" 200 Pts Gap down & RBI surprise!" Pre-Market Report Analysis, Nifty & Bank Nifty 08 Aug 2024 Range
Summary
TLDRIn this video, the host discusses the anticipation of the RBI's interest rate decision amidst a global stock selloff. The market expects a pause at 6.5%, but surprises could occur if the rate is cut or raised. The script also covers the US market's reaction to a government bond auction and tech stock performance, while highlighting key factors like GDP growth rate and inflation forecasts that could impact Indian markets. Technical analysis of Nifty and Bank Nifty suggests potential pullbacks, with crucial resistance and support levels identified. The video concludes with a reminder for viewers to subscribe and consider the content for educational purposes only.
Takeaways
- 📉 The global stock selloff over the past week overshadowed the RBI interest rate decision.
- 🏦 Most investors expected the RBI to maintain the interest rate at 6.5% for the eighth consecutive time.
- 📊 There could be surprises if the RBI changes its decision, especially considering past interest rate changes.
- 💡 The RBI's decision can significantly impact the market, especially if it deviates from expectations.
- 🔍 Investors should watch for changes in the monetary stance, GDP growth rate projections, and inflation targets.
- 📈 Any change in the RBI's stance from 'withdrawal of accommodation' to 'neutral' could be disastrous for the market.
- 📉 Changes in GDP growth rate projections from 7.2% could influence market sentiment.
- 📉 Inflation projections for the fiscal year and quarters could also impact the market.
- 💧 The current liquidity surplus in the Indian banking system is positive, but measures to reduce liquidity could negatively affect banking stocks.
- 📈 In the US market, positive momentum was dampened by higher yields and a semiconductor stock miss, affecting the S&P 500, Dow Jones, and NASDAQ.
Q & A
What is the main topic of the video script?
-The main topic of the video script is the anticipation of the Reserve Bank of India's (RBI) interest rate decision and its potential impact on the stock market, particularly focusing on Nifty and Bank Nifty, as well as a review of the previous day's US market and other global economic indicators.
What is the general expectation regarding the RBI's interest rate decision?
-The general expectation is that the RBI will keep the interest rate unchanged at 6.5% for the eighth time in a row, which most investors consider a 'no change' or 'non-event' scenario.
What could be considered a surprise in the RBI's interest rate decision?
-A surprise could occur if the RBI decides to cut the interest rate, as this would be unexpected given the current market consensus of maintaining the status quo.
What historical voting patterns in the RBI's Monetary Policy Committee (MPC) meetings suggest potential for a rate cut?
-In the past, there have been instances where MPC members have voted for smaller rate increases or a pause in rate adjustments, indicating a potential for a rate cut if a majority of members vote for it in the current meeting.
What are the three additional factors the market will be looking for in the RBI's policy meeting?
-The market will also be looking for the RBI's stance on monetary policy, the GDP growth rate forecast, and the inflation targets for the year and the upcoming quarters.
What does a 'withdrawal of accommodation' in the RBI's monetary policy stance imply?
-A 'withdrawal of accommodation' implies that the RBI is leaning towards a rate cut, which is a more accommodative monetary policy to stimulate the economy.
How did the US market perform the previous night, and what factors influenced it?
-The US market opened positively but closed with significant losses due to factors such as a higher yield at the US Government's 10-year note auction, which raised demand concerns, and poor earnings reports from a major semiconductor company.
What was the performance of Indian ADRs in the US market?
-HDFC Bank ADR closed positive, while Infosys and Wipro closed with gains in the Indian market, but turned negative in the US ADRs, with Vio down over 1%.
What is the current liquidity surplus in the Indian banking system, and how might it affect the market?
-The Indian banking system currently has a liquidity surplus of around 2.8 lakh crore rupees, which is generally positive for the market. However, if the RBI announces measures to reduce liquidity for inflation control, it could be seen as negative, particularly for large banking stocks.
What technical indicators suggest a potential pullback for Nifty?
-Nifty defended its 50-day exponential moving average around 24,000, and both hourly and daily RSI momentum indicators are indicating a positive crossover, suggesting a potential pullback.
What are the key support and resistance levels for Nifty and Bank Nifty based on the script?
-For Nifty, the key resistance level is 24,400 with significant upside potential only if it fills the bearish gap around 24,700, while the crucial support level is at 24,000. For Bank Nifty, the resistance zone is 50,600 to 50,800, with crucial support at 49,800 to 49,700.
Outlines
📉 Stock Market Reaction to RBI's Interest Rate Decision
The video script discusses the anticipation of the Reserve Bank of India's (RBI) interest rate decision amidst a global stock selloff. It suggests that most investors expect no change, with the rate likely to remain at 6.5% for the eighth consecutive time. However, the speaker highlights the potential for surprises based on past voting patterns of the Monetary Policy Committee (MPC) members. The script also outlines other factors that could impact the market, such as the RBI's stance on monetary policy, GDP growth rate forecasts, inflation targets, and liquidity measures. The speaker advises viewers to be cautious as any deviation from the expected 'pause' could significantly move the market.
📈 Analysis of Global and Indian Market Performance
This paragraph provides an overview of the previous day's market performance, focusing on the US market's initial positive opening due to global momentum, which later declined due to the US government's bond auction and poor earnings reports from a semiconductor company. The script also touches on the performance of Indian ADRs, with HDFC Bank ADR being a notable positive performer. It discusses the Indian market's reaction to the US market's downturn and the significant selling by institutional investors. The speaker provides a technical analysis of Nifty and Bank Nifty, highlighting key support and resistance levels, and discusses the impact of weekly options data on market expectations. The video concludes with a cautionary note against making investment decisions based solely on the content provided, emphasizing its educational purpose.
Mindmap
Keywords
💡RBI interest rate decision
💡monetary policy
💡Nifty and Bank Nifty
💡GDP growth rate
💡inflation
💡liquidity surplus
💡global stock selloff
💡MPC (Monetary Policy Committee)
💡market sentiment
💡technical analysis
Highlights
Global stock selloff over the past 7 days has been significant.
Expectations for the RBI interest rate decision today are varied, with many anticipating no change.
RBI is expected to keep the interest rate at 6.5% for the eighth consecutive time.
There is potential for surprises in the interest rate decision.
Previous RBI meetings have seen changes in voting patterns among MPC members, influencing rate decisions.
Any deviation from a pause in the interest rate will significantly impact the market.
Market will also focus on the monetary stance, GDP growth rate, and inflation targets.
A change in the monetary stance to neutral would be negative for the market.
RBI's projected GDP growth rate is 7.2%; changes to this projection will affect market sentiment.
Inflation targets for the year and quarters are closely watched and any changes will impact the market.
Liquidity surplus in the Indian banking system is currently positive, but measures to reduce it for inflation control could be negative.
Bank Nifty shows nervousness compared to Nifty due to interest rate uncertainties.
US market opened positively but faced profit booking due to higher yields on government notes and a semiconductor stock miss.
Indian ADRs showed mixed performance, with HDFC Bank positive and Infosys and Wipro closing positive in Indian markets but negative in US ADR.
Technical analysis indicates potential pullback for Nifty and Bank Nifty with key support and resistance levels identified.
Options data shows significant positions at specific strike prices, indicating market expectations.
Investors are advised to be cautious based on the RBI policy decision and other market factors.
Other important items to watch include the Bank of Japan summary, US weekly jobs insurance data, and Fed balance sheet.
Transcripts
hello everyone in the midst of global
stock selloff over the past 7 days I
completely forgot and missed about the
RBS interested decision today so in this
video Let's look first what we can
expect on the monetary policy meeting
and then after that we'll discuss about
our regular pre-market stuff for today
8th August 2024 for the stock market in
terms of nifty and back Nifty trust me
there is a high chance of surprise today
and let me tell why so without delay
let's get started I mean we know there
has been Lots going on the world right
now in addition to that one of the
reason why the market didn't give much
importance to this RB interested
decision is as most investors expecting
it as a no change or non-event like The
Wider expectation is that the RBI will
keep the interest rate same or pause at
6.5% for the eighth time in a row but I
think there are two ways where we can
have some surprises for example if reord
please pause and have a look between m
to September 2022 RBA was increasing the
interest rate at the rate of 50 basis
Points each then at the September
meeting first time MPC member Ashima
goyel voted 35 basis point increase
rather than the 50 basis point increase
then in the following MPC meeting in
December 2022 five members voted for 35
basis point increase which was the
reduction from the regular 50 basis
point increase in the last four times I
mean following the goyal terms and in
the same meeting jant Verma voted for
the pause in the interestate decision
after that in February 2023 both jant
Verma and goyel both voted to PA the
interest rate but still on the February
MPC meeting other four voted to increase
25 basis point so on the February month
as an outcome RBI increased 25 basis
points but after that for eight times or
around one year rway kept the interest
rate unchanged 6.5% then between March
and April for time only jant Verma voted
to cut the interest rate by 25 basis
points still the majority other five
voted to keep it PA at 6.5% however in
the last June month meeting two MPC
members jant Verma and Ashima goyel both
voted for 25 basis points interest rate
cut so today by chance other two members
voted to cut the interest rate decision
means then that is a huge surprise in
the market I mean most probably cutting
the interest rate is always positive but
there are instances Market took those as
negative as well like demand concern
hence as I said anything other than
pause will drive the market
significantly today so please be
cautious interested decision is at 10:00
a.m. in the morning in addition to this
Market will look for three other things
monetary stands GDP growth rate and
inflation yearly and quarterly Target I
mean the June month monetary stand is
withdrawal of accommodation which means
means the stands tilted towards the rate
cut by chance if they changed that to
neutral stands means then it's
disastrous for the market second in the
last MPC meeting for the present
Financial year RBI increased the
projected GDP growth rate to 7.2% from
7% so now if RBI maintains the GDP
growth rate to 7.2% means then it's
neutral if they reduce it to 7% then
it's negative by chance if they increase
it to 7.5% means then that will be very
much bullish for the market moving on if
record please person and have a look in
June month monetary policy meeting for
this whole financial year RBI forecasted
4.5% inflation and for q1 4.9 and for Q2
3.8% again if there is any change in the
number means then the market will
possibly react to it and finally after a
long time only at the present Indian
banking system system having the
liquidity surplus of around 2.8 lakh CR
rupees which is positive but if RBI
announces any measures to reduce the
liquidity for the inflation control
purpose means then that will be
considered as negative for the banking
stocks particularly the large one that's
one of the reason why Bank Nifty is
little nervous compared to Nifty okay
that's it that's all I want to discuss
about the today's RB policy meeting
let's move to the US market last night
because of the very good Global momentum
US market opened 1.5% positive however
around 10:00 a.m. eastern time US
Government 10e note auctioned for higher
yield due to demand concern which then
started the profit booking in addition
super micro computer one of the semic
stock missed the analyst estimation so
that fell around 20% and dragged down
the whole semiconductor index so overall
S&P 500 from around 1.5% positive
earlier it dropped to around 8% negative
whereas Dow Jones down 6% and NASDAQ
down above 1% in case of vix it's
roughly same as Tuesday night around 28
only oil sector closed to positive
because oil price increased over 3%
since the US Oil stock inventory fell
below expectation at the time of this
video Bren crude trading around 79 us
per barrel whereas W grud closed at 75.5
per barrel regarding Indian ADR in line
with the Indian market only HDFC Bank
ADR closed positive of around 2% whereas
both infosis and vipro closed positive
of 2% in Indian market that in US ADR
turned negative especially Vio which was
down over 1% in case of ICC Bank it was
flat to negative so overall Banks looks
okay or mixed but it stocks seems
negative in line with that GI Nifty at
the early morning today it closed at
24140 equating it with the spot market
for now it's indicating the gap down
opening of 200 to 240 points about
institution again yesterday fi was Mega
net sellers looks like they're not
stopping the selling yesterday the net
sold for approximately 3,300 CR rupees
whereas da net bought for 3,800 CR
rupees so as a summary there is no
concrete negative news that I'm aware of
but because of US market was down and
the gift Nifty is indicating over 200
points gap on opening however as I said
please be cautious based on RBA policy
the market can turn around about the
things to look out before our Market
opening Bank of Japan summary is due to
release then at 10: a.m. RBI interestate
decision and in the night for us Market
weekly jobs Insurance data 30-year Bond
auction and fed balance sheet are some
of the important items we need to keep
an eye out today coming to technical
Nifty opened 300 points Gap up and it
was positive throughout the session I'm
guessing due to short covering however
it was very much range bound and closed
near the opening
24,300 thus on the daily chart Nifty
formed a DOI cic pattern hence again
Nifty defended 50-day exponential moving
average around 24,000 and in addition
both hourly and daily RS momentum
indicator indicating a positive
crossover so all these parameters are
indicating that Nifty expects to have a
pullback hence the next level to watch
on the higher side will be
24,400 but significant upside potential
is Possible only if Nifty fills the
large bearish gap that created on last
Monday which is around 24,700 Zone Above
This 25,000 level becomes the next
crucial Point while 24,000 Remains The
crucial support level in case of Bank
Nifty it also opened 500 points Gap up
and re bounded finally closing at around
,1 120 thus on the daily chart Bank
Nifty formed a small bearish cic pattern
with a long lower Shadow this long lower
Shadow means Market was pulled down by
the sellers but the lower level buying
supported the market in the late hours
hence Bank Nifty can witness a pullback
over the next few trading sessions till
50,600 to 50,800 from short-term
perspective on the downside 49,800 to 4
9,700 is the crucial support Zone
regarding the weekly options data the
maximum call option open add was at
25,000 strike followed by 24,800 and
24,500 with maximum new call option
writing at 24,700 strike and then 24,600
and 24,400 on the put side the maximum
open was at 24,000 strike followed by
24,00 and
23,500 with maximum new put option
rating at 20 24,00 strike and then
24,200 and 24,300 that's from options
data 24,500 to 24,600 is the resistance
Zone on the higher side with support at
24,000 to 24,00 level so that's all in
this video hope you all got some useful
information please consider subscribing
the channel and liking the video so it
will help me beat the YouTube algorithm
and also motivate me to do more please
don't make any investment decision based
on this as advisor I'm doing this for me
and viewers educational purpose only
thanks for watching
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