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

Indian equity benchmarks witnessed another session of heavy selling on Tuesday, marking their fourth consecutive day of declines, as weakness persisted across sectors with IT, banking, automobile and consumer stocks bearing the brunt of the pressure. The NSE Nifty50 dropped 436.30 points, or 1.83%, to end at 23,379.55, while the BSE Sensex tumbled 1,456.04 points, or 1.92%, to settle at 74,559.24.

Meanwhile, the volatility gauge India VIX ended at 19.28, down by 3.92% from the last closing.

Here's how analysts read the market pulse:

Commenting on the technical trends, Rupak De, Senior Technical Analyst at LKP Securities, said the index has continued to decline as bears tighten their grip on the Indian market. Nifty has further broken away from its recent consolidation range, indicating rising weakness in the trend.

"The RSI continues to remain in a bearish crossover and is trending lower, reflecting sustained negative momentum. Overall sentiment appears extremely bearish, with the potential to drag the index towards 23,200–23,150 in the near term, from where a meaningful recovery might come. On the higher side, resistance is placed at 23,600, above which sentiment might improve," De said.

US markets

Wall Street's main indexes edged lower on Tuesday, with the S&P 500 and the Nasdaq pulling back from record highs after a hotter-than-expected inflation report and fading hopes for a swift resolution to the Middle East conflict.

U.S. consumer prices rose at a brisk pace for a second straight month in April, pushing annual inflation to its highest level in nearly three years and reinforcing expectations that the Federal ‌Reserve will keep ⁠interest rates ⁠unchanged for longer.

The Consumer Price Index increased 3.8% last month on an annual basis, while economists polled by Reuters had expected a 3.7% rise.

European Markets
Most major European indices traded in the red on Tuesday. UK’s FTSE 100 was trading lower at 0.47% at 2:33 p.m. BST (7:18 India time) while Stoxx 600, French CAC, Germany's Dax and Spain's IBEX 35 fell between 0.79% and 1.29%.

Tech View
Nilesh Jain, Vice President - Head of Technical and Derivative Research at Centrum Finverse said the market remained under pressure for the fourth consecutive session, with the Nifty breaching its crucial support at 23,500 levels and sustaining below the same.

The broader structure has turned bearish, indicating further weakness in the near term, with the index likely to move towards the gap area placed near 23,150 levels, he said, while not ruling out a pullback after the recent sharp decline. "Any bounce is likely to witness selling pressure at higher levels. The momentum indicator MACD has given a bearish crossover, while the RSI has slipped below the 50 mark, reflecting weakening momentum. On the volatility front, India VIX surged nearly 10% to close around 18.50 levels. Any sustained move above the 20 mark could further elevate nervousness among market participants," Jain said.

Most active stocks in terms of turnover
Billionbrains Garage Ventures (Groww, Rs 565 crore), Reliance Industries (RIL, Rs 353 crore), Balkrishna Industries (Rs 240 crore), Bharti Airtel (Rs 159 crore), State Bank of India (SBI, Rs 159 crore), Swiggy (Rs 139 crore) and HDFC Life Insurance Company (Rs 136 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: 6.63 crore), Groww (Traded shares: 3.07 crore), YES Bank (Traded shares: 1.29 crore), JP Power (Traded shares: 1.12 crore), Suzlon Energy (Traded shares: 86.36 lakh), Swiggy (Traded shares: 53.43 lakh) and Adani Power (Traded shares: 51.84 lakh) were among the most actively traded stocks in volume terms on BSE.

Stocks showing buying interest
Butterfly Gandhimathi Appliances, Asian Star Company, Zaggle Prepaid Ocean Services, Sasken Technologies, Semac Construction, Central Mine Planning & Design Institute and Jindal Drilling And Industries were among the stocks that witnessed strong buying interest from market participants.

52-week high
Today, 93 stocks hit their 52 week highs while 45 stocks slipped to their 52-week lows. Among the ones which hit their 52 week highs included Acutaas Chemicals, Apar Industries, Corona Remedies, Fractal Analytics, HFCL, MCX, Novartis India and Polycab India.

Stocks seeing selling pressure
Among the large cap names were ONGC, Hindalco Industries and SBI. Other stocks which witnessed significant selling pressure were Dynamic Cables, Anant Raj, Thangamayil Jewellery, Vodafone, Premco Global, Manorama Industries and Regaal Resources.

Sentiment meter favours bears
Sensex settled lower dragged by RIL, HDFC Bank and ICICI Bank as the market breadth stood negative. Out of the 4,410 stocks that traded on the BSE on May 12, Tuesday, 782 stocks witnessed advances, 3,500 saw declines while 128 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)