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

The Indian equity market recently experienced a downturn, closing lower on Friday as renewed U.S. tariff concerns exerted pressure on IT and auto stocks. This decline, despite broader optimism regarding upcoming domestic GDP data, raises several questions about the outlook for investors.

### Market Overview

The BSE Sensex fell by 182.01 points, or 0.22%, ending at 81,451.01. Similarly, the NSE Nifty slipped 82.90 points, or 0.33%, to settle at 24,750.70. The market’s range-bound movement continues, reflecting investor caution largely driven by geopolitical happenings.

Analysts, including Vinod Nair, Head of Research at Geojit Investments, have noted that the temporary reinstatement of U.S. tariffs has led many investors to adopt a wait-and-see approach. The global markets remain at the mercy of macroeconomic factors, with the trade landscape still appearing unstable. Nair also highlighted that Foreign Institutional Investors (FII) have continued to show interest in the Indian market, buoyed by stabilizing expectations around domestic GDP data and prospects of a rate cut by the Reserve Bank of India (RBI).

### Insights from Major Markets

In the U.S., the stock market showed signs of mixed performance. The S&P 500 ended nearly flat after a volatile trading day, despite President Trump’s critical statements regarding China. His subsequent optimistic remarks on trade negotiations helped lend some support to market sentiment. The index achieved its strongest monthly gain since November 2023, which suggests that while caution prevails, there is still underlying momentum.

The Dow Jones Industrial Average managed to gain 54.34 points, or 0.13%, finishing at 42,270.07, while the Nasdaq Composite saw a decline of 62.11 points or 0.32%, closing at 19,113.77. These fluctuations illustrate the ongoing uncertainty that investors face, especially with regards to international trade.

Meanwhile, European markets ended higher, despite persistent trade-related apprehensions. The STOXX 600 index increased by 0.1%, indicating resilience amid troubling tariff negotiations.

### Technical Analysis

Technical analysis of the Nifty reveals some concerning signals. Rupak De, Senior Technical Analyst at LKP Securities, pointed out that the index has exhibited volatility with a slight negative bias. A bearish moving average crossover is evident on the shorter time frames, suggesting potential short-term weakness. The Relative Strength Index (RSI) indicates bearish momentum, and immediate support is seen at 24,700. Should the index breach this level, a decline toward 24,500 could be possible. On the upside, 24,800 may act as a significant resistance point as call writers are active here.

### Active Stocks and Trading Trends

On the BSE, several stocks lead in trading volumes and turnover. Eternal was at the forefront with a turnover of ₹11,103 crore, followed by BSE, Suzlon Energy, FSN E-Comm (Nykaa), and others. Notably, Vodafone Idea and Reliance Power were among the most actively traded stocks in terms of volume, reflecting a healthy interest in these counters during the trading session.

Buyers showed strong interest in stocks including Reliance Power, Suzlon Energy, and BSE, among others. In terms of annual performance, over 109 stocks reached their 52-week highs, while 43 stocks fell to their lows, illustrating a mixed sentiment across different sectors.

### Conclusion

Overall, market sentiment appears to be neutral, with domestic concerns regarding tariffs and the global economic climate weighing heavily on investors’ minds. The volatility in the Indian equity market emphasizes the importance of staying informed about both domestic and international developments.

As we approach next week, key factors influencing stock market action will include potential earnings announcements, macroeconomic data, and any shifts in geopolitical circumstances. Investors are advised to remain vigilant and consider the broader economic context as they navigate the complexities of market fluctuations.

In such times, being abreast of the latest news and analysis can make a significant difference in investment strategies and decisions. With a focus on both macroeconomics and technical indicators, investors can better position themselves to weather the uncertainties ahead.

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