Pre Market Report, November 10, 2016 | Stocks and Commodities

November 10, 2016
Time: 8.15 am

Pre Market Report:

1. Yesterday I could not write "Pre Market Report" as I was too busy.
2. But yesterday's market behaviour was more or less known to everyone.
3. First, black money issue.
4. Most market man thought it was a big negative.
5. But it is actually a very good one.
6. All those who are holding black money have to either lose their money or somehow they have to bring it to the banking system to make it white.
7. SInce withrawals are restricted, money brought in is likely to stay in the banking system longer.
8. Even after sometime, after all money come to the banking system, Govt. may announce some measures for bulk withdrawals.
9. Some countries ask for reason while withdrawing bulk money and Income Tax can track such movements.
10. So surely this is a very big positive news for banking and a very big negative for Real Estate.
11. Anyway there are no Real Estate stocks in Nifty 50 or Sensex.
12. Since Rs 2.5 lakh cash deposit will not attract Income Tax, people who hold large amount may use many accounts to deposit Rs 2.5 lakh by paying some commission to the account holders and that is a windfall gain for account holders who do not have their own cash to deposit.
13. Exactly for this reason, Bank Nifty shot up by 1400 points from intraday low yesterday.
14. Maruti fell dragging Auto index as Japan markets fell by 6%.
15. Today it may out perform as Japan markets are up by 6%.
16. IT stocks under performance may continue for some time.
17. Pharma stocks recovered as Hillary was seen against Pharma stocks.
18. Sine the panic set in yesterday morning, DIIs would have bought aggressively and that is why PSU Banks shot up.
19. Also results from PSU Banks are looking better.
20. Bank of Baroda and SBI, two Nifty components will declare results in the next two days and hence short covering also came in.
21. Second issue, Trump winning US elections.
22. People forget one thing, "Presidential Candidate Donlad Trump is different and President Donald Trump is different"
23. How many politicians keep the words that they speak before election?
24. They speak only to capture the power not as a real policy.
25. So what happened yesterday was a pure knee jerk reaction.
26. Another interesting this is that what happened yesterday was exactly same as what happened on June 24, just after Brexit.
27. After the brexit, Nifty has not tested June 24 low.
28. The same way, now Nifty may not retest 8076 in the coming months.
29. At the same time, upside also seems to be limited due to US rate hike fears.
30. So Nifty may continue to trade between 8000 and 9000 for next two months.
31. Clarity will emerge only in January after Q3 results.
32. Today India VIX maight fall and that may benefit option sellers.
33. Nifty future is likely to trade between 8460 and 8540.