Pre Market Report, June 14, 2016 | Stocks and Commodities

June 14, 2016
Time: 8.45 am

Pre Market Report:

1. US markets closed lower.
2. Brexit issue is being factored in.
3. Many opinion polls say Brexit will happen.
4. Asian markets are falling for fourth day.
5. The fall is also very severe.
6. It is difficult to imagine if Brexit actually happens.
7. My estimate is that most markets will be down by 5 to 10% down before the event and will fall 5 to 10% if Brexit happens, otherwise, there will be a rally of 5 to 10%.
8. So it is best to sell Call options on every rise.
9. But the fall in India will be very much limited.
10. This is due to very good local cues compensating very bad global cues.
11. Even yesterday RBI has come out with relaxed guidelines to deal with huge debt by companies.
12. When the world gets into trouble, Crude oil will fall and that is actually good for India.
13. Yesterday it was not all down.
14. Pharma sector was up, Reliance and Infosys were up, though marginally.
15. Infosys, TCS, Reliance, ITC and Banking stocks consist of more than 60% of the Nifty.
16. So when Infosys, TCS, Reliance are not falling, ITC may not fall much due to good monsoon and good corporate results, some god news coming to Banks, the markets may not fall much from here.
17. Again we do not know what short sellers are thinking.
18. Despite such a bearish environment, FIIs were net buyers in Cash market whereas it is the DIIs who have sold heavily.
19. Probably there are raising the Cash level in order to support the market at lower levels if Brexit happens.
20. For the first time FIIs have sold heavily in F&O market.
21. But that was expected as they have huge long positions in the last few days.
22. Nifty future should take support at yesterday's low of 8080. 
23. If that level is broken, then Nifty may slide towards 8000.
24. Resistance will be at 8180.
25. Inflation was higher and today during the market hours, we will be keenly watching WPI inflation data.
26. Some Asian markets are stabilising at the lower levels.
27. So the volatility may continue for the next two weeks until Brexit issue is over.