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Ahead of Market: 12 things that will decide stock action on Monday

Nifty needs to breach the 8,900-9,000 range, before instilling confidence among investors.

Last Updated: Mar 29, 2020, 04.02 PM IST
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As many as 241 stocks on the BSE 500 index settled the day in green on Friday, while 258 settled the day in red.
NEW DELHI: Equity market was left less than impressed after the Reserve Bank of India Governor Shaktikanta Das refrained from making projections for growth and inflation in his media address, where he announced a slew of measures to support the economy, including a whopping 75 basis points cut in repo rate.

Das said the projected annual GDP growth was at risk due to the uncertainty created by the outbreak of the deadly virus.

BSE Sensex on Friday ended at 29,815.59, down 131.18 points against the previous close of 29,946.77. The 50-share Nifty settled 18.80 points higher at 8,660.25.

Earlier in the day, positive global cues and hopes of an economic package by RBI had led to the domestic benchmarks surging before slipping from day's high after the central bank’s announcement.

While experts are happy with the steps taken, they, however, feel that the market will be dictated by the evolving situation on the Covid-19 crisis and its implications on the economy and corporate earnings.

"Indices ended almost flat following RBI measures to lessen the burden on borrowers and to increase liquidity in the system. The market was up in the last two sessions on expectations of these announcements from the government and RBI. Now since the expected events are out of the way, focus will be back on the spread of the virus and its damage on the already reeling economy," says Vinod Nair, head of research at Geojit Financial Services.

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

Wall St tumbles as US virus cases pass 100,000
Wall Street stocks tumbled on Friday, ending a massive three-day surge after doubts about the fate of the US economy resurfaced and the number of coronavirus cases in the country climbed, Reuters reported. The Dow Jones Industrial Average slumped 4.06 per cent to end at 21,636.78 points, while the S&P 500 lost 3.37 per cent to 2,541.47. The Nasdaq Composite dropped 3.79 per cent to 7,502.38.

European shares fall after 3-day rally
European shares closed in the red after EU lawmakers failed to agree on a coronavirus rescue package and British Prime Minister Boris Johnson announced he had been infected. The pan-European STOXX 600 index started the day about 2 per cent lower, then closed down 3.3 per cent after the announcement about Johnson's test. London bluechip stocks had extended losses after the news, closing 5.3 per cent down.

Did RBI rate cut not go down well on D-Street?

Tech View: Nifty50 has resistance at 8,900-9,000
Nifty formed a small bearish candle on the daily chart. Analysts said the index needs to breach the 8,900-9,000 range in the near term, before instilling confidence among market participants. The index managed to break a double bottom pattern on the intraday chart, but was unable to close above the same. This signalled that the structure is still negative and the index needs to close above the 8,900 level for a change in momentum, said Rohit Singre of LKP Securities.

F&O: Nifty's overall structure still negative
Nifty started April derivatives series on a positive note as there was a decent gapup opening in the market on the back of favourable cues from global bourses. Nifty moved above the 9,000 mark in early trade, but failed to sustain at higher levels and corrected sharply by more than 500 points from the intraday high. The overall chart structure is still negative, but a pullback move of the ongoing corrective phase cannot be ruled out after the sharp decline of last six weeks.

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Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Friday showed bullish trade setup on the counters including Tata Motors, NCC, NHPC, Canara Bank, MothersonSumiSystems, NMDC, Wipro, Cipla, NBCC (India), LIC Housing, TCS, Biocon, IFCI, PC Jeweller, HFCL, MMTC, Indian Overseas Bank, Central Bank, ITI, Sterlite Technologies, Berger Paints, Colgate, PVR and PTC India. 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.

Most active stocks in value terms
Axis Bank (Rs 2691.49 crore), HDFC Bank (Rs 2549.23 crore), ICICI Bank (Rs 2494.96 crore), SBI (Rs 2317.42 crore), RIL (Rs 2037.71 crore), Bajaj Finance (Rs 1961.93 crore), IndusInd Bank (Rs 1953.15 crore), HDFC (Rs 1609.64 crore), Kotak Bank (Rs 1439.51 crore) and Infosys (Rs 881.98 crore) were among the most active stocks on Dalal Street on Friday 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
YES Bank (Shares traded: 11.86 crore), SBI (Shares traded: 11.47 crore), Vodafone Idea (Shares traded: 10.58 crore), Ashok Leyland (Shares traded: 8.00 crore), ICICI Bank (Shares traded: 7.28 crore), Axis Bank (Shares traded: 7.10 crore), Tata Motors (Shares traded: 5.88 crore), IDFC First Bank Ltd. (Shares traded: 4.74 crore), IndusInd Bank (Shares traded: 4.39 crore) and Federal Bank (Shares traded: 4.23 crore) were among the most traded stocks in the session.

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

Stocks witnessing selling pressure
Cummins India, TVS Motor, Oberoi Realty, Future Retail and CreditAccess Grameen witnessed strong selling pressure in Friday’s session and hit their 52-week lows, signalling bearish sentiment on these counters.

Sentiment meter
As many as 241 stocks on the BSE 500 index settled the day in green, while 258 settled the day in red.
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