Pre Market Report, August 26, 2019 | Stocks and Commodities

August 26, 2019
Time: 8.30 am

Pre Market Report:

1. On Friday Govt announced measures along the expected lines.
2. FPI surcharge was taken away.
3. Surprisingly it was taken away even for domestic equity investors.
4. Other than this, there was no meaningful announcement.
5. 30% depreciation will only help corporates, not individuals.
6. What they did, tried to reverse their bad decisions, no any good decisions.
7. Like Jail term for not spending CSR.
8. The only good thing is that the Govt indicated that they are listening and willing to look t the issues.
9. Just a month before, their attitude was very bad.
10. SX Nifty fell to 27770 just haead of FM' announcement regarding FPI surcharge.
11. But just after the removal, it shot up more than 150 points.
12. That indicates FPI surcharge is the single most positive announcement by FM.
13. But when everyone was hoping for a huge gap up today, the hiher tariff announcement came form Trump.
14. And DOW fell 800 points intrday and hence SGX Nifty also.
15. US-China trade war is not going to and any time soon.
16. Probably it will not end as long as Trump is in power.
17. Now even central bankers started talking about US-China trade war.
18. Trump said he is having a second thought about trade war.
19. Within half an hour White House said it was misinterpreted, actually he meant to say he should have increased the tariff even more.
20. Asian markets are al bleeding.
21. Hong Kong is having double whammy of trade war and local unrest.
22. Right now SGX Nifty is trading around 10900
23. SGX Nifty hit a high of 10947 on Friday night.
24. Just by looking at SGX Nifty level, US China Trade war is not having any big impact.
25. Buy any rise today will be mainly by short covering.
26. On Friday, despite FM meeting announcement, despite Nifty moved so much higher, FIIs have sold for more than Rs 1700 crores in Cash market.
27. So it is better not to take any long positions today.
28. We do not know how this Global cues will pan out.
29. Wait for today and see whether FIIs stop selling and start buying.
30. There is every possibility FIIs will continue to sell.
31. It is not that they are not happy with FM announcement, now Global risk off may hit them.
32. If there is no more escalation of US China trade war, we can expect Nifty to expire between 11000 and 11200.
33. This month I stated earlier that 11000 short straddle will give good profit.
34. But intraday volatility and MTM losses, not everyone can bear.
35. SGX Nifty has not been a good indicator for the last few weeks.
36. So we need to see how market opens. 
37. Usually first gap up, there will be some selling.
38. After that selling, if markets again moves higher and breaks morning high, then we can hope for some recovery.
39. Option premiums may start collapsing as the stability returns.
40. Nifty future may make bigger moves, so predicting a range will be difficult before the market open.
41. We need to see if India VIX falls or rises.
42. While writing this blog, some Asian markets are recovering and US futures are also recovering.
43. Crude is down by about 2%.
44. Rupee is likely to come under some pressure due to Yuan depreciation.
45. Generally speaking this FM announcement may become a non event as Global cues nullify its positive effect.
46. But again all these arguments are based on SGX Nifty behaviour, we do not know how much shorts are there in the system.
47. Even I took long positions at closing expecting some gap up today.
48. I will look to book profit if there is any mild gap up.
49. If gaps up above 10920, then I may keep SL and enjoy the ride.
50. I have sold 11000CE also which is a hedge for my long positions, I sold at Rs 26 only but closed at Rs 41.
51. Dow future recovered about 300 points from today's low is a consolation.