Pre Market Report, December 13, 2017 | Stocks and Commodities

December 13, 2017
Time: 8.20 am

Pre Market Report:

1. Suddenly thing turned bad for our markets.
2. Crude spiked above US$65 and that was an excuse to book profits in Banking stocks.
3. Bank Nifty future fell about 300 points yesterday.
4. Banks were jittery ahead of IIP and Inflation data yesterday.
5. That fear was justified when the data came, Inflation came at 4.9%, one and half year high.
6. IIP data also came much lower at 2.2%.
7. SGX Nifty fell nearly 40 points after these news.
8. But US markets closed stronger and now Asian markets are mostly positive.
9. Now SGX Nifty is trading around 10250, about 15 points lower.
10. European and US futures are slightly lower.
11. So the weakness will persist ahead of US Fed policy, though it is going to be a non event.
12. Our markets have not gone anywhere in the last four and half month.
13. Nifty closed around 10150 in July and Bank Nifty closed around 25100 in July.
14. August, September, October, November and half December gone, we are going up and coming down and we are somewhere there at the end.
15. This is reason why Gujarat election results becomes very important.
16. If BJP does badly, markets will fall first then will recover.
17. If BJP does well, then markets will shoot up first then will fall, may be after a month or so.
18. That is because if BJP wins, they are likely to bring Long Term Capital Gains Tax.
19. Reason 1: We must remember, about a year before, Mr Modi mentioned that the Govt. is getting less money from the stock markets.
20. Reason 2: GST collection is not up to the mark, so they have to think of increasing their revenue by some other means.
21. Reason 3: If they increase the tax on share market, poor people will be happy as they think that it is only rich people who are playing in stock market. So it is a vote technique.
22. So whichever way we look at it, it is going to be a lose-lose situation for stock market.
23. I am planning ratio spread as I am not expecting too much movement on either side.
24. Even if there is any such movement, it will die down in the next one or two months.
25. That is why I am taking positions in February.
26. Nifty 10000PE and 10500CE have the highest open interest in PE and CE.
27. So Nifty is trading around 10250, exactly half way, ahead of the results.
28. So Option sellers will make money as long as the Nifty is not making more than 200 points move.
29. Nifty 10000PE has more than 90 Lakh shares in open interest, much more than 10500CE open interest.
30. That shows that people are more confident of BJP win.
31. Let us see what happens.
32. For today, Nifty future should take support at 10220.
33. If not, things will be very bad.
34. Bank Nifty will be in focus due to higher Inflation data.
35. Resistance will be at 10320.