Good Start, Bad Closing | Post Market Report 06-Aug-24

Summary

In the post-market report, PR Sund discusses the extreme volatility and disappointing close of the exchange markets, with Nifty and Bank Nifty experiencing significant falls from their intraday highs. He highlights the contrast with Japan's market recovery and the lack of domestic institutional support reflected in the Indian market's performance. The script also touches on the impact of FII sales, the fluctuating NASDAQ futures, and the challenges faced by traders due to market unpredictability. Sund emphasizes the importance of caution, as the market is expected to be challenging in the coming months, and the need for US market stabilization for any hope of recovery.

Takeaways

• 📉 Market Volatility: The script highlights the extreme volatility in the exchange markets, with significant intraday fluctuations.
• 📈 Recovery in Japan: Despite the Japanese market closing 10% lower the previous day, it managed to recover all losses the next day.
• 📉 Continued Decline in India: Indian markets continued to fall, with Nifty and Bank Nifty experiencing substantial drops from their intraday highs to lows.
• 💹 FII Selling Pressure: Foreign institutional investors (FII) sold about 10,000 crores in a single trading session, a stark contrast to the last 7 months' sales of only one lakh crore.
• 💼 Domestic Institutional Support: Domestic institutions invested an equivalent amount to what FII sold, but this did not reflect positively in the market's performance.
• 🌐 Global Market Influence: The script mentions the impact of global markets, particularly the US and Europe, on the Indian market's direction.
• 📊 India VIX Decrease: There was a slight decrease in the India VIX, indicating a reduction in market volatility fear, but not significant enough to stabilize the market.
• 📈 Market Spikes and Falls: The speaker predicts that the market will not fall vertically but will experience intraday spikes followed by further declines.
• 🏦 Banking Sector Struggles: The Bank Nifty, which had previously been high at 53,000, fell below 50,000, indicating a significant downturn in the banking sector.
• 📊 Support Level Testing: The Nifty's support level of 24,000 is being tested repeatedly, suggesting that it may eventually break if the market conditions do not improve.
• 🚫 Urgent Caution Needed: The speaker advises extreme caution in the market, hinting at the possibility of further declines without stabilization in the US market.
• 🗣️ Potential Rate Cut Rumors: There are unconfirmed rumors of an emergency meeting to discuss interest rate cuts, which could potentially impact the market direction.

Q & A

What was the overall market trend described in the report?

The report describes a very volatile market with a disappointing close. The Nifty fell more than 400 points from its intraday high to low, and the Bank Nifty fell even more, indicating a significant downturn in the market.

How did the Japanese market perform in comparison to the Indian market?

The Japanese market had closed about 10% lower the previous day but managed to recover all of its losses. In contrast, the Indian market not only fell significantly the previous day but also continued to fall further on the day of the report.

What was the impact of foreign institutional sellers (FII) on the market?

FII sold for about 10,000 crores in a single trading session, which is a stark contrast to the last 7 months where they only sold one lakh CR. This massive selling by FII seems to have had a negative impact on the market.

How did domestic institutions respond to the selling by foreign institutional sellers?

Domestic institutions put in an equivalent amount of money to what the FII sold, but this did not reflect positively in the market's performance, neither on the way up nor down.

What was the state of the broader indices like next 50, midcap, and small cap?

The broader indices such as next 50, midcap, and small cap all fell more significantly than the Nifty, indicating a broader market downturn beyond just the major indices.

How did the India VIX move during this period?

The India VIX came down, but not by a significant amount, only about 8%, suggesting that market volatility was still high but not escalating drastically.

What was the situation with the banking stocks as described in the report?

Banking stocks, particularly the Bank Nifty, were described as very weak. The Bank Nifty fell about 7% from its all-time high, which is a substantial drop compared to the overall Nifty's 4% fall.

What was the significance of the 24,000 level for the Nifty?

The 24,000 level for the Nifty was a significant support level that was tested multiple times. The report suggests that if a support or resistance level is tested many times, it is likely to break eventually.

What was the report's stance on the market's future direction?

The report suggests that the market is going to be challenging for the next few months and it's going to be very difficult, indicating a bearish outlook.

What was the report's advice regarding market participation?

The report advises being very cautious in the market, implying that the current conditions are risky and require careful consideration before making any investment decisions.

Were there any rumors or reports about potential actions by financial authorities?

There were rumors about an emergency meeting of the Federal Reserve to possibly cut interest rates, but nothing had materialized at the time of the report.