"Dow Jones down 400 pts, Will Nifty ?? " Pre-Market Report - Nifty & Bank Nifty 08 Oct 2024 Range

Summary

In this pre-market report for October 8, 2024, the video discusses recent trends in the Nifty and Bank Nifty markets, highlighting a six-session losing streak in Nifty. IT stocks like Infosys and Tech Mahindra showed positive trends, while HDFC Bank experienced volatility. The report also touches on the global market impact, including the rise in oil prices due to intensified Israel conflict and strong US jobs data, which has influenced US bond yields and market sentiment. The video concludes with insights on technical levels for Nifty and Bank Nifty, predicting potential market movements.

Takeaways

• 📉 Nifty closed negative for the sixth straight session, falling over 1,400 points.
• 📈 IT sector was the only one to close positive due to strong quarterly results expectations from companies like Infosys, Tech Mahindra, and L&T.
• 📊 HDFC Bank was highly volatile with significant share exchanges, driven by divided analyst opinions on its performance.
• 💼 FIIs sold heavily in the cash market for the sixth consecutive day, while DIIs made substantial purchases, yet the market still declined.
• 📉 FIIs have turned bearish across all market segments, with higher short positions in index futures.
• 🛢️ Rising oil prices due to escalating conflict in Israel contributed to global market weakness.
• 📉 US markets were also affected by strong jobs data and rising bond yields, ruling out any immediate rate cuts by the Federal Reserve.
• 📉 Dow Jones, S&P, and NASDAQ all saw significant declines, while the US VIX index surged.
• 💼 Indian ADRs, particularly banks like HDFC and ICICI, are indicating further market negativity.
• 📊 Nifty and Bank Nifty are facing strong resistance at higher levels, with potential for further declines if key support levels are broken.

Q & A

What is the current trend for Nifty as mentioned in the report?

Nifty has been in a downtrend for six consecutive sessions, falling over 1,400 points. Most sectors were negative, with only the IT sector showing gains.

Why was the IT sector positive despite the broader market decline?

The IT sector remained positive because of Bloomberg's quarterly results expectations. Companies like Infosys, Tech Mahindra, and L&T were expected to show an improvement in EBIT margins and sequential quarter growth.

What factors caused the volatility in HDFC Bank's stock performance?

HDFC Bank's volatility was driven by a divide between analysts. Some, like Morgan Stanley and Goldman Sachs, are positive, while others, like Numa and BNP Paribas, are negative. The stock saw heavy trading volume, with 70 lakh shares exchanged, contributing to the volatility.

How did FIIs and DIIs trade in the Indian market recently?

FIIs (Foreign Institutional Investors) have been net sellers for six consecutive days, including a heavy sell-off of 8,300 crore rupees in cash markets. On the other hand, DIIs (Domestic Institutional Investors) bought over 13,200 crore rupees, but the market still fell.

What impact did the US job data have on global markets?

The strong US jobs data led to increased expectations of a Fed interest rate hike, with the probability of a 50 basis point cut ruled out and a 30% chance of a rate hike instead. This caused US 10-year bond yields to rise above 4% and negatively impacted US markets.

How has the Israel conflict affected the oil market?

The Israel conflict intensified, causing oil prices to rise by over 3%. At the time of the report, WTI crude was trading near $77.5 per barrel, and Brent crude closed at $81 per barrel.

What are the technical levels to watch for Nifty in the near term?

Nifty formed a bearish candlestick pattern on the daily chart and broke below the 50-day simple moving average. If Nifty holds between 24,650 and 24,750, there could be a rebound towards 25,000–25,100. A break below these levels could see Nifty drop to 24,350–24,500, coinciding with the 38.2% Fibonacci retracement level.

What is the outlook for Bank Nifty based on the report?

Bank Nifty also formed a large bearish candlestick pattern and decisively broke the 100-day exponential moving average, closing near 50,500. A fall below the September low could drag Bank Nifty towards the August low of 49,650.

What does options data indicate for Nifty's resistance and support levels?

Options data suggests that Nifty may face resistance at 25,000–25,100 levels, with support around 24,700–24,500. Maximum open interest for calls is at 26,000, while for puts, it's at 24,000, indicating a potential resistance zone and support zone.

What are the upcoming economic events that could influence the market?

Important events include the release of US consumer inflation data for September and the FOMC meeting minutes, which could create market nervousness. Additionally, China's market reopening after a holiday week and Japan's household spending and trade data are expected to influence market trends.