"US Market recovered !! Indian Market? " Nifty and Bank Nifty, Pre Market Report , 07 Aug 2024 Range

Summary

The pre-market report for August 7, 2024, discusses the global market's reaction to US selloffs and Japan's Nikkei index recovery. It highlights Nifty's correlation with the S&P 500 and the negative bias due to India's long bull run and higher valuation concerns. The US market's positive close, influenced by Morgan Stanley's non-recession stance, suggests a potential Nifty gap-up opening. However, US future market's negative turn indicates a flat to negative opening. Key Indian market news includes the finance bill's changes and Q2 results of PA Industries and Comins India. Technical analysis shows Nifty and Bank Nifty's bearish patterns, with potential support and resistance levels outlined.

Takeaways

• 📉 The Japanese index Nikkei dropped 12.3% but recovered 10%, still down 11% from the previous Wednesday, indicating unresolved issues.
• 📈 The US market showed signs of recovery with S&P 500 gaining 10%, though profit-taking trimmed the gains, closing with a positive note.
• 🔗 Nifty's price movements closely followed the US futures market with a slight negative bias, indicating a continued trend today.
• 📊 Nifty's rate of change is compared with the US S&P 500, showing a 5% difference in positivity when S&P was 1.5% up compared to Nifty's 1%.
• 📉 Jefferies released a statement highlighting a higher risk of downside in the Indian market due to the longest Bull Run in the last 3 years.
• 💼 Foreign Institutional Investors (FIIs) were net sellers in the Indian market, selling around 2,000 to 5,000 crore rupees each day, with a net sell of 3,530 crore rupees yesterday.
• 📊 US market's positiveness was due to buyers returning as the market dipped and Morgan Stanley's statement easing recession fears.
• 🔄 The VIX index dropped 28%, indicating reduced market volatility.
• 📊 Nifty is expected to open with a gap up of 70 to 100 points based on US spot market closing and future market price action.
• 📉 However, the US future market dropped around 5% in the early hours, suggesting a flat opening for Nifty instead.
• 🏢 The Indian government provided an option for taxpayers to choose between the old indexation method with 20% capital gain tax or the new flat 12.5%, whichever is lower, which is positive for the real estate sector.

Q & A

What was the main focus of the pre-market report video for 7th August 2024?

The main focus of the pre-market report video was to analyze the previous day's market activities, particularly the correlation between the Nifty and the US future market, the impact of the Japanese market, and the potential direction of the Nifty and Bank Nifty for the day.

How did the Japanese index Nikkei perform on the day before the report?

On the day before the report, the Japanese index Nikkei had gained back 10% after previously dropping 12.3%, but it was still down around 11% from the previous Wednesday, indicating that the issue in Japan's market was not completely resolved.

What was the relationship between Nifty's price action and the US future market as described in the video?

The video described a close relationship between Nifty's price action and the US future market, with Nifty following the US market movements but with a slight negative bias.

What was the reason for the negative bias in the Indian market according to the video?

The negative bias in the Indian market was attributed to Jeff's statement about the higher risk of downside due to the longest Bull Run rally in the last 3 years, higher market valuation, and the higher capital gain tax that might be preventing fresh foreign money from entering the market.

What were the significant factors contributing to the US market's positiveness as mentioned in the video?

The significant factors contributing to the US market's positiveness were buyers returning to the market as it dipped and Morgan Stanley's statement easing recession fears by suggesting that the US market is not in a slump and does not require an immediate rate cut.

How did the VIX index behave during the period discussed in the video?

The VIX index dropped by 28% and moved around 28 again, indicating a decrease in market volatility.

What was the expected opening for Nifty based on the US spot market and future market price action?

Based on the US spot market and future market price action, Nifty was expected to open with a gap up of around 70 to 100 points.

What was the government's response to the backlash over the removal of indexation in the finance bill?

In response to the backlash, the government provided an option through the finance bill for people to use either the old indexation method with 20% capital gain tax or the new flat 12.5% capital gain tax, whichever is lower.

Which stocks were expected to be in focus due to their Q2 results as per the video?

PA Industries and Comins India, which beat analyst estimates, and Glenmark Pharma, whose profit fell by 26% missing analyst estimates, were expected to be in focus.

What technical indicators suggested a weak short-term trend for Nifty according to the video?

The video mentioned a bearish shooting star pattern with an upper shadow on the daily chart, negative RSI and MS momentum indicators, and back-to-back negative candles in the last two sessions, all indicating a downtrend continuation.

What were the key resistance and support levels for Nifty as per the options data mentioned in the video?

The key resistance levels for Nifty were at 24,200 to 24,500, with immediate support at 23,700, as per the options data mentioned in the video.