Pre Market Report 08-Aug-2024
Summary
TLDRThe premarket report discusses the volatile US markets, influenced by disappointing jobs data that sparked recession fears. Global markets are jittery, awaiting the weekly jobless data and potential Fed rate cuts. Asian markets are down, with the Nifty index showing instability despite domestic institutions absorbing foreign selling pressure. The script predicts continued volatility, with the Nifty expected to consolidate between 24,000 and 25,000, highlighting the impact of the RBA policy and banking sector underperformance on market sentiment.
Takeaways
- 📉 The US markets experienced significant volatility, with a drastic fall from a 300 point plus to about 250 point minus, mainly due to the fear of recession triggered by the recent US jobs data.
- 📊 The weekly jobless data release is anticipated to cause further market jitters, as it may indicate additional economic weakness.
- 🗣️ There are rumors about the Federal Reserve possibly considering an emergency meeting to cut rates, but these are unsubstantiated and have not been confirmed.
- 🇯🇵 Japan has decided not to increase rates further, contributing to the stabilization of the Japanese market.
- 🌐 Asian markets are generally down, and the Nifty is indicated to open with a gap down of about 180 points.
- 📈 Despite foreign institutional investors (FII) selling heavily, domestic institutions are buying equally, preventing a significant market drop.
- 🔄 The Nifty future premium has expanded, and short sellers are covering their positions, indicating potential market stabilization.
- 💭 The reliability of the GIF Nifty indicator is questionable, with a history of being less than 50% accurate in volatile situations.
- 🏦 Banking stocks have underperformed significantly, with Bank Nifty falling more than the broader Nifty index.
- 📝 The Reserve Bank of Australia (RBA) policy is expected to be a non-event with no change in interest rates, but cautious commentary from the RBA Governor could affect market sentiment.
- 📊 The Nifty is expected to trade within a range of 24,000 on the downside and 25,000 on the upside, with a consolidation phase before potentially turning bullish if it crosses the recent high of about 25,000.
Q & A
What was the state of the US markets according to the script?
-The US markets were very volatile, with a drastic fall from being 300 points up to around 250 points down, mainly due to the US jobs data that triggered recession fears.
What is the significance of the weekly jobless data in the US markets?
-The weekly jobless data is significant as it can indicate further weakness in the economy, which may intensify recession fears and cause market instability.
What rumors were circulating about the Federal Reserve's actions?
-There were rumors that the Federal Reserve may consider some kind of relief, possibly not waiting until the September meeting to cut rates, but these were unsubstantiated.
How did Japan's decision on interest rates affect their market stability?
-Japan's decision not to increase the rate further contributed to the stabilization of the Japanese Market.
What was the trend observed in the Asian markets?
-Most of the Asian markets were down, with the GIF Nifty indicating a nearly 180 point gap down.
How did the Nifty's performance in the last three trading sessions compare to the expectations?
-The Nifty showed a pattern of significant gaps up and down, with a 300 point gap down on Monday, followed by a 600 point fall, and then a 200 point gap up on Tuesday with further fluctuations.
What is the role of domestic institutions in the current market scenario?
-Domestic institutions are willing to absorb the selling pressure, buying equally to the amount sold by FII, which has prevented the market from falling significantly.
What is the significance of the Nifty future premium and how did it change?
-The Nifty future premium expanded, indicating a shift in market sentiment, and it was expected to shrink with the 180 point gap down indicated by GIF Nifty.
How reliable is the GIF Nifty in predicting market movements?
-The script suggests that the GIF Nifty is not very reliable, with its predictions being less than 50% accurate in such volatile situations.
What is the potential impact of the RBA policy on the market?
-The RBA policy is expected to be a non-event with no change in interest rates, but the Governor's comments could affect market sentiment, especially if they are cautious.
What is the current situation with banking stocks and how does it compare to the overall market?
-Banking stocks have underperformed significantly, with Bank Nifty falling about 5-6% compared to the overall Nifty's fall of less than 3%.
What is the expected range for Nifty's closing and why is it important?
-The expected range for Nifty's closing is between 24,000 and 25,000. It is crucial because if Nifty closes below 24,000, it could signal a very dangerous market situation.
What does the script suggest about the market's future trend?
-The script suggests a consolidation with a positive bias, with the market expected to turn bullish if Nifty crosses its recent high of about 25,000.
Outlines
📉 US Market Volatility and Economic Recession Fears
The first paragraph discusses the highly volatile US markets, which experienced a significant drop due to disappointing economic data that triggered recession fears. The speaker mentions rumors of the Federal Reserve possibly taking emergency measures to cut rates, but these remain unsubstantiated. The Japanese market's stabilization is attributed to the decision not to increase rates, contrasting with the US market's instability. Asian markets are generally down, and the speaker notes the difficulty for other markets to stabilize if the US market does not. The paragraph also touches on the Nifty's performance in the last three trading sessions, highlighting the gap up and down movements and the potential for market stabilization due to short sellers covering their positions.
🏦 Domestic Institutions' Support Amidst Banking Sector Challenges
This paragraph focuses on the role of domestic institutions in absorbing selling pressure, which has prevented a more significant market fall. Despite foreign institutional investors selling 20,000 CR, domestic institutions have matched this with equal buying, demonstrating a strong support for the market. The speaker anticipates market volatility due to global cues and local issues, such as the RBA policy announcement. The banking sector is particularly underperforming, with Bank Nifty falling significantly more than the overall Nifty index. The speaker speculates that cautious comments from the RBA Governor could affect market sentiment and banking stocks, but also suggests the possibility of short covering leading to a rise in Bank Nifty. The paragraph concludes with a revised range for Nifty's closing and emphasizes the importance of the 24,000 level for market stability.
🚀 Hopes for Market Stabilization Amidst Weekly Expiry Challenges
The final paragraph reflects on the difficulties faced by traders due to extreme market volatility, characterized by large gaps up and down. The speaker expresses a desire for the market to stabilize after a tumultuous week and highlights the impact of such volatility on traders. The paragraph also suggests that the market's direction post the weekly expiry could be influenced by the outcome of the RBA policy and the potential for a positive bias if Nifty manages to trade above 24,000. The speaker provides a view for the next few weeks, indicating that if Nifty crosses the recent high of 25,000, it could signal the end of bearish sentiment and the onset of a bullish market phase.
Mindmap
Keywords
💡Volatility
💡Stabilization
💡Recession Fear
💡Jobless Data
💡FED
💡Japanese Market
💡Nifty
💡Futures Premium
💡Gap Up/Gap Down
💡Domestic Institutions
💡RBA Policy
💡Bank Nifty
Highlights
The US markets experienced significant volatility with a drastic fall from a 300 point plus to around 250 point minus, indicating market instability.
US jobs data from the previous Friday triggered recession fears, causing market decline.
Markets are anticipating the release of weekly jobless data, adding to the jitters and potential economic recession concerns.
Rumors suggest the FED may consider an emergency meeting and rate cuts, though no official statement has been made.
Japan's decision not to increase rates further has led to stabilization in the Japanese market.
Asian markets are generally down, with GIF Nifty indicating a nearly 180 point gap down.
The last three trading sessions show significant market movements, with a 300 point gap down, followed by a 600 point fall and subsequent fluctuations.
Short sellers started covering positions as market participants believe the market will stabilize.
Nifty future premium expanded, indicating a potential market stabilization.
GIF Nifty's reliability in predicting market movements is questioned, with a historical accuracy of less than 50%.
Despite foreign institutional selling, domestic institutions are willing to absorb the sell-off, preventing a significant market fall.
The market is expected to be volatile today due to global cues and local issues, including the RBA policy.
Banking stocks have underperformed significantly, with Bank Nifty falling more than the overall Nifty.
There is speculation that the RBA Governor may sound cautious due to external developments, affecting market sentiment.
Short covering in Bank Nifty is a possibility if the RBA Governor's statement is dovish.
Nifty's technical resistance is at 24350, and if it closes above this level, it could signal the end of bearish sentiment.
The market is expected to consolidate between 24000 on the downside and 25000 on the upside, with a positive bias.
The recent high of 25000 needs to be crossed for the market to turn bullish, indicating a potential range-bound market for the next few weeks.
The difficulty of trading during the weekly expiry due to high volatility, with significant gap-ups and gap-downs.
The hope for market stabilization to alleviate the impact of volatility on traders.
Transcripts
F this is PR Su welcome to premarket
report sponsored by delta.
exchange look at the US markets was very
very volatile yesterday evening only I
gave the title for my video are the
market
stabilizing because there were signs of
stabilization all over the world but
yesterday US market was very very
disappointing the first half of the
session uh D was around 300 point plus
from 300 point plus it came down to uh
roughly about 250 Point minus so it was
a drastic fall uh from the afternoon
Market started falling
continuously why uh mainly because last
Friday the US jobs data came so that
only triggered the recession fear and
that is how the markets fell and now
today is Thursday and today evening in
us uh the weekly jobless data will come
so probably markets are very very
jittery about it so if if that also
indicates a further weakness in the
economy you know uh this economic
recession fear will come meanwhile there
were some reports you know the FED may
consider you know um some kind of a
relief maybe you know they may not wait
until September meeting they may call
for an emergency meeting they may cut
the rates but they all seems to be rumor
so there was no substance
but at least Japan has decided they will
not increase the rate further so that is
the reason why Japanese Market
stabilized but us markets do not seems
to
stabilize uh but if us markets are not
stabilizing it'll be difficult for other
markets to stabilize so that is what you
know happening now I think most of the
Asian markets are down and the GIF Nifty
uh indicating about 180 Point gum
uh however yesterday uh if you look at
the last three trading
sessions Monday there was a 300 point
gap down and then fell for the 600 Point
minus
closing Tuesday 200 Point Gap up then me
up another 100 point then crashing all
the way 400 point then Clos
flat and yesterday what happened 200
Point Gap up and then continued the
momentum and close another 100 Point
higher so it is a 300 Point
higher now it is
indicating uh a nearly 180 point gap
down yesterday for the first time Gap up
sustained and that is why we thought you
know Market will stabilize and that is
why uh some section of the participants
uh short sellers started covering the
shs so that is why yesterday the Nifty
future premium expanded
actually right Nifty future uh premium
was almost uh 70 75
points now with this gap down about 180
points indicated by GIF Nifty you know
correspondingly Nifty may not get down
180 points uh that's because you know
Nifty future premium May shrink today so
that is one thing second thing uh how
far this GI Nifty is reliable we have
seen in the past so in this kind of
situations uh it is not even 50%
reliable uh the damage for our Market
should not be big you know why because
you know no matter what happens you know
D look at their face you sell how much
you want to sell we don't care we will
buy
equally in the last four trading
sessions
FAS have sold for 20,000 CR 20,000 CR is
approximately 2 and half billion US
dollar you know uh this is a big figure
once upon a time I remember if FIA sell1
billion you know Nifty will fall 3 4% 2
and half billion fall Nifty would have
fallen about
10% but nowadays that is not happening
why because domestic institutions are uh
willing to absorb no matter how much the
f are selling so F have sold for 20,000
CR in last four pred session the
domestic institutions bought
equally uh same 20,000 CR so because of
that you know markets did not fall much
so sometime know huge gap up you know
domestic institutions may come and place
a buy order in the morning itself they
will try to stabilize but anyway our
Market is going to be volatile today
because in addition to the global cues
we have a local issue that's a RBA
policy though RBA policy is expected to
be a
non-event uh number one there is no
going there's going to be no change in
interest rate but however RBA governance
comment and because of this uh uh
Japanese Market fell more than 10% on
single day us economic recession and
this and that so uh this external
developments so there is a possibility
RBA Governor may sound very
cautious usually RBA Governor has always
been uh optimistic but this time he may
sound some cautious cautious and that
may affect some
sentiment but in fact the banking stocks
have been hugely underperforming
and Nifty has not even uh Nifty has
fallen about
3% not even 3% from the high but Bank
Nifty I think it has fallen about 5
6% so it is because of defensives uh and
uh other sectors you know the markets
are looking good uh not so bad but
whereas uh the problem in banking sector
continues so uh there can be you know uh
there is a possibility you know
intentionally if ARB Governor speaks uh
doly and if there is a short covering in
Bank Nifty uh that that possibility is
also not ruled out but you remember that
is what happened yesterday because the
people did not want to carry short
position ahead of the RBA policy so that
is why they uh covered the shorts that
is why the bank Nifty shot up more than
200 point in last 30 minutes so that is
the kind of move is expected as I told
you uh Nifty you know uh yesterday I
told you looking at the open interest
Nifty is likely to close between 24100
and
24500 maybe now may have to revise the
uh downside Target to maybe
24,000 so people who are conservative
they they have sold 24,000 fo and 24500
call so it's likely to be in this
range now once again because there a 200
Point Gap gap down so we may have to
speak this one you know markets are
taking support at
24,000 multiple times at least four five
times in the last one and half month so
therefore you know it's very very
crucial that Nifty do not close below
24,000 that's one thing so number one if
Nifty closes below 24,000 it's going to
be very very
dangerous now on the higher side okay
Nifty technically became short at
24350 and after that markets were very
very volatile but Nifty has never
crossed that
24350 as in when it went close to that
you know the selling came and I uh so
therefore if Nifty Clos
above 24 350 you know so we can say this
bearishness is over but at the same time
bullishness may not set in in that case
we can safely assume that Nifty is going
to trade between 24,000 on the downside
25,000 on the upside it's going to be a
consolidation probably consolidation
with the kind of a positive
bias then Market will turn bullish only
you know uh if Nifty crosses uh the uh
the recent high that is about
25,000 so that is a view for the next
few weeks right so last few last two
trading sessions the India came down but
probably now you know with this kind of
gap down the India may go higher so
anyway so this is a weekly expiry once
this is over this week you know weekly
expir Traders you know positional
Traders got into lot of trouble because
Gap up gap down Gap up Gap down a gap up
then come down you know Gap up then
continue the rally you know it was a
very very difficult week so let us hope
that this difficult week is over at
least the markets start stabilizing the
market going up and down is not a
problem but you know 200 Point Gap up
then 200 300 Point Fall then 200 point
gap down then 300 point up so this
volatility kills the Traders so let us
hope Market stabilize at some point of
time so the volatility has been uh the
main thing in this week highlight so
hope you enjoyed watching this video
thank you for watching
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