Pre Market Report, September 18, 2019 | Stocks and Commodities

September 18, 2019
Time: 8 am

Pre Market Report:

1. On September 3, due to bad GDP number, Auto sales data, lower GST collection, Nifty was down to 10900-10920 from 11000 plus and in the second half further selling came and fell another 100 point.
2. Yesterday the same thing happened.
3. But the bad news was on Monday when markets did not fall much.
4. Yesterday there was no bad news, except Crude shot up to $68, but on Monday it was $68, recovered to $65 and then went up $68. In effect, Crude price was same as Monday only.
5. Yesterday it was incremental selling but fell much more than Monday.
6. So clearly there was some insider information.
7. Later, after markets closed, we understand that GST Fitment Committee rejected proposal for GST rate cut for Automobiles, Biscuits and Telecom.
8. In my opinion, they are going to do very little and hence they want to prepare us for that little.
9. When they say 0, later even if they cut rates by 3 or 3%, instead of expected 10%, still people will be happy.
10. Autos and Banking came under severe selling pressure.
11. Auto index was down by 3.8%.
12. One thing is very clear.
13. This Govt has no clarity on Economic issues.
14. They are being guided by only one principle: "Their income should not go down by even Rs 1"
15. Without realising that anyway they will lose heavily when sales are low.
16. When 100 cars sold, you get 100 GST but when only 60 cars sold, you will get only 60 GST.
17. But if you cut GST by 40%, then instead of 60 cars, 100 cars will be sold. You will still get the same reduced GST but at least jobs will be saved, industries will survive, one day you can hope to reverse the GST rate.
18. Otherwise, more and more people will lose jobs (you get less income tax), more and more industries will be closed.
19. Govt is not listening to right people.
20. Let us come back to markets, politics is not our agenda, we talk about politics as it affects the markets.
21. Crude prices fell below $65.
22. FIIs have sold only for about $800, not proportional to yesterday's big fall.
23. As per Bloomberg, FIIs have sold for $4.5 billion, not seen since 1999.
24. FIIs this time have clearly lost faith in the Govt policies.
25. After brutal selling in July and August, it looks like we will close lower in September also.
26. If there is any favorable outcome in GST council meet this Friday, if markets recover next week, we can hope for flat or mild negative closing for September.
27. Yesterday I mentioned that I am expecting sideways move this week and expecting a sharp move next week depending on GST council outcome.
28. Due to GST Fitment Committee stand, that sharp move has come yesterday itself.
29. Since Crude is recovering, we can expect some support, as long as Yesterday's low is held, we can expect some sideways move.
30. If yesterday's low is broken, then there will be further panic in the market.
31. Otherwise we can expect Nifty future to trade between 10800 and 11000 until Friday.
32. depending upon GST Council outcome, next week markets will move.
33. Today Nifty future may trade between 10800 and 10920.
34. If there is any good short covering it may extend up to 10960.