Pre Market Report, August 29, 2017 | Stocks and Commodities

August 29, 2017
Time: 8.45 am

Pre Market Report:

1. Yesterday there was a good news that Indo-China border problem has been settled amicably.
2. Today morning there is a big negative news that North Korea launched another medium range missile.
3. North Korea has been launching missiles every now and then, then what is special about today's launch?
4. In the last few months all their missiles flew over the sea and fell into the sea.
5. Today, for the first time, the missile flew over Japan's land, violoting Japanese Air Space.
6. Some kind of panic was seen in Asian markets but to a limited level.
7. China and Hong Markets are not doing very bad but remember China is a friendly country of North Korea.
8. SGX Nifty has been trading between 9850 and 9880.
9. So the panic will set in only if Nifty breaks 9850.
10. This is happening in the last three days of this expiry which is very bad.
11. If this kind of things happen in the first half of the series, then people will try to manage their Put positions by selling Call options.
12. If this kind of things happen in the last few days, Call premiums may not be significant, so Put sellers will manage positions by shorting in future.
13. This shorting in futures will add pressure to the market.
14. That is main reason why markets are very volatile in the last few days of expiry.
15. Going by the FII and DII data in both Cash and F&O, the fall may not be significant.
16. For long term investors this is a buying opportunity.
17. I expect Nifty to test 9820 in spot.
18. In addition to North Korea issue, some stocks being dropped from Nifty like Bank of Baroda, Tata Motors DVR, Tata Power and ACC will see stock specific sell off.
19. Tata Motors DVR will bring collateral damage to Tata Motors and Bank of Baroda will bring collateral damage to other PSU Banking stocks.
20. Most Asian markets have fallen only by half a percent.
21. So Nifty should not fall by more than 50 points. But it may fall more in the morning due to knee jerk reaction.
22. So be ready for a bearish day.
23. Developments throughout the day will affect the sentiment for the next few days also.
24. We should be happy if Nifty expires above 9800 by Thursday.
25. Today Nifty future may trade bewteen 9840 and 9920.