"Dow Jones All Time High & HDFC Bank Business Update" Pre-Market Report 07 Oct 2024 Range Analysis

Summary

The video provides a pre-market report for October 7, 2024, focusing on key market developments. The Indian stock market experienced a sharp decline, with Nifty falling 4.5% due to global factors such as Japan's election and the Middle East conflict. Sectors like Auto, Finance, and Oil dropped significantly, while Metals gained due to China's stimulus. HDFC Bank's Q2 update showed positive growth, but concerns remain about loan-to-deposit ratios. The US market showed optimism with strong job data, pushing indices higher. Nifty is expected to open positively, with critical support and resistance levels highlighted.

Takeaways

• 📉 Last week, Nifty experienced a massive 4.5% fall due to Japan's general election trigger and the Middle East conflict escalation.
• 📊 Sector-wise performance saw all sectors down, except metals, which were positive due to China's stimulus.
• 🏦 HDFC Bank's Q2 update showed a 15% deposit growth and a 7% credit growth, with a slight increase in the Kasa ratio to 35%.
• 🛑 Nifty closed below its 50-day exponential moving average, forming a bearish candlestick pattern.
• 💡 FIIs were net sellers for the fifth consecutive day, with significant sell-offs in the index future and stock markets.
• 🇺🇸 US non-farm payroll data for September was strong, with 254,000 jobs added, reducing recession fears and boosting optimism for a soft landing.
• 💼 US markets closed positive, with Dow Jones up by 0.81%, S&P 500 by 0.9%, and NASDAQ by 1.22%.
• 🚢 Concerns about the Middle East conflict could impact reliance on oil exports, with potential disruptions in shipping and insurance.
• 📝 Nifty's technical indicators suggest weakness, with key support at 24,750 and resistance at 25,200-25,400 levels.
• 📅 The Reserve Bank of India (RBI) is expected to keep interest rates unchanged for the 10th consecutive time, with a potential market reaction on Wednesday.

Q & A

What were the main factors that caused the Nifty to fall by 4.5% last week?

The main factors causing the Nifty to fall by 4.5% last week were Japan's general election and the escalation of the Middle East conflict, which led to a massive Foreign Institutional Investors (FII) sell-off.

Which sector performed positively last week, despite the overall market downturn?

The Metals sector performed positively last week due to the stimulus announced by China, while all other sectors were down.

What were the key highlights from HDFC Bank's Q2 business update?

HDFC Bank's Q2 update showed a 15% growth in deposits, a 7% increase in credit, and an improvement in the CASA ratio from 34% to 35%. The loan-to-deposit ratio dropped from 110% to 101%, which is still high compared to other banks.

How did FIIs and DIIs behave in the Indian cash market on the previous Friday?

FIIs were net sellers for the fifth consecutive day, selling around ₹9,900 crores, while Domestic Institutional Investors (DIIs) were net buyers, purchasing around ₹8,900 crores.

How did the US market perform after the release of the non-farm payroll data for September?

The US market closed positively, with Dow Jones up 0.81%, S&P 500 up 0.9%, and NASDAQ rising by 1.22%. This was due to strong non-farm payroll data, with job additions significantly above expectations, lowering recession fears.

What is the current outlook for the Nifty based on technical analysis?

The Nifty has formed a bearish candlestick pattern with lower highs and lower lows for four consecutive days. It is facing selling pressure at higher levels and closed below the 50-day exponential moving average, indicating weakness.

What are the key support and resistance levels for the Nifty and Bank Nifty?

For Nifty, 24,750 is the key support, with resistance at 25,200 to 25,400. For Bank Nifty, 51,000 is the support level, while 52,000 to 52,500 is the potential relief rally target if it holds above 51,000.

What does the open interest data suggest for the Nifty and Bank Nifty?

Open interest data shows that Nifty's key support is around the 24,500 zone if it breaks 25,000. For Bank Nifty, 25,500 and 26,000 are the resistance levels based on maximum call option open interest.

How is the escalation in the Middle East conflict affecting the Indian market, particularly Reliance?

The Middle East conflict could negatively affect Reliance due to its dependency on oil exports to Israel and Europe. The escalation may increase shipping and insurance costs, and in the worst case, disrupt shipping completely.

What are the market expectations for the upcoming RBI Monetary Policy Committee meeting?

The market expects the RBI to keep the interest rate unchanged for the 10th consecutive time. However, if the RBI unexpectedly cuts the rate, the market could react violently.