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NEW DELHI: Domestic equity markets dropped sharply on Friday as the hawkish US Federal Reserve spooked the traders, wiping out all the gains of the relief rally. Rising inflation and poor Q4 earnings so far were the key drags.

Here’s how analysts read the market pulse:-

The interpretation of the weekly chart after the bearish Evening Star during the previous week is that the market did not respond with any intensified selling, said independent analyst Manish Shah.

Mazhar Mohammad of said it’s critical for the index to sustain above 17,149 and a failure to do so can initially extend the weakness towards 16,978 levels.

That said, here’s a look at what some key indicators are suggesting for Wednesday’s action:

US stock indices close more than 2% down, dollar at 2-yr high

US stocks tumbled on Friday while the US dollar hit a more than two-year high as investors prepared for a bevy of interest rate hikes in a global inflation fight. All three major Wall Street indices ended down more than 2% a day after Federal Reserve Chairman Jerome Powell indicated that the US central bank was preparing a half-point interest rate hike at its May meeting, with more to come. The Dow Jones Industrial Average (.DJI) closed down 2.82%, while the S&P 500 (.SPX) lost 2.77% and the Nasdaq Composite (.IXIC) dropped 2.55%.

European shares close down on rate hike fears

European stocks closed lower on Friday after Federal Reserve Chair Jerome Powell said a half-percentage point interest rate increase is “on the table” for next month. The pan-European Stoxx 600 closed down 1.8%, with mining shares slumping 3.6% to lead the losses as all sectors dipped into the red. Friday’s trading in Europe comes after a dramatic reversal in stock markets in the US Thursday, with major averages closing lower and wiping out earlier gains.

Tech View: decisively negative

Nifty50 on Friday fell below its 200-day simple moving average and formed a small bearish candle on the daily chart. On the weekly charts, it fell below the 50-period moving average and formed a long-legged Doji candle around the support level of 17,150 level, suggesting market indecisiveness.

F&O: Crucial support at 17,000-16,800

The overall positioning at the end of the week is not so convincing. First couple of sessions of the forthcoming week remains crucial for markets, said Sameet Chavan, Chief Analyst-Technical and Derivatives,

. “17300 – 17450 are to be treated as immediate hurdles; whereas on the flipside, the crucial support remains at 17000 – 16800. Traders are advised not to trade aggressively till the time trend becomes clear,” he added.

Stocks showing bullish bias

Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Marico, Sona Comstar, Barbeque Nation, Borosil, Asian Paints, Motilal Oswal, Sobha, Route Mobile, Subros among others. The MACD is known for signaling trend reversals in traded securities or indices. 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 signaling weakness ahead

The MACD showed bearish signs on the counters of Yes Bank, SBI, GAIL (India), Trent,

, Raymond and Bharat Forge. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value terms

Reliance Industries (Rs 1,923.45 crore), Adani Ports (Rs 1,564.90 crore), HDFC Bank (Rs 1,405.75 crore), Infosys (Rs 1,298.45 crore), Hindalco (Rs 1,238.26 crore), ICICI Bank (Rs 1,083.10 crore) and HDFC (Rs 1,072.68 crore) were among the most active stocks on Dalal Street 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

Coal India (Shares traded: 2.40 crore), Hindalco (Shares traded: 2.38 crore), Adani Ports (Shares traded: 1.78 crore), SBI (Shares traded: 1.68 crore), ITC (Shares traded: 1.57 crore), ICICI Bank ( Shares traded: 1.44 crore) and Tata Motors (Shares traded: 1.43 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest:

Borosil Renewables, Shree Renuka Sugars, EID Parry, Mazagon Dock, NLC India, Adani Enterprises and Angel One witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure

No stock witnessed strong selling pressure and hit their 52-week lows, signaling bearish sentiment on the counters.

Sentiment meter favors bears

Overall, market breadth favored losers as 1,382 stocks ended in the green, while 2,030 names settled with cuts.



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