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Ahead of Market: 12 factors that will decide stock action on Tuesday

China's factory output plunged at the sharpest pace in 30 years amid the spread of coronavirus.

Last Updated: Mar 16, 2020, 09.18 PM IST
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Nifty fell to sub-9,200 level, as selling re-emerged following Friday's rebound.
NEW DELHI: Massive selloff on Dalal Street amid rising coronavirus cases in India and across the world wiped off nearly Rs 7.50 lakh crore from the domestic equity market.

From microcaps to largecaps, every segment of the market bore the brunt of bears, painting Dalal Street red. Metals were the most affected, while banks and IT stocks also came under selling pressure.

BSE Sensex cracked 7.96 per cent, or 2,713.41 points, to 31,390, while NSE Nifty index lost 7.61 per cent, or 757.80 points, to 9,197.

Ajit Mishra, VP-Research, Religare Broking, said: “The market is showing no signs of stability as the economic impact of the coronavirus is likely to be significant for many major economies. Even after the US Fed slashing interest rates to the range of 0-0.25 per cent and the introduction of a $700 billion stimulus programme, investor sentiment remained weak. Given the uncertainty and increasing spread of the virus, we expect that current choppiness could continue in the coming sessions.”

Here’s what indicators are suggesting for the stock market action on Tuesday:

RBI disappoints, saves rate cut for another day
The monetary policy committee (MPC) of the Reserve Bank of India will take the call on an interest rate cut, the central bank’s governor Shaktikanta Das said on Monday, adding that all options were on the table to counter the coronavirus blow. RBI was widely expected to cut interest rate in an emergency move to help shore up Indian economy amid the rapidly escalating global coronavirus pandemic.

Oil falls below $30 as coronavirus spreads
Brent and US crude fell below $30 on Monday as emergency rate cuts by the Federal Reserve and its global counterparts failed to tame markets and China's factory output plunged at the sharpest pace in 30 years amid the spread of coronavirus, Reuters reported. After falling below $30 level, Brent crude recovered to $30.11 at 9.00 pm IST.

S&P 500 sheds $2 trillion in value
S&P 500 companies lost more than $2 trillion in value in the first few minutes of trading on Monday as investors panicked about the mounting damage from the coronavirus pandemic on the global economy. At 9.00 pm IST, Dow Jones was trading 6.57 per cent or 1,522.91 points lower at 21,662.71. S&P 500 and Nasdaq indices were down up to 6.5 per cent.

European shares slump to 2012 lows
European shares plummeted to 2012 lows on Monday as the coronavirus pandemic raged through Europe, with dramatic monetary easing by global central banks failing to reassure investors about its growing economic damage. At 9.00 pm IST, Euro Stoxx 50 was down 4.89 per cent at 2,459.56. Key indices from the UK, France and Germany were trading up to 6 per cent lower.

F&O: Strong bear grip all over
On the options front, maximum Call open interest was at 12,000 and then 10,000 levels while maximum Put open interest was at 9,000 and then 9,500 levels. Open interest data in options lay scattered at various strike prices as many Put writers got trapped in the market fall and unwinding pressure kept the Street under pressure. The market saw Call writing at 10,000 and Put writing at 8,100 and 8,200 as the trade range slid lower. Options data indicated a shift in wider trading range to the 8,500-10,000 zone.

Tech View: Nifty likely to trade in wide range
Nifty fell to sub-9,200 level, as selling re-emerged following Friday's rebound. In the process, the index formed a Marubozu pattern on the daily chart, signalling complete dominance of the bears. As the NSE barometer saw wild swings on an intraday basis, analysts said the 50-pack index is likely to trade in a wide range of 700 points in the coming days.

CORONAGE! What's behind panic selling on D-Street?

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters YES Bank, HPCL, NK Industries and Bedmutha Industries. 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 ahead
The MACD showed bearish signs on the counters of Dewan Housing, Future Lifestyle, ARSS Infra, Weizmann, TeamLease Services, Tijaria Polypipes and Rossell India. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value terms
SBI Cards & Payment Services (Numbers of shares traded: 4319.84 crore), HDFC (2025.81 crore), RIL (1841.82 crore), SBI (1707.00 crore), HDFC Bank (1620.24 crore), ICICI Bank (1427.39 crore), TCS (1380.67 crore), Bajaj Finance (1155 crore), Infosys (1143.42 crore) and IndusInd Bank (1141.37 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 terms
Idea Cellular (Shares traded: 132.46 crore), YES Bank (16.65 crore), SBI (7.56 crore), Tata Motors (7.37 crore), SBI Cards & Payment Services (6.09 crore), GMR Infra (5.32 crore), ONGC (4.98 crore), JP Power (4.24 crore), IDFC First Bank (4.13 crore) and NCC (3.76 crore) were among the most traded stocks in the session.

Stocks showing buyers’ interest
Bafna Pharma, Geekay Wires and Ruchi Soya witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Monday signalling bullish sentiment.
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