"SEBI" Meeting Outcome & RBI Report" Pre-Market Report - Nifty & Bank Nifty 01 Oct 2024 Range
Summary
TLDRThis video discusses the negative impact of recent events on the Indian stock market, particularly on Nifty and Bank Nifty. The speaker covers key factors like Japan's political developments, China's stimulus measures, and SEBI's meeting outcomes. Additionally, the relaxation of mutual fund regulations could further hurt banks, while the RBI's latest credit review report highlights declining credit growth. Despite some positive global indicators, such as a stable US market, the overall sentiment remains weak, with bearish patterns in Nifty and Bank Nifty suggesting further declines. The video also includes technical analysis and market outlook for the day.
Takeaways
- 📉 The Indian stock market experienced a significant drop, with Nifty falling by 350 points and Bank Nifty by 850 points.
- 🇯🇵 The Japanese Prime Minister's election and upcoming general elections sparked concerns, causing a sell-off in Japanese markets, which impacted the Indian market.
- 🇨🇳 China's stimulus package, reducing mortgage interest rates by 50 basis points, benefited Indian metal stocks but led to a drain in foreign investment from Indian markets.
- 💸 Foreign Institutional Investors (FIIs) sold significant amounts in both the cash and derivative markets, contributing to the market downturn.
- 📊 SEBI's recent meeting did not change options trading regulations, but relaxed mutual fund rules, which could shift more deposits from banks to the stock market.
- 🏦 Banks are facing challenges due to reduced deposits as more young employees invest in the stock market, and SEBI's new rules may worsen this issue.
- 💳 The Reserve Bank of India (RBI) credit review report revealed a drop in credit growth, especially in the credit card segment, which negatively impacts banks' profitability.
- 📉 Bank stocks are expected to open negatively due to the SEBI mutual fund regulation changes and the RBI credit review report.
- 📈 US markets showed positive movement, with signs of potential rate cuts from the Federal Reserve, leading to positive momentum.
- 🔮 Technical analysis suggests that Nifty and Bank Nifty are showing bearish trends, with possible further weakness if key support levels are broken.
Q & A
What were the key reasons for the significant drop in the Indian stock market on September 30, 2024?
-The Indian stock market dropped due to three major reasons: Japan's political situation with a new prime minister and upcoming elections, China's stimulus package announcement affecting foreign investment in India, and profit booking in anticipation of negative outcomes from SEBI's meeting.
How did Japan's political situation impact the Indian stock market?
-Japan's political situation, with a new prime minister critical of the Bank of Japan's past policies, triggered concerns in global markets. This led to a 5% drop in the Japanese index, which had a spillover effect on the Indian market.
Why did China's stimulus package have a negative impact on Indian markets?
-China's stimulus package, which included a reduction in mortgage interest rates, drained foreign investment from Indian stocks into cheaper Chinese stocks. This contributed to the sell-off in the Indian market.
What was the outcome of SEBI's meeting that caused concern among investors?
-SEBI introduced a 'mutual fund lite' framework, allowing asset management companies to separate passive funds into new mutual funds or ETFs. This is seen as negative for banks, as it may accelerate the shift of savings from banks to the stock market.
How does the new SEBI mutual fund rule negatively affect banks?
-The new mutual fund rule is expected to divert more savings from bank deposits into the stock market, which is concerning for banks already struggling to attract deposits.
What were the key highlights of the RBI's credit information review report?
-The report highlighted a significant drop in credit growth from 19.7% to 13.6%, primarily due to lower loans to NBFCs and a slowdown in the credit card segment. However, industrial loans increased from 5.9% to 9.7%.
How did the US market perform, and what were the factors influencing it?
-The US market performed well, with the S&P 500 rising 0.42% and the NASDAQ increasing 0.36%. This was influenced by dovish remarks from Fed officials, including expectations of a return to neutral monetary policy and a potential rate cut.
What are the key support and resistance levels for Nifty and Bank Nifty based on the technical analysis?
-For Nifty, the support level is around 25,750, with resistance at 26,000. For Bank Nifty, support is seen at 52,750-52,500, while resistance is at 53,350-53,500.
What sectors showed increased open interest with negative or positive closes?
-Stocks like Hindustan Copper, Reliance, RBL Bank, SBI, Bandhan Bank, and Tech Mahindra showed increased open interest with negative closes, indicating short build-up. Meanwhile, Britannia, BPCL, ACC, IDFC First Bank, and AU Small Finance Bank had increased open interest with positive closes, indicating long build-up.
What are the key economic data releases to watch for today (October 1, 2024)?
-Key data to watch include the Indian manufacturing PMI at 10:30 AM, Europe's consumer inflation data at 2:30 PM, and US job openings and manufacturing PMI data in the evening.
Outlines
📉 Market Recap: Japan’s Impact and SEBI Meeting Concerns
In this segment, the speaker discusses the significant market decline on October 1, 2024, with Nifty falling by 350 points and Bank Nifty by 850 points. Three factors contributed to the decline: the Japanese political situation, a new Chinese stimulus package, and profit booking ahead of SEBI's meeting. The election of a Japan Prime Minister with critical views on past monetary policies caused a sell-off in Japanese markets, which had a ripple effect in India. Additionally, China's stimulus package, although positive for metals, may have led to foreign investors pulling money from Indian stocks to invest in China. The SEBI meeting also generated anxiety among traders, anticipating changes in options trading regulations, though no changes were made.
💼 SEBI Regulations and Banking Sector Worries
The speaker explains the key outcomes of the SEBI meeting and its potential negative impact on banks. SEBI relaxed mutual fund regulations by introducing the 'mutual fund lite' framework, allowing new players to enter the market. This could lead to a shift in savings from bank deposits to mutual funds, worsening the existing problem for banks that are struggling to attract deposits. The Reserve Bank of India's credit review report further indicated a drop in credit growth, particularly in the NBFC and credit card sectors. This adds more pressure on banks, contributing to additional declines in banking stocks, which were already down 2.5% in after-hours trading.
Mindmap
Keywords
💡SEBI meeting
💡Bank Nifty
💡Japanese market concerns
💡Chinese Central Bank stimulus
💡Mutual Fund Light Framework
💡RBI Credit Information Review Report
💡Open Interest
💡Dow Jones & US Market
💡FII Net Selling
💡Technical Analysis Indicators
Highlights
Discussing the SEBI meeting outcome and its negative impact on banks.
Recap of the previous day's disastrous Indian market, with Nifty falling 350 points and Bank Nifty falling 850 points.
Three primary reasons contributed to the market's losses, with one being the Japanese defense minister becoming the party leader, causing market concerns.
Japan's influence on the Indian market is significant, with any negative movement in Japan reflecting in India's market.
The second factor was China's Central Bank stimulus package, which benefited the Indian metal sector but drained foreign money from Indian stocks.
Chinese stimulus package resulted in FIA net selling for ₹9,800 crores in the cash market and ₹23,750 crores in the derivative market.
SEBI meeting did not change anything related to option trading, which was a relief for retail traders.
SEBI relaxed mutual fund regulations, allowing new players to enter the market and potentially drawing savings deposits away from banks.
RBI's credit information review report showed a drop in banks' credit growth from 19.7% to 13.6%, particularly affecting NBFC loans and credit card segments.
Credit growth to the industry increased to 9.7% from 5.9%, but the overall report was still negative for banks.
Banks ADR fell by 2.5% due to the mutual fund rule relaxation and RBI's credit review report, indicating further negative movement in banking stocks.
Global market sentiment is mixed, with Japanese markets showing negativity and US markets performing positively.
Indian markets showed potential for a flat to positive opening, with specific attention on banks and NBFC sectors.
Nifty formed a long bearish candlestick pattern and showed potential for further weakness, with support at 25,750 and resistance at 26,000.
Bank Nifty also showed weakness with support at 52,750 and 52,500, while resistance remained at 53,350 and 53,500.
Transcripts
hello everyone in this video we are
going to discuss about se's meeting
outcome and why it's negative for banks
and in addition our regular pre-market
report video for today 1st October 2024
for the IND shock market in terms of
nifty and Bank Nifty first of all just a
bit of recap as most of us know
yesterday's Indian market was disastrous
Nifty fell about 350 points and Bank
Nifty fell about 850 points regarding
the reason there were three and all
three of them to some extent contributed
the yesterday's loss in that two of them
we already discussed in the last video
but I didn't expect its impact this
sever anyway the first and foremost one
yesterday Friday's Japanese defense
minister became the party leader during
the weekend which itself kind of sparked
the concerns in the market as he was
always very much critic about the bank
of Japan's past aggressive monetary eing
hence during weekend n increased by 2%
on top of that yesterday he became the
prime minister in addition to becoming
the Prime Minister he snapped for the
new general election which was due next
year in response to all Japanese index
had a sell off and fell near 5% so as
usual I don't know how much Japan
invested in India but I have been
closely following the market in the last
2.5 years whenever Japan sneeze there
always India catches Cold anyway now
Japanese election is scheduled to take
place on o October 27th 2024 hence for
the next 27 days Japan is going to keep
on sneezing very often so that's the
first negative next second again this
also we discussed during weekend Chinese
Central Bank announced more stimulus
package like they asked their Banks to
reduce the mortgage related interest
rate to at least around 50 basis points
which is really good especially for the
Indian metal stocks so yesterday in
Indian market out of 13 major sectors
metal sector alone increased around 1.3%
all others closed negative here though
this is positive for Metals possibly
this drained and will drain the foreign
money from Indian expensive stocks and
move it to possible cheaper Chinese
stocks maybe that's the reason yesterday
in the cash Market FIA net sold for
9,800 CR rupees even on the derivative
Market also the net sold it for together
23,750 CR rupees that's the second
negative third everyone already knows
about it Market had the profit booking
since they anticipated negative news
from yesterday's sebbi meeting which
they did actually and we'll discuss in a
moment so those three negative info I
guess all together crashed the Indian
market yesterday now coming to se's
meeting as retail Traders were very
nervous and Afraid sebi haven't changed
any related to option trading like
increasing the expir day trade margin or
increasing the option lot size nothing
nothing they haven't touched any in this
meeting probably they might do in the
next meeting which is kind of relief to
the option traders who is making money
however on the negative side sebi
relaxed the mutual fund regulation by
introducing the mutual fund light
framework in this way the earlier asset
management companies can able to
separate their passive funds into a new
mutual fund or even the new player with
a profitability track record and with
required net worth can start the new
Mutual fund or ETF here you might ask
why this is negative for banks regarding
the reason already Indian banks are
worrying that they're not getting enough
deposit as most of the young employee
just investing their money into the
stock market now this new relaxed more
passive mutual fund might accelerate the
more savings deposit move from Banks to
the stock market so clearly this
relaxation move is very much negative
for banks in addition to that yesterday
in the after maret hours at 5:00 p.m.
RBA released the credit information
review report if required please pause
and have a look overall a year ago
bank's credit grown by
19.7% that now dropped to 13.6% the drop
and credit growth mainly comes from loan
to nbfc and from the credit card segment
here the credit card segment is the
important one because the margin
benefits to the banks is very huge on
the contrary loan to the industry
increased to 9 .7% from 5.9% a year ago
overall this report is very bad for
banks but according to some extent all
those already factored in the past
quarterly results so no new info but
either way because of this credit review
report or due to the mutual fund rules
relaxation last night both Banks ad are
further dropped by another additional
2.5% and also both Banks ADR got the
1.7% more negative Arbitrage so we can
expect more negative banking stock
openings today here I sincerely hope to
be wrong since yesterday just 5 minutes
before the market closing I sold 52,800
put options and hedged it by buying the
51,500 so today if this Bank ad
negativity Metalized in the bank Nifty
means then it's disastrous for me hence
hopefully I'm wrong on the positive side
it Adas were not that negative infosis
was mild negative and Vio closed mild
positive again for some reason all those
was not reflecting in the gift Nifty
early morning it closed at
2,985 equating it with the spot Market
it's indicating flat to positive opening
then regarding US market last night in
business economic conference fed
chairman spoke doly like over the time
they expect to bring the monetary policy
to neutral stands and Atlanta fed
president signaled another 50 basis
point rate cut which in turn made the US
market to close POS positive so Dow
Jones closed near flat S&P Fed Up by 42%
and NASDAQ increased 36% in case of wi
not much it dropped 1% as a summary
Global momentum is mixed I mean Japanese
Market is not good on the contrary US
market is good however gift Nifty is
indicating the flat to positive opening
on the conscious note Banks ad were
significantly negative and in addition
yesterday RBA wanted the gold loan
companies for practice and also want the
small Finance Banks and nbfc companies
so those sectors will be on Focus then
as per stock open interest Hindustan
copper Reliance rbl Bank SBI bandan Bank
Tech Mahindra and asand got an increased
in open interest along with the negative
close indicates the short belt up on the
other hand Britannia bpcl ACC idfc First
Bank and Au small Finance bank got an
increase in open interest with a
positive price close which means these
stocks got the long bud up regarding the
things to look out today Chinese and
Hong Kong market will be on holiday then
about macro first at 10:30 a.m. Indian
manufacturing PMI data is due then at
2:30 p.m. Europe's consumer inflation
data is sheded release and in the night
Us number of available job openings and
Manufacturing pay data are some of the
important items we need to keep an eye
out today coming to technical Nifty
opened 120 points gap down and it slides
throughout the session and closed below
the previous support Zone
2,850 thus on the daily chart Nifty
found a long bearish scandles pattern
indicating a bearish reversal pattern
this decline was accompanied by the
higher high negation which formed for
the previous eight consecutive sessions
in addition Nifty fell below both the
5day and 10day expon moving average with
above average volume and there was a
significant negative Divergence in the
RSI indicator which all now indicating
potential further weakness hence the
sentiment is weak in the near term with
support at
25750 a break below 25750 could lead to
further correction on the higher side
resistance is at 26,000 in case of Bank
Nifty in line with Nifty it also opened
280 points gap down and closed at below
53,000 thus on the daily chart it formed
a long bearish cand pattern and
continued its lower high lower low
formation for second session hence as
long as Bank Nifty holds below 53 , 350
Zone we could see the weakness towards
the
52750 and 52,500 level while on the
upside resistance is at
53350 and 53,500 level according to
weekly options data the maximum call
option open was at 26,000 strike
followed by 27,000 and 26,200 with
maximum new call option writing at
26,000 strike followed by 26,00 and
25,900 on the put side the max maximum
open interest was at 25,000 strike
followed by 26,000 and 25,800 with
maximum new put option writing at 25,800
strike followed by 25,600 and 25,700 th
from options data it indicates that
immediate support might be at 25,800 to
25,600 for Nifty while 26,000 might act
as the resistance so that's all in this
video hope you all got some information
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and viewers educational purpose only
thanks for watching
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