Ahead of Market: 10 things that will decide stock market action on Tuesday

Indian benchmark indices witnessed heavy selling pressure on Monday, marking their third straight session of declines, as broad-based weakness across sectors dragged markets sharply lower. Banking, automobile and energy counters led the slump amid sustained risk aversion among investors. The Nifty50 tumbled 360.30 points, or 1.49%, to finish at 23,815.85, while the BSE Sensex sank 1,312.91 points, or 1.70%, to close at 76,015.28.

Meanwhile, the volatility gauge India VIX ended at 18.55, down by 10.16% from the last closing.

Here's how analysts read the market pulse:

Rupak De, Senior Technical Analyst at LKP Securities said the index has given a consolidation breakdown on the daily chart, suggesting a heightened risk of a larger bearish phase. It has slipped below both the 50 EMA and 20 EMA, confirming a weakening trend. The RSI, a momentum oscillator, is in a bearish crossover and indicates increasing downside pressure, he said.

"Overall, the index appears vulnerable in the short term. Immediate support is placed at 23,700, below which the decline may accelerate further. On the upside, resistance is placed at 24,000, above which sentiment could improve," De added.

US markets

The S&P 500 and the Nasdaq climbed to intraday record highs on Monday, extending last week's rally, as strength in chip stocks offset a jump in oil prices sparked by stalled U.S.-Iran talks.

U.S. President Donald Trump's swift rejection of Iran's response to a U.S. peace proposal stoked worries that the 10-week-old conflict could drag on and keep shipping through ‌the Strait of Hormuz ⁠paralyzed. That ⁠sent crude prices up almost 3%.

Even so, higher oil prices have so far done little to knock the broader market off course. The S&P 500 and the Nasdaq both closed at record highs on Friday, supported by upbeat corporate earnings, renewed optimism around semiconductor stocks and a solid monthly payrolls report that pointed to continued resilience in the U.S. economy.

That resilience could face a fresh test this week as the earnings season winds down and investors turn to key economic data.

European Markets

European shares ended Monday's session flat, constrained by a drop in luxury stocks, while stalled U.S.-Iran peace negotiations drove oil prices higher and also kept investors cautious.

The pan-European STOXX 600 closed little changed at 612.79 points. Regional indexes moved in different directions, with Italian stocks edging 0.8% ‌higher, while France's CAC ⁠40 ⁠slipped 0.7%.

Luxury stocks led declines among sectors, falling 3.4% and were also the worst performing on the STOXX 600 this year. LVMH lost more than 4.4%, while Hermes and Burberry fell more than 3.3% each.

Tech View

Nilesh Jain, Vice President - Head of Technical and Derivative research at Centrum Finverse said Nifty has slipped below its immediate support at the 50-DMA placed near 23,950 levels. The index formed a large bearish candle on the daily chart and also witnessed a breakdown below its rising trend line support, indicating weakness in the short-term structure, he said.

"Immediate support is now seen at 23,800 levels, and a breach below this may drag the index towards 23,550 in the near term. On the upside, a move above 24,000 could trigger short covering and lead to a pullback towards 24,200 levels. The momentum indicators have turned negative as the MACD has generated a fresh bearish crossover, while the RSI has slipped below the 50 mark, reflecting weakening strength. On the volatility front, India VIX jumped nearly 10% to close around 18.50 levels, and any sustained move above the 20 mark could further increase nervousness among market participants," Jain added.

Most active stocks in terms of turnover

Adani Ports and Special Economic Zone (APSEZ, Rs 659 crore), Bharti Airtel (Rs 518 crore), State Bank of India (SBI, Rs 384 crore), HDFC Bank (Rs 249 crore),

Vodafone Idea (ACE, Rs 196 crore), Asian Paints (Rs 298 crore) and Tata Consumer (Rs 146 crore) were among the most active stocks on BSE in value terms. Higher activity in a counter in value terms can help identify the counters with highest trading turnovers in the day.

Most active stocks in volume terms

Vodafone Idea (Traded shares: 1.63 crore), YES Bank (Traded shares: 1.27 crore), SpiceJet (Traded shares: 1.08 crore), Ola Electric (Traded shares: 76.24 lakh), Suzlon Energy (Traded shares: 66.77 lakh), JP Power (Traded shares: 61.31 lakh) and HFCL (Traded shares: 46.19 lakh) were among the most actively traded stocks in volume terms on BSE.

Stocks showing buying interest

Tata Consumer Products, Max Healthcare Institute, Coal India, Vodafone Idea, Hyundai Motor, Multi Commodity Exchange (MCX) and Sasken Technologies were among the stocks that witnessed strong buying interest from market participants.

52-week high

Today, 198 stocks hit their 52 week highs while 27 stocks slipped to their 52-week lows. Among the ones which hit their 52 week highs included Acutaas Chemicals, Adani Green energy, Bajaj Consumer Care, CG Power and Industrial Solutions, Grasim Industries and MCX.

Stocks seeing selling pressure

Among the large cap names were Titan Company, InterGlobe Aviation (Indigo) and State Bank of India (SBI). Other stocks which witnessed significant selling pressure were Canara Bank, Swiggy, Sika Interplant Systems, Genesys International Corporation, Urban Company, Kalyan Jewellers India.

Sentiment meter favours bears

Sensex settled lower dragged by RIL, HDFC Bank and Bharti Airtel as the market breadth stood negative. Out of the 4,538 stocks that traded on the BSE on May 11, Monday, 1,358 stocks witnessed advances, 3,000 saw declines while 180 stocks remained unchanged.

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