Dalal Street Week Ahead: AUGUST 3RD Week | 2024 | P R Sundar

Summary

In the 'Street Week Ahead' program, P Sund discusses the turbulent global markets, with the Japanese market falling over 10% and US markets crashing, affecting Indian markets as well. Despite the volatility, markets are stabilizing as Japan halts interest rate hikes and US economic data improves. The focus shifts to inflation data, with Indian and US reports expected. Sund dismisses the impact of the Hindenburg report on the stock market, as allegations against the Adani Group are not expected to cause a second shock. He predicts a normal market reaction, with retail and mutual fund investments supporting market stability.

Takeaways

• 📉 The last week was a brutal week for global markets with significant drops, especially in the Japanese market which fell over 10%.
• 📈 Despite the initial downturn, markets are showing signs of returning to normal with Japan announcing no further interest rate increases and US economic data not being as bad as previously reported.
• 🔍 Geopolitical tensions between Iran and Israel are not escalating, which is helping markets to stabilize.
• 📊 This week, markets will be focusing on various economic data releases, including Indian inflation data and US producer price index, consumer price inflation, and retail sales data.
• 💡 The speaker does not expect the Hindenburg report to have a significant impact on the stock market, as markets typically do not react to the same bad news twice.
• 📉 The first allegation against Adani caused a shock and a drop in the market, but the second allegation is not expected to have the same effect as the market has already adjusted to such news.
• 🤔 There was speculation about who the Hindenburg report would target, but now that it's released, other companies like Reliance and HDFC Bank are safe from unwarranted selling pressure.
• 📉 Adani Enterprises' stock has underperformed, falling over 10%, while the Nifty has risen by nearly 8% since the election results, suggesting insider knowledge of the report may have influenced the market.
• 💰 The speaker predicts that as long as retail money continues to flow into the market and mutual funds, the market will not fall significantly despite any allegations.
• 📉 The speaker suggests that the market opening might see some reaction to the Hindenburg report, but overall, it will be a normal market day.
• 👋 The speaker will provide more insights in a pre-market report the following morning, indicating ongoing analysis and updates.

Q & A

What was the market situation described in the script for the last week?

The last week was described as brutal for global markets, with significant falls in the Japanese market by more than 10%, followed by a crash in US markets, and a subsequent impact on Indian markets with a gap down of about 300 points. The market experienced high volatility with large daily gaps up or down.

Why did the speaker forget to do the 'Street week ahead' program last week?

The speaker forgot due to being preoccupied with a workshop in Chennai and only remembered just now, indicating a last-minute realization and preparation for the program.

What economic developments were mentioned as reasons for the market recovery towards the end of the week?

The recovery was attributed to Japan's announcement of not increasing interest rates further, better-than-expected US economic data, and the de-escalation of geopolitical tensions between Iran and Israel.

What financial data will the markets be focusing on during the week discussed in the script?

The markets will be focusing on various inflation data releases, including Indian inflation data on Monday evening, US producer price index on Tuesday, Consumer Price inflation data on Wednesday, and retail sales data on Thursday.

What is the speaker's view on the impact of the 'Hiden' report on the stock market?

The speaker does not expect any significant impact from the 'Hiden' report on the stock market, as markets typically do not react to the same bad news the second time around, and the report's allegations are the second time they are being made against the Adani group.

What was the speaker's famous statement regarding market reactions to news?

The speaker's famous statement is that markets do not react to the same bad news the second time. The first occurrence is a shock and a surprise, but by the second time, the market has already factored in the news.

What is the speaker's opinion on the allegations against the 'SE CH person' and their potential impact on the stock market?

The speaker believes that the allegations against the 'SE CH person' will not affect the stock market because they are an individual and their investments in Adani group stocks are not significant enough to impact the market.

Why did the speaker suggest that Reliance and HDFC Bank would not be affected by the 'Hiden' report?

The speaker suggested that Reliance and HDFC Bank would not be affected because the 'Hiden' report was released, clarifying that the allegations were not against these entities, and thus, they would not come under selling pressure.

What was the speaker's previous advice regarding Adani group stocks and Nifty before the parliament election results?

The speaker had advised to short Adani group stocks and go long in Nifty before the parliament election results, anticipating a favorable government outcome.

How does the speaker explain the underperformance of Adani stocks despite a favorable government?

The speaker suggests that the underperformance might be due to insiders already knowing about the allegations and that this information could have been reflected in the market prices, causing Adani stocks to fall while Nifty went up.

What is the speaker's prediction for the market's reaction to the 'Hiden' report release?

The speaker predicts that there will not be a significant market reaction to the 'Hiden' report release, as it is the second time allegations are being made, and the market has already adjusted to such news.