Pre Market Report, October 23, 2017 | Stocks and Commodities

October 23, 2017
Time: 8.40 am

Pre Market Report:

1. On Wednesday evening China Central Bank Chairman said "Banks must be careful about Minsky moment in property market"
2. Minsky moment refers to sudden collapse in asset prices.
3. That did not go well with Hong Kong markets, Hong Seng fell more than 550 points on Thursday.
4. That borought some profit booking in all the markets but brought panic in our markets.
5. Since we opened only for one hour, institutions were missing, volume was very low, so the panic spread very fast.
6. As a results Bank Nifty future fell more than 500 points from previous days actual close.
7. Axis Bank, ICICI Bank, SBI were mostly responsible but profit booking in HDFC Bank also contributed to free fall.
8. It was free fall in the last half an hour of trading on Thursday.
9. But tings changed by Friday morning itself when US senate passed the 2018 budget.
10. That has paved way for Trumps tax cut plan.
11. The sentiment changed significantly and SGX Nifty closed above 10200 on Friday night in Singapore.
12. Then on Sunday Japan election results were favourable and Japan markets are doing very well.
13. But most other Asian markets are down.
14. Now SGX Nifty is trading around 10185.
15. Due to the panic sell off on Thursday, weaker bulls were out.
16. Only stronger bulls will be holding positions now.
17. Things may change completely from today.
18. It was only Bank Nifty that showed weakness. All other sectors are doing well.
19. If HDFC Bank tomorrow, Kotak Bank on Wednesday and Yes Bank on Thursday coe out with good results, Bank Nifty may move above 24500 once again.
20. Particularly HDFC Bank and KOtak Bank are important as they are number 1 and 3 in Bank Nifty index.
21. The worry is only about Bank Nifty, Nifty is looking very strong.
22. Today gap up will be good for option sellers as Price Value, Time Value and Volatility Value all work work in their favour.
23. India VIX is likely to fall more than 5%.
24. Option premiums are likely to collapse.
25. On Thursday even 9700PE was trading above Rs 7.50, that is too much considering the number of days to expiry.
26. Today we can consider selling 9800PE as Nifty is not likely to fall 100 points everyday for the next four days.
27. Tomorrow HDFC Bank results and tomorrow evening Infosys results will be the key events for this week.
28. Both are expected to be good, so bulls need not worry.
29. Despite such a big fall in Bank Nifty, 24500PE did not unwind, that shows that a section of the people are confident of HDFC Bank and KOtak Bank reuslts.
30. Nifty future may trade between 10120 and 10220.