Weekly Market Analysis for Aug 05 to 09, 2024
Global Headwinds, FII Selling, and Mixed Q1 Results Challenge Bull Run
What happened last week?
Nifty touched 25,000 briefly…
then fell to 24,717, down 0.5% for the week. FIIs continued selling and a global downturn contributed to the negative sentiment.
On the global front…
US manufacturing contracted for the fourth straight month, indicating ongoing economic challenges.
US Fed kept rates unchanged and hinted at a possible September cut. Despite that investor sentiment was bearish.
Bank of Japan's hawkish shift rattled Asian equities; Japan plunged 5.8%.
On the sectoral front…
Pharma continued its good run. Realty tanked further.
Let us look at some India-specific developments…
India's Manufacturing PMI dipped to 58.1 in July from 58.3 in June, due to slight slowdowns in orders and output.
The Govt extended Electric Mobility Promotion Scheme (EMPS) to September 30, boosting outlay from Rs 500 crore to Rs 778 crore. The EMPS primarily targets the promotion of electric two-wheelers (e-2Ws) and three-wheelers (e-3Ws), offering substantial subsidies to encourage consumer purchases.
Q1 FY2025 results season is turning out to be a mixed bag, unlike the strong previous quarters. Auto sales numbers slowed down. Metals sector gave weak results.
Let us now dive deeper into FII DII Data…
FIIs sold ₹12756 Cr and DIIs bought ₹17226 Cr in the cash market.
FIIs continue to sell post the budget. FIIs have also reduced their longs in Index Derivatives significantly.
However, FIIs continue to hold their longs in Stock Derivatives suggesting stock-specific activity.
DIIs have turned cautious and added shorts in Index Derivatives.
Overall, FIIs are turning Bearish and DIIs are cautious.
Nifty Analysis
Nifty Price and Max Pain took a nosedive on Friday. Nifty has witnessed aggressive selling twice this month at higher levels. A big fall on Jul 19 followed by fall on last Friday.
Last week I had mentioned that positional traders are not as bullish. Price has retracted to Monthly Max Pain on Friday. But a good thing is positional traders have not turned Bearish on Friday’s fall. They are holding on to their positions.
Overall, Nifty seems to be witnessing selling at higher levels. But no signs of a Bearish phase yet. We need to wait for more info to confirm Bearishness.
Key Upcoming Events
August 5 (Monday):
India Composite PMI (July Final Data)
August 8 (Thursday):
India RBI Interest Rate Decision
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Disclaimer: Anand Ganapathy K is a SEBI-registered Research Analyst with SEBI registration number INH000016630. This weekly update highlights market trends and upcoming events for your awareness. It does not recommend buying or selling stocks mentioned in this newsletter. Securities market investments carry market risks. Kindly review all related documents before investing.
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