Ahead of the market: 10 things that will determine stock action on Friday

Indian benchmark indices fell on Thursday, marking their worst monthly performance since March 2020, as record foreign inflows and weak corporate earnings dampened investor sentiment.

The NSE Nifty 50 closed down 0.56% at 24,205, while the BSE Sensex fell 0.69% at 79,389. Both benchmarks lost nearly 6% in October, their steepest monthly declines since March 2020, when the global market suffered a sharp sell-off due to the COVID-19 lockdown.

Here’s how analysts read the pulse of the market:

“The Nifty index remained volatile before closing on a negative note. On the hourly chart, it faced resistance around the 21 EMA, leading to a pullback towards 24,200. Sentiment continues to be bearish as long as the Nifty remains below 24,500. May face selling pressure towards this level.

Sharekhan Jatin Gedia by BNP Paribas said, “Nifty opened with a gap down today and saw price volatility during the day. It closed down 126 points. On the daily chart we can observe that Nifty is trading in a range of The range bound action of 24,500-24,070 from the last five trading sessions is likely to continue due to the monthly expiration of the October series derivative contracts as we witness key support levels at 24200 – 24180 while resistance is placed at 24500 – 24550.”

That said, here’s a look at what some key indicators suggest for Friday’s action:

US Market:

Wall Street was subdued on Thursday, as Microsoft and Meta Platforms issued warnings about rising AI spending, dampening enthusiasm for megacap stocks that have buoyed the market this year.

Shares of Facebook parent Meta Platforms fell 2.8%, while Microsoft fell 5.1%, despite both companies beating earnings expectations in their reports released after the market closed on Wednesday.

Additionally, the yield on the benchmark 10-year Treasury note rose slightly to 4.3%, adding further pressure on equities.

In economic news, the Personal Consumption Expenditures (PCE) price index, the Federal Reserve’s favorite measure of inflation, rose 0.2% in September, matching economists’ forecasts. However, the core PCE figure came in at 2.7%, slightly higher than the 2.6% forecast, with consumer spending also rising more than expected.

European Stocks:

Europe’s benchmark index opened lower on Thursday, and was set to record its worst monthly performance in a year, with moves driven mainly by a mixed bag of earnings.

The pan-European STOXX 600 fell 0.6% by 0812 GMT, hitting its lowest level in nearly two months.

The index is down 2.72% on the month, poised to decline for the second straight month and log its worst monthly performance since October 2023. Its previous steepest monthly decline in that period was a 1.5% decline in April.

Technology stocks fell 1.1% on the day and were the biggest drag on the benchmark.

Tech View:

Nifty opened flat and traded in a narrow range, ending the day with a negative close at 24,205, Hrishikesh Yedve, Asit C. It was the Nifty Smallcap 100 index that outperformed the benchmark, gaining around 1.15%, Mehta Investment Intermediates said.

“Technically, the Nifty has formed a red candle on the daily chart, indicating weakness, and has been consolidating between 24,000 and 24,500 for the past few sessions. A breakout on either side of this range could determine the direction ahead for the Nifty,” Yedve said.

Stocks Showing Bullish Bias:

Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on counters of Prudential Corporate Advisory, Akzo Nobel India, Mastec, Bombay Burma Trading, Vedanta Fashions and Netweb Technologies.

MACD is known for indicating the opposite trend in traded securities or indices. When 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 signaling further weakness:

MACD showed bearish signals on the counters of Sky Gold, Tube Investment of India, Persistent Systems, Mpahais and Akums Drugs & Pharmaceuticals. A bearish crossover on MACD on these counters indicates that they have started their downward journey.

Most active stocks by value:

ICICI Bank (Rs 3,045 crore), L&T (Rs 2,760 crore), Cipla (Rs 2,695 crore), HDFC Bank (Rs 1,982 crore), TCS (Rs 1,488 crore), Infosys (Rs 1,300 crore), and Tata Power (Rs 1,297 crore) crore) were among the most active stocks on the NSE in terms of value. High activity on a counter in terms of value can help identify counters with the highest trading turnover in a day.

Most active stocks in terms of volume:

Vodafone Idea (Shares traded: 64 crore), IDFC First Bank (Shares traded: 12.3 crore), PNB (Shares traded: 9.3 crore), Yes Bank (Shares traded: 6 crore), IRFC (Shares traded: 5.5 crore), RattanIndia Enterprises (shares traded: 4.7 crore), and Piramal Pharma (shares traded: 4.4 crore) among others were among the most traded stocks of the session on NSE.

Stocks showing interest in buying:

Shares of Piramal Pharma, PolyMedicare, Suven Pharma, Gillette India, Crisil and Fortis Healthcare saw strong buying interest from market participants as they scaled their fresh 52-week highs, indicating bullish sentiment.

Selling Pressure in Stocks:

No major stocks hit their 52-week lows on Thursday.

Sentiment Meter Bulls:

Overall, market breadth favored the bulls as 2,600 stocks ended in the green, while 1,329 names settled in the red.

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