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

The Indian stock market extended losses for the fifth consecutive session, with Sensex and Nifty tumbling more than 1% intraday before paring most of the losses and closing 0.4% lower each on Friday, as oil prices above $100 per barrel, FII selling and other factors spooked investors.

Sensex fell 332 points to close at 76,059.77, while Nifty 50 declined 102 points to end the session at the 23,767 mark during Friday’s trading session. Broader markets also saw a sharp recovery after a crash in the morning trading hours, with the Nifty Midcap 50 index closing in the green.

Here’s how analysts read the market pulse
Market sentiment is likely to remain under pressure in the near term, as sustained oil prices in a higher range could begin to adversely impact key macroeconomic indicators and growth dynamics, said Vinod Nair, Head of Research at Geojit Investments. He noted that the US 10-year yield has climbed to a 52-week high despite crude oil trading well below its crisis-era peak, reflecting the bond market’s concerns over energy-led inflation risks, resilient labour market conditions, and a persistently hawkish Fed.”These factors have pushed the implied probability of a rate hike in September. Washington’s new tariffs on imports added another headwind for export-driven economies, with technology-heavy markets having been hit the most, as higher rates weigh on growth and investors are increasingly seeking to diversify their concentrated exposure to other emerging market opportunities. Bank Nifty outperformed, supported by favourable valuations and credit growth outlooks,” he added.

US stocks

The Nasdaq declined on Friday as a sell-off in chip stocks weighed on sentiment, driven by growing investor concerns over the scale of spending on artificial intelligence ahead of key megacap earnings. The S&P 500 ended largely flat, with weakness in the technology index offsetting broader support from lower oil prices despite ongoing Middle East tensions.

Investor enthusiasm for Big Tech also softened after Alphabet signalled plans to increase capital expenditure, intensifying worries about sustained cash burn in AI. Market participants are now cautious as they await earnings from Microsoft, Amazon, Meta and Apple, with rising scrutiny on the returns from heavy AI investments.

European markets

European markets closed higher, with the pan-European STOXX 600 rising 0.8%, recovering from the previous session’s decline and marking a second straight week of gains. The uptick was supported by easing oil prices, which provided some relief to equities.

However, sentiment remained cautious as bond yields stayed elevated amid inflation concerns. The European Central Bank kept rates unchanged, while markets continue to price in a strong probability of a rate hike in September, even as economic data from Germany and France showed signs of improvement.

Tech view
“The Nifty slipped from the consolidation on the daily chart on Thursday, with follow-up selling taking the index to 23,600 on Friday. Besides, the index has fallen below the 50 EMA as well, confirming a new downtrend for the short term. Immediate support is placed at 23,600. A fall below 23,600 might trigger a severe correction, as investors would be running away, putting the Nifty at greater downside risk. On the higher end, 24,000 will become the line of polarity. Unless the Nifty moves higher to reclaim 24,000, the broader trend is likely to remain weak,” said Rupak De, Senior Technical Analyst at LKP Securities.

Most active stocks in terms of turnover
Infosys (Rs 2,991 crore), Bajaj Finance (Rs 1,864 crore), HDFC Bank (Rs 1,770 crore), ICICI Bank (Rs 1,553 crore), IndiGo (Rs 1,423 crore), SBI (Rs 1,392 crore) and RIL (Rs 1,251 crore) were among the most active stocks on NSE in value terms. Higher activity in a counter in value terms can help identify the counters with the highest trading turnovers during the day.

Most active stocks in volume terms
Vodafone Idea (traded shares: 38.28 crore), Yes Bank (traded shares: 5.38 crore), Suzlon Energy (traded shares: 4.53 crore), Ola Electric (traded shares: 4.05 crore), Eternal (traded shares: 3.7 crore), Canara Bank (traded shares: 3.67 crore) and JP Power (traded shares: 3.45 crore) were among the most actively traded stocks in volume terms on NSE.

Stocks showing buying interest
Action Construction Equipment, KPIT Tech, PVR Inox, RR Kabel, Atul, Tata Elxsi and Dr Lal Pathlabs were among the stocks that witnessed strong buying interest from market participants.

52-week high
Among the stocks that hit their 52-week highs on NSE were Laurus Labs, Nuvama Wealth Management, Lloyds Metals and Sona BLW Precision.

Stocks seeing selling pressure
Stocks that witnessed significant selling pressure included Go Digit General Insurance, Motilal Oswal, Syrma SGS, Ami Organics, ITD Cementation, HFCL and Chennai Petro.

52-week low
Among the stocks that hit their 52-week lows were Go Digit General Insurance, UTI AMC, IndiaMART, KEC, RVNL, RIL and IRFC.

Sentiment meter favours bears
Out of the 3,425 stocks that traded on the NSE on Friday, July 24, 1,702 advanced, 1,595 declined, while 128 remained unchanged.

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