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

October 14, 2016
Time: 8.15 am

Pre Market Report:

1. US markets closed marginally lower after opening significantly lower.
2. So Asian markets are stabilising.
3. SGX Nifty is also trading slightly positive, at 8600 right now.
4. We have under performed hugely yesterday compared to other Asian markets.
5. Reasons: (i) Fear of US rate hike in December after Fed minutes on Wednesday night, (ii) China's export down by 10% revealing weak global economy, (iii) Fear of bad reslts from TCS and Infosys, (iv) most importantly, Govt. planning to go after P Note holders to uncover black money, (v) a news paper report that said income tax dept. found out about half the NHIs, some with turnovers of over 2000 crores per annum, have not filed any tax returns, Dept. has obtained all the data from Exchanges, they will go after these HNIs, creating panic among HNIs.
6. Our markets fell more than September 29 fall due to surgical strike.
7. Yet India VIX was up only 8% compared to 30% on September 29.
8. So the sanity may return in the next few days.
9. FIIs have sold Rs 911.53 crores yesterday and about Rs 1500 crores in the last two trading sessions.
10. So markets may not move significantly higher from the current levels but it may not fall significantly lower from here also.
11. Markets may consolidate between 8500 and 8700 for the next few days and option prices may fall as India VIX falls.
12. Yesterday the damage was contained by short covering rally in Infosys and IndusInd Bank did not fall due to good results.
13. If not for these two stocks, markets would have fallen even more.
14. Despite such a big commotion, Maruti shot up by more than Rs 60 in the last 15 minutes.
15. Today Infosys results will decide the course of the market.
16. It has potential to rise or fall by 10% and has the potential to move Nifty by 50 points on either side.
17. Due to severe fall, huge short positions would have come to the system, if markets stabilise, then there will be individual short covering rally in many stocks ahead of their results, just like Infosys short covering rally yesterday.
18. Key companies like, HDFC bank, HDFC, Axis Bank, Reliance are likely to declare results next week.
19. Yesterday CPI inflation came much lower than expected is a good news for medium term investors.
20. Today WPI inflation data is due around 12 noon.
21. Moreover, markets may see some kind of short covering towards the end of the day, Nifty may move 30 to 40 points towards the end of the day, if it is weak thoughout the day.
22. Nifty future should take support at 8520 for the next few days.
23. Resistance will be at 8680 for the next few days. 
24. Difficult to predict the range for today due to Infosys results which is likely to be released at 8.45 am today.