"Infosys and Wipro ADR down" Pre-Market Report - Nifty & Bank Nifty 18 Sep 2024 Range, Analysis

Summary

This pre-market report video discusses key events influencing the Indian stock market on September 18, 2024, particularly Nifty and Bank Nifty. The focus is on the U.S. Federal Reserve's likely interest rate cut decision, either by 25 or 50 basis points, and its impact on market behavior. The video also highlights trading activity trends, volatility expectations, and global market influences like U.S. retail sales and oil price movements. It concludes by discussing Indian stock news, including the removal of windfall taxes and sector performance insights.

Takeaways

• 📉 The US Federal Reserve is expected to cut interest rates for the first time since the rate hike cycle began in February 2022, with a possible 25 or 50 basis point cut.
• 📊 The interest rate has remained at 5.5% since July 2023, with the Fed holding rates unchanged for 14 months, marking today as uncharted territory for Indian retail traders.
• 🤔 Market consolidation is unlikely today, with expectations of volatile movement in the second half, particularly influenced by option sellers closing positions.
• 📈 FIIs bought ₹500 crore in the cash market and ₹425 crore in the index futures market yesterday, but sold ₹35,800 crore in the index options market, similar to last week's trend.
• 🔄 FII's put-call ratio stands at 1.4, indicating a highly volatile market, with a potential for market rebound if put options are squared off today.
• 🛢️ US retail sales data came in weaker than expected, supporting a higher likelihood of a significant Fed interest rate cut, with 63% of analysts predicting a 50 basis point cut.
• 📉 Accenture delayed staff promotions, leading to a 5% drop in its stock price, affecting other IT stocks, including Indian ADRs Infosys and Wipro, which both dropped by 1%.
• 💡 The Indian government has announced the removal of the windfall tax on oil and oil-related products, which is expected to positively impact companies like Reliance.
• 💼 Infosys signed a positive agreement with Metro Bank for digital transformation, which may provide some support to IT stocks despite overall sector weakness.
• 📆 Key upcoming events to watch: UK's and Europe's consumer inflation data releases later today, along with the critical US Fed interest rate decision and press conference tonight.

Q & A

What is the main topic of the video script?

The video discusses the pre-market report for the Indian stock market on September 18th, 2024, focusing on Nifty, Bank Nifty, and the upcoming US Federal Reserve's interest rate cut.

What are the expectations regarding the Federal Reserve's interest rate cut?

The expectation is that the Federal Reserve will perform its first interest rate cut, with the possibility of either a 25 or 50 basis point reduction.

How has the US Federal Reserve handled interest rates since July 2023?

Since July 2023, the Federal Reserve has kept interest rates unchanged at 5.5% for 14 months, after raising rates since February 2022.

How might the Indian stock market react to the upcoming rate cut decision?

The market is expected to move violently, especially in the second half of the day, due to the anticipation of the Fed's rate cut decision. Option sellers might close their positions, increasing the market volatility.

What is the significance of the high put-call ratio (PCR) mentioned in the script?

The high put-call ratio of 1.4 suggests that a larger number of put options have been sold, which could indicate hedging or anticipation of a potential rebound in the market.

What was the trading activity of FIIs (Foreign Institutional Investors) on the previous day?

FIIs bought around 500 crore rupees in the cash market and 425 crore rupees in the index futures market, but sold over 35,000 crore rupees in the index options market.

How did the US stock market perform the previous day?

The US stock market closed flat to positive. The Dow Jones was down marginally by 0.4%, the S&P 500 increased by 0.3%, and the NASDAQ rose by 2%.

What impact did Accenture's staff promotion delay have on the market?

Accenture's decision to delay staff promotions led to a 5% drop in its stock, affecting other IT stocks, including Indian ADRs like Infosys and Wipro, which also declined.

What is the impact of the Indian government's removal of the windfall tax on oil?

The removal of the windfall tax on oil and oil-related products, effective from today, is expected to positively impact companies like Reliance and other oil producers.

What are some key market events to watch out for during the day?

Key events include the UK's consumer inflation data at 11:30 AM, Europe's consumer inflation data at 2:30 PM, and the US Federal Reserve's interest rate decision and press conference later in the night.