Pre Market Report, July 9, 2015 | Stocks and Commodities

July 9, 2015
Time: 8.30 am

Pre Market Report:

1. European markets closed in Green and US markets closed in Red.
2. But now these markets are not relevant, only China markets are relevant.
3. China opened 4% lower then shot up by 8% from the low and now trading almost flat.
4. As a collateral damage, Hong Seng is also swinging by more than 1000 points for the second day.
5. There are few good things for India.
6. First, the commodity prices are crashing and that is good for India. As long as China equities are down, commodity prices will not go up.
7. Second, US Fed minutes suggests delaying interest hike in US and as long as China and Greece issues are not resolved, the chances of rate hike very low and that is also good for India.
8. Instead of allowing the market forces to determine the market levels, China Govt. is bringing in lot of rules to support the market. Yesterday they have announced that all those who are holding more than 5% of the shares are not allowed to sell the shares for the next 6 months
9. Many big FIIs may have more than 5% and their exit route is closed. They may not be happy about this kind of regulation. If they start disliking China, then next better alternate is India.
10. Few weeks before, our markets came under pressure when China A shares were considered for inclusion in MSCI World Index. Now they may not include China A shares due to all these regulatory issues.
11. But all these are only for medium to long term investors.
12. In the short term markets will follow the global sentiments.
13. So in the short term markets may be highly volatile with negative bias.
14. SGX Nifty has traded between 8310 to 8375.
15. Now it is trading almost flat.
16. Results season starts today with TCS announcing their results today evening.
17. Yesterday I felt Nifty would take support at 8400 but fell much more than that due to developements in China.
18. Nearly 65% of the shares are not tradable in China either due to suspension or lower circuit limit.
19. Despite such a big fall, open interest of 8300 Put option has increased.
20. So that should act as a good support.
21. Resistance will be at 8420.
22. Long traders should keep strict stop losses as we do not know how this China issue will blow.
23. Yes Bank fell due to CLSA report, Tata Motors fell due to their exposure to China, Vednta fell as copper prices crashed in LME. Most other metal stocks also fell due to China issue.
24. Retail investors should use options to trade instead of futures as markets are likely to be highly volatile.
25. Retail investors should also keep strict stop losses while trading as anything can happen in this kind of market set up.