Pre Market Report 18-Jul-2025

Summary

In this pre-market report, PR Sundar discusses the recent performance of global markets, highlighting the S&P 500 and NASDAQ hitting all-time highs due to strong economic data. While Australian markets also reached new highs, Indian markets faced setbacks, particularly with disappointing results from TCS. Sundar emphasizes the importance of upcoming corporate results, including key banks like HDFC and ICICI, in shaping market direction. Despite current bearish trends in Nifty, he remains cautiously optimistic, noting that markets may rally on short covering if positive news emerges. The focus is on carefully navigating market movements, especially with critical results on the horizon.

Takeaways

• 😀 US markets, including the S&P 500 and NASDAQ, hit fresh all-time highs due to strong economic data such as consumer price inflation, producer price index, and retail sales.
• 😀 The Australian market also reached an all-time high, following the global trend of rising markets due to high inflation and rising asset prices.
• 😀 Despite Nifty's close approach to an all-time high, TCS's poor results and weak performance from other IT companies caused a market pullback.
• 😀 IT stocks continued to struggle after disappointing earnings reports from TCS and Tech Mahindra, with even good results from other companies failing to boost market sentiment.
• 😀 Axis Bank's results showed some positive movement, but its GDR trading was considered illiquid and may not reflect the true market sentiment.
• 😀 There are concerns regarding the upcoming results of major banks, especially HDFC Bank and ICICI Bank, which will significantly influence market direction.
• 😀 HDFC Bank has seen a 30% rise in its stock price recently, but ICICI Bank has faced some selling pressure, and its performance will be important for the broader banking sector.
• 😀 The Nifty index is currently facing slight bearish momentum, with technical levels indicating that it could turn fully bearish if the 24,950 support level is breached.
• 😀 For the market to remain bullish, Nifty needs to break the 25,300 resistance level. Until then, there is potential for a reversal.
• 😀 Caution is advised for the coming days due to corporate results and the possibility of short-covering rallies, especially if positive news emerges amidst widespread short positions.

Q & A

What recent trend has been observed in the global stock markets?

The global stock markets, including the US and Australian markets, have been hitting all-time highs, driven by positive economic data such as consumer price inflation, producer price index, and retail sales data.

Why has the Indian stock market, specifically Nifty, not reached an all-time high despite strong momentum?

Nifty came close to an all-time high but was held back due to disappointing results from TCS, a major IT company. These poor results caused a market downturn, which also impacted other IT stocks.

What impact did TCS's results have on the market?

TCS's results were considered one of the worst, which led to a drop in IT stocks. Even good results from other companies like Tech Mahindra did not have the desired positive effect on the market.

How did Access Bank's results influence the market?

Access Bank's GDR closed 1% higher, but its impact was limited due to the illiquid nature of the GDR and the inability of such instruments to accurately reflect the true market picture.

What are the expectations from other key bank results, such as HDFC Bank and ICICI Bank?

Investors are cautious ahead of HDFC Bank and ICICI Bank's results. While HDFC Bank has already seen a significant price increase, ICICI Bank is facing selling pressure. Positive results could lead to short covering in ICICI Bank, but any negative results could drive the market down.

Why are Fridays considered important for market trends?

Fridays are often seen as key trading days because if the previous day's market closes at a low point, it can create a trend for a strong rally. This scenario is likely given the global positive cues and the current market conditions.

What is the significance of the last hour of trading on Fridays?

The last hour of trading on Fridays is crucial because it sets the stage for how the market may behave at the start of the next week, especially with the upcoming key corporate results from HDFC Bank, ICICI Bank, and Reliance.

What technical levels should traders watch for in the Nifty index?

Traders should watch the 25,000 level as a critical support. If Nifty crosses 25,300, it may indicate a sustainable bullish rally. A breach of 24,950 on the downside would confirm a bearish trend.

What range is expected for the Nifty this week?

The expected range for Nifty this week is between 24,800 and 25,800, though premium levels are low, indicating a lack of volatility.

What caution should investors have in light of current market sentiment?

Investors should be cautious because many traders have short positions in the market. If positive news comes out, a short-covering rally could occur, causing sudden upward movement in prices. Markets often reward the minority rather than the majority.