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

Indian headline indices ended with gains on Tuesday, recording their second successive positive closing aided by buying trends in IT, consumer and financial stocks, though energy and metals dragged markets. While Nifty settled at 25,725.40, advancing 42.65 points or 0.17%, the 30-share BSE Sensex closed at 83,450.96, gaining 173.81 points or 0.21%.

Meanwhile, the volatility gauge India VIX ended at 12.67, down 4.93% from the last closing.

Here's how analysts read the market pulse:

Commenting on the day's action, Rupak De, Senior Technical Analyst at LKP Securities said Nifty has continued its recovery but is facing resistance near the 50DMA on the higher side. The LKP Securities analyst expects the index to remain rangebound or witness a minor pullback, given the rejection at this critical moving average.

"The RSI has also entered a bearish crossover, indicating weakening momentum. On the upside, resistance is placed at 25,800, above which the index could witness further strength. However, failure to move past 25,800 may trigger long unwinding, potentially dragging the index back toward the 25,500 level," De said.

US markets

Wall Street stocks opened on a mixed note Tuesday, with artificial intelligence-related disruption concerns continuing to pressure markets following the long weekend.

Experts said the downturn in technology and AI shares persisted into the morning session. Investors have become increasingly aware of the scale of AI-driven capital expenditure and are now questioning how long it will take for those investments to generate meaningful returns.

They said that when a single sector builds excessive momentum, a pullback is often inevitable, and the prevailing negative sentiment may need time to fully play out.

European Markets

Major European indices traded mixed around 12:44 p.m. GMT (6:29 pm India time) with UK's FTSE 100 and Spain's IBEX gaining around 0.3%, each around this time. Meanwhile, French CAC 40, Stoxx 600 and Germany's DAX were trading flat though the bias was mildly negative.

Tech View

Nilesh Jain, Vice President & Head of Technical and Derivative Research at Centrum Finverse said Nifty's upward momentum extended for the second straight session, helping it close above its 100-DMA near 25,700, indicating improving strength. However, the index is facing resistance around the 50-DMA placed at 25,750 and a decisive breakout above this level could pave the way for further upside towards 26,000, he opined.

"On the downside, immediate support has shifted higher to 25,600. Meanwhile, India VIX cooled off sharply, declining by nearly 5% to slip below the 13 mark. Any further easing in volatility is likely to remain supportive of bullish sentiment. Overall, the broader structure continues to look positive, and a buy-on-dips approach should be maintained as long as the Nifty holds above the 25,400 zone," Jain said.

Most active stocks in terms of turnover

Newgen Software Technologies (Rs 267 crore), Infosys (Rs 255 crore), Larsen & Toubro (L&T, Rs 205 crore), IndusInd Bank ( Rs 185 crore), Wipro (Rs 140 crore), Hindustan Copper (Rs 128 crore) and Arvind SmartSpaces (Rs 127 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

EaseMyTrip Bank (Traded shares: 3.21 crore), Vodafone Idea (Traded shares: 2.74 crore), Ola Electric (Traded shares: 1.23 crore), SpiceJet (Traded shares: 1.18 crore), Wipro (Traded shares: 65.21 lakh), YES Bank (Traded shares: 52.27 lakh) and New Gen Software Technologies (Traded shares: 51.07 lakh) were among the most actively traded stocks in volume terms on BSE.

Stocks showing buying interest

Fractal Analytics, Infosys, Newgen, Praj Industries, Onesource Special Pharma, Aegis Vopak Terminals and PCBL were among the stocks that witnessed strong buying interest from market participants.

52 Week high

Today, 116 stocks hit their 52 week highs while 144 stocks slipped to their 52-week lows. Among the ones which hit their 52 week highs included Aye Finance, Bank of India (BoI), Force Motors, Jindal Steel, L&T and Lupin.

Stocks seeing selling pressure

Among the large cap names were Eternal, Tata Steel and Trent. Other stocks which witnessed significant selling pressure were Kwality Wall’s, Ola Electric, Engineers India Limited (EIL), Hindustan Copper, Brainbees Solutions (FirstCry), GMDC and SRF.

Sentiment meter favours bulls

The action in heavyweights like L&T, Infosys and ITC aided the markets the most as the breadth stayed positive in broader markets. Out of the 4,352 stocks that traded on the BSE on February 17, Tuesday, 2,427 stocks witnessed advances, 1,786 saw declines while 139 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)