"Why US Election Result May not Tonight?" Pre-Market Report - Nifty & Bank Nifty 05 Nov 2024 Range

Summary

This video analyzes the impact of the U.S. presidential election on global and Indian markets, highlighting the potential delays in election results due to postal ballots and their effects on investor sentiment. The Indian stock market showed negative trends, with Nifty and Bank Nifty facing bearish movements due to increased short positions in the derivatives market. The video also covers key technical indicators, open interest analysis, and stock movements, with a focus on critical support and resistance levels. Viewers are encouraged to stay cautious amid market volatility and key upcoming events.

Takeaways

• 😀 The US presidential election, House of Representatives election, and Senate races are causing global market volatility, with a high probability of delayed results due to postal ballots.
• 😀 A significant percentage of voters, particularly in states like Arizona (90%) and Georgia (65-70%), have opted for postal ballots, leading to delayed election results.
• 😀 The delayed results in the 2020 US election could be repeated this time, with analysts expecting similar disruptions in market behavior.
• 😀 The US market closed negatively ahead of the election, with the Dow Jones, S&P 500, and NASDAQ all showing losses, which is affecting Indian market sentiment.
• 😀 Indian proprietary investors are bracing for volatility due to the delayed US election results, and this uncertainty is reflected in ADRs, which are showing negative trends.
• 😀 Nifty closed below 24,000, showing a bearish candlestick pattern, with the 200-day exponential moving average around 23,500 acting as key support.
• 😀 Bank Nifty faced downward pressure but held above 15,200, with short-term support at 15,000 and resistance at 15,800.
• 😀 Stock movements are showing mixed signals, with stocks like RBL Bank and IDFC First Bank indicating short positions, while others like Tech Mahindra are seeing long positions.
• 😀 The Indian market's immediate outlook is flat to negative, as indicated by gift Nifty and ADR movements, reflecting global market pressures.
• 😀 Key macroeconomic data points to watch include the Chinese service PMI, UK PMI, and US election results, which will influence market movements throughout the day.

Q & A

Why is there a high chance of delayed results in the US election?

The delay is primarily due to a significant number of voters opting for postal ballots, with states like Arizona and Georgia having 65-90% of voters casting their ballots by mail. Additionally, some states allow postal ballots to be counted up to four days after Election Day, which could extend the result declaration period.

What is the potential impact of the delayed US election result on the market?

Market participants, particularly Indian proprietary investors, are expecting a delay in the US election results, similar to the 2020 presidential election. This uncertainty may lead to increased market nervousness and volatility, which has been observed in global market movements, such as the negative closing of US indices.

How did the US election uncertainty affect global markets?

The uncertainty surrounding the US election results contributed to negative performance in global markets. For instance, the Dow Jones, S&P 500, and NASDAQ all closed lower. The market also saw a slight increase in oil prices due to OPEC+ decisions, further adding to global market instability.

Why did Nifty and Bank Nifty experience a downtrend despite positive trading conditions?

The downtrend was mainly driven by proprietary traders in the derivatives market, who reduced their long positions and increased short positions. This shift in market sentiment led to a bearish outlook, even though there was some positive market news and earnings reports.

What was the role of proprietary traders in the market movement?

Proprietary traders played a significant role in pushing the market down. They reduced their long positions in index futures from 43% to 38% and increased short positions from 57% to 62%. They also heavily sold call options, contributing to the overall bearish market sentiment.

What is the current market outlook for Nifty and Bank Nifty?

The market outlook for both Nifty and Bank Nifty remains negative. Nifty is trading below all key moving averages, with 23,500 being the key support level. Bank Nifty is facing resistance at 15,800, and if it breaks below 15,000, it may face further downside pressure.

What is the significance of open interest analysis in predicting market trends?

Open interest analysis provides insights into market sentiment by showing whether positions are being built up or reduced. For example, an increase in open interest along with a negative price close suggests short buildup, whereas an increase in open interest with a positive price close signals long positions being built.

How did the Fed's interest rate decision impact the market?

The market closed negative ahead of the Fed's interest rate decision, likely due to uncertainty about how the decision could affect the broader economy. The market's negative performance, particularly in the US, was influenced by this looming event.

What are the key levels to watch in the Nifty and Bank Nifty markets?

For Nifty, the 23,500 level is a crucial support, and resistance is at 24,300. For Bank Nifty, the support is around 15,000-15,200, with resistance at 15,800. Market movements around these levels will be crucial in determining the near-term direction.

What are the implications of the global economic data being released during the market hours?

Global economic data, such as the UK's PMI data and US trade and PMI data, can significantly impact market movements. These releases often lead to increased volatility, influencing market sentiment and investor behavior, particularly if they deviate from expectations.