Pre Market Report, February 3, 2016 | Stocks and Commodities

February 3, 2016
Time: 8 am

Pre Market Report:

1. Yesterday our markets were highly volatile.
2. In the last 40 minutes, Nifty fell by about 75 points.
3. Bank Nifty fell more than 400 points in the last 40 minutes.
4. There is no hope in PSU Banks. They keep falling every day.
5. Even ICICI Bank and Axis Bank are falling.
6. Metals and other commodities are falling like there is no future.
7. RBI policy was in line with expectation.
8. The fall was mainly due to three reasons.
9. First DIIs have started selling. Second, global cues. Third, crude prices started falling again.
10. But the first one was the main reason. So far DIIs have been supporting the market.
11. Once I mentioned that the real fall will be when retail people lose faith and start withdrawing from mutual funds. In that scenario, DIIs will not be able to support the market. On the other hand, they will be forced to sell.
12. FIIs are already selling and if DIIs are also forced to sell, there is no way markets can move higher.
13. Exactly that has happened yesterday, both FIIs and DIIs have sold in the Cash market.
14. Global cues and commodity prices are aiding the bear run.
15. In January series, it was up on the first day and all remaining days, you know what happened.
16. February series is also behaving the same way.
17. US markets were down, Asian markets are down.
18. SGX Nifty is trading around 7400. Imagine just yesterday afternoon, it was around 7600.
19. As per some reports, there is no short build up in Nifty.
20. The fall was just due to the fact that there is no interest in buying.
21. If that is the case, then the possibility of huge rally led by short covering is also ruled out.
22. Last year, though Nifty did not do well, lot of midcaps and small caps did well.
23. This year, the pain is more in small caps and midcaps.
24. If everything is falling, then at one point of time, retail people will start withdrawing from mutual funds and that will aggravate the selling.
25. If things continue like this for few more days, we will not be surprised if Nifty breaks 7200.