Weekly Market Analysis for Aug 12-16, 2024

Nifty's Resilience Tested Again Amidst Global Sell-offs; RBI keeps policy rates unchanged; FIIs selling; DIIs cautious and much more...

Aug 11, 2024

What happened last week?

As I started writing this week’s report, I saw this…

SEBI Chief has denied allegations already. But I hope SEBI provides a detailed statement to restore faith in the markets. Till then let us focus on what we do every week.

Nifty witnessed a gap-down opening last week amidst a global sell-off.

It touched lows of 23893 before rebounding to close at 24367.

On the sectoral front…
Pharma continued its good run from the previous weeks despite the market downturn.

All other sectors closed in red. Metal, Realty, Auto and PSU Banks tanked more than 4%.

On the global front…
most markets witnessed a sell-off. Geopolitical tensions in the Middle East is also driving negative sentiment.

Japan tanked 11% and then rebounded.

The Japanese Yen has been weakening against the U.S. dollar, influenced by Japan's monetary policy and economic conditions.

A weaker yen can lead to increased import costs leading to inflationary pressures.

However, towards the end of the week, the Bank of Japan committed to maintaining stable interest rates which helped the Japanese markets rebound.

US Tanked 2+%.

In July, the U.S. added only 114,000 jobs, falling short of the expected 175,000.

Following the jobs report, U.S. stock markets reacted negatively, with the Dow Index experiencing its largest two-day drop since March 2023.

Let us look at some India-specific developments.

The RBI's Monetary Policy Committee maintained the repo rate at 6.5% for the ninth consecutive time. It maintained a 'withdrawal of accommodation' stance.

Continued investments in Infrastructure happening steadily. The Indian government has recently approved eight national high-speed road corridor projects, totaling 936 kilometers in length, with an investment of Rs 50,655 crore.

Let us now dive deeper into FII DII Data.

FIIs sold ₹19139 Cr and DIIs bought ₹20871 Cr in the cash market.

FIIs increased their shorts in the Index Derivatives indicating further selling in the cash market. FIIs have also reduced their longs in the Stock Derivatives segment.

DIIs continue to maintain their hedges. They are still cautious.

Overall, FIIs turned more Bearish last week and DIIs are cautious.

Nifty Analysis

Both Momentum and Sentiment are Bearish despite the rebound towards the end of the week.

However, if you look at the Monthly Max Pain trend of Nifty below,
you can see that Max Pain (pink line) has not fallen significantly. So, positional traders are expecting Nifty to bounce back. They haven’t given up yet.

Key Stock Announcements Last week

Note: All the news items below include only the core business activities.

New Orders & Projects:

Business Operations:

Partnerships, Acquisitions & Investments:

Management Changes:

Key Upcoming Events

August 12 (Monday):

India CPI Inflation Rate
India Industrial Production

August 13 (Tuesday):

US Fed Bostic Speech

August 14 (Wednesday):

India WPI Inflation Rate

August 15 (Thursday):

Independence Day - Market Holiday
US Initial Jobless Claims Data

The rest of the information will be delivered through Dalal Street Breakfast on every market day at 8 AM. Check it out here!

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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