Pre Market Report, May 20, 2016 | Stocks and Commodities

May 20, 2016
Time: 8 am

Pre Market Report:

1. Markets fell all over the world yesterday due to US interest rate hike fears.
2. Our markets fell despite very good assembly election results for BJP.
3. Congress losing and BJP and other parties which support GST gaining is very good for passage of GST bill.
4. SEBI issuing fresh guidelines governing P Notes further dented the sentiment yesterday.
5. The fall was severe in index heavy weights.
6. Reliance has fallen about 10% in the last one month after declaring good results.
7. All PSU Banks fell with SBI falling 4.5%.
8. If US raises interest rates then commodities will under perform and that will increase the NPA problems for PSU Banks as most of the NPAs are related to commodity sector funding.
9. But yesterday night, US markets recovered half of the losses made in the early part of the trading session.
10. Now Asian markets are all trading in Green.
11. Asian markets have been falling for the last three weeks anyway.
12. So Asian markets have to recover at some point. Hong Kong has fallen nearly 10% in the last one month.
13. China is still trading at a level seen in 2008 low.
14. SGX Nifty after hitting a low of 7717 yesterday night, now trading closer to 7780.
15. Markets are likely to stabilise with some volatility here and there.
16. Last one hour of today's trade is very important.
17. There will be a lot of stock specific movements today as over 50 companies declare results today.
18. Most important results are from ITC which is an index heavy weight.
19. There is only 28% chances of Fed raising rates in June.
20. So markets need not worry too much about US rate hike.
21. FIIs have sold for Rs 765 crores in Cash market while DIIs have bought for Rs 1484 crores in Cash market.
22. FIIs did not sell much in F&O market.
23. In fact they have bought options in huge quantities.
24. They have bought stock futures more than what they have sold in Index futures.
25. So panic may subside today and we may hope that Nifty will go back to trade in the range of 7700 - 8000.
26. Today Nifty is likely to trade in a wide range. Any short covering may take Nifty future to 7850. Any further selling by FIIs can bring the markets down to 7750 or 7720.