Pre Market Report, May 11, 2016 | Stocks and Commodities

May 11, 2016
Time: 8.35 am

Pre Market Report:

1. India signed an agreement with Mauritius to Tax FIIs coming through that country.
2. Until March 2017, there will be no Tax, between April 1, 2017 to March 31, 2019, the Tax will be 50% of the applicable Tax and after that normal Tax rate will apply.
3. Sine 2008, whenever government tax about this, severe correction came and government changed the mind.
4. This time it is Modi government, they have gone and signed the agreement silently.
5. Indian markets were doing extremely well in the last two days when global cues were not good.
6. Today we will fall drastically when global cues are good.
7. SGX Nifty is trading slightly below 7800.
8. If Nifty future takes support at 7780, it will really very good.
9. The effective tax rate is less than 10% in Singapore, so more FII volume will be shifted to Singapore.
10. But that is only for those FIIs who deal with Nifty futures.
11. Even Nifty options are not active in Singapore.
12. So usually FIIs take future positions in Singapore and hedge the positions in India using Call option and Put option.
13. So futures volume may go down but option volume may go up.
14. As lons as Nifty future takes support at 7780, it will be good.
15. Since global cues are not bad, markets may make an attempt to recover later.
16. Yesterday there was a very good news that Monsoon will hit Andaman islands in 10 days time.
17. In fact after that news and after firm opening of Europen markets only, our markets recovered from the lows and closed above 7900.
18. Kotak bank results will be in focus after markets settle down.
19. FII counters will face more selling pressure.
20. No point in talking about resistance today.
21. Support should be around 7780, if that fails, Nifty future may test the series low of 7701.