACD is known for signalling trend reversals in traded securities or indices.
It is the difference between the 26-day and 12-day exponential moving averages.
A nine-day exponential moving average, called the signal line, is plotted on top of the MACD to reflect ‘buy’ or ‘sell’ opportunities.
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 aheadThe MACD showed bearish signs on the counters of Bharti Infratel, Bhansali Engineering, BASF India, Sical Logistics, Rajshree Sugars, Pearl Polymers and Xelpmoc Design.
Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.
Most active stocks in value termsRIL (Numbers of shares traded: 2149.78 crore), HDFC Bank (2096.78 crore), ICICI Bank (1836.11 crore), SBI (1460.19 crore), IndusInd Bank (1270.94 crore), YES Bank (1237.54 crore), HDFC (1206.41 crore), SBI Cards - Payment Services (1098.61 crore), Axis Bank (1054.21 crore) and TCS (964.39 crore) were among the most active stocks on Dalal Street on Thursday 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 termsVodafone Idea (Shares traded: 69.87 crore), YES Bank (22.35 crore), Tata Motors (7.18 crore), SBI (6.54 crore), ITC (4.77 crore), ICICI Bank (4.72 crore), ONGC (4.67 crore), SAIL (4.53 crore), Zee Entertainment (3.69 crore) and Indiabulls Housing Finance (3.53 crore) were among the most traded stocks in the session.
Stocks showing buyers’ interestShares of GSK Cons Health, Bafna Pharma, Geekay Wires and Ruchi Soya witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Tuesday, signalling bullish sentiment.
Stocks seeing selling pressureZee Entertainment, Manappuram Fin, Century Text, TTK Prestige and Future Retail stood among 340 firms that witnessed strong selling pressure and hit their 52-week lows, signalling bearish sentiment on these counters.
Sentiment meterOverall, market breadth remained in favour of bears.
As many as 351 stocks on the BSE 500 index settled the day in the red, while 145 settled the day in red.
Five stocks remained unchanged.
Stocks in oversold zoneAs many as 59 stocks crossed below the 30-mark on Relative Strength Index (RSI) to enter the ‘oversold’ territory.
They included Muthoot Finance, HDFC Life Insurance, Subex, Edelweiss Financial Services, Jaiprakash Associates and IRCTC, among others.
The RSI oscillates between zero and 100.
Traditionally the RSI is considered overbought when above 70 and oversold when below 30.
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Ahead of Market: 12 things that will decide stock action on Wednesday
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