Pre Market Report, February 6, 2015 | Stocks and Commodities

February 6, 2015
Time: 8.25 am

Pre Market Report:

1. I could not write 'Post Market Report' yesterday as I was too busy with some other works.
2. US markets closed firmly in Green.
3. But Asian markets are mixed.
4. There was a news that Greece will provided emergency funding.
5. Coming back to our markets, yesterday's last hour of trade was similar ti the previous day's trade.
6. Bank Nifty fell more than 500 points in the last hour as IOB results disappointed.
7. IOB fell more than 10%. 
8. The pain was more in midcaps than large caps.
9. But there are few positives in yesterday's trade.
10. One, the selling was not across the board, it was selective, mostly banks and power companies.
11. Power companies fell as Delhi may go in favour of AAP and if AAP comes to power then it is not good for power companies.
12. Second, for the last few days both FIIs and DIIs were net sellers in cash market and yesterday DIIs turned net buyers of more than 300 crores and FII selling was very little.
13. Third, in the last few days, FIIs in the F&O market, sold stock futures and bought Nifty futures, which is capture the negative trend as stocks likely to fall more than Nifty.
14. But in yesterday's trade, FIIs have actually bought stock futures and sold Nifty futures, which means that they are squaring up their short position.
15. They are squaring up short position because they feel that the down side from here is limited and risk-reward favours the long position than short position.
16. So in my opinion, markets may bottom out around here, no big selling is expected.
17. Even yesterday with so much commotion, close to close basis, Nifty fell just 12 points.
18. HDFC Bank QIP subscribed by more than 4 times shows there is no dearth of liquidity.
19. Another results disappointment, now from Tata Motors, which is likely to fall by 3% today.
20. Nifty future should take support at 8700.
21. Europe is likely to open positive in the afternoon and there may be some short covering in our markets in the afternoon if the markets are under pressure in the first half.