Pre Market Report 10-Jan-2025

Summary

The video discusses the current state of global markets, highlighting a bearish trend driven by concerns over US economic data, particularly monthly jobs and inflation reports. Asian markets are down, and GIFT Nifty indicates a lower opening. While mutual fund inflows provide some support, a significant selloff by foreign institutional investors raises concerns. TCS's dividend announcement is seen as both positive for shareholders but potentially negative for the broader market, particularly IT stocks. The market faces uncertain short-term movement, with critical support levels around 23,500 for Nifty. The outlook remains cautious, with the possibility of a reversal depending on upcoming data and stock performance.

Takeaways

• 😀 US markets are closed yesterday, and US futures are lower today due to jittery reactions around monthly jobs data.
• 😀 The Nifty is expected to open lower than yesterday's low, which is a worrying sign for the market.
• 😀 If Nifty breaks the 23,500 support level, the next major support could be at the November low of around 23,270.
• 😀 TCS has declared a 76 rupee dividend, which may lead to a fall in its stock price, potentially affecting Nifty calculation.
• 😀 Despite the TCS dividend announcement, the market may already have priced in most negatives after a 10-12% fall in the stock.
• 😀 Retail investments in mutual funds have hit a record high, with 41,000 crore rupees flowing into the market.
• 😀 FII selling of 7,000 crore rupees raises concerns about the market's outlook, especially when there's no specific economic news or event.
• 😀 HDFC Bank has been falling consistently for the past five trading sessions, leading to questions about its future movement.
• 😀 Midcaps and smallcaps have been performing poorly, while large-cap stocks have been supporting the market, but the sustainability of this trend is uncertain.
• 😀 Today's trading session is crucial as it's the first after corporate results started coming in, with key results expected next week.
• 😀 Despite current bearish market conditions, there is always a possibility of a market reversal, and it's essential to watch how the first 30-45 minutes of trading unfold.

Q & A

Why are US futures lower today according to the script?

US futures are lower because the day when monthly jobs data or inflation data is released, US markets tend to be very jittery. The market is reacting to the anticipation of important data, including the monthly jobs data.

What does the performance of the GI Nifty indicate?

The GI Nifty indicates that Nifty is expected to open lower than yesterday’s low. This is a bad sign, as it suggests the market might break below key support levels.

What is the key support level for Nifty mentioned in the script?

The key support level for Nifty mentioned is 23,500. If this level is broken, the next support is at the November low, which is around 23,270.

How has Nifty performed after testing 23,270 in November?

After testing the 23,270 level in November, Nifty had a strong recovery, rising by nearly 1,500 points to close near 24,800.

What issue is associated with TCS in the script?

TCS is expected to be volatile due to its announcement of a 10-rupee interim dividend and a 66-rupee special dividend, totaling 76 rupees. While this is positive for shareholders, it could lead to a drop in TCS’s spot price, which may impact the Nifty calculation.

How does TCS’s market weight compare to Infosys in the Nifty index?

TCS is not considered an index heavyweight because it has less public shareholding compared to Infosys. Infosys, with higher public shareholding, is more significant in terms of market capitalization.

What is the good news mentioned in the script?

The good news is that retail investments in mutual funds have hit a record high, with 33 new fund offers launched last month. In total, about 41,000 crore rupees were invested, with 26,000 crore coming from retail investors.

What was the bad news related to FII activity?

The bad news is that Foreign Institutional Investors (FIIs) sold a significant amount, 7,000 crore rupees, in the Indian market without any major news or events triggering the sell-off. This raises questions about when the selling might stop.

What is the outlook for mid-cap and small-cap stocks in the script?

Mid-cap and small-cap stocks have been performing poorly in the past two trading sessions, with large-cap stocks providing support to the market. The script raises questions about whether large-cap stocks will continue to outperform and provide market support.

What is the expected range for Nifty according to the script?

The expected range for Nifty is between 23,300 and 24,000. There is a possibility of breaking the downside by another 200 points, but this range is anticipated for the next few sessions.