Pre Market Report, March 3, 2020 | Stocks and Commodities

March 3, 2020
Time: 8.15 am

Pre Market Report:

1. Yesterday all was going well until afternoon.
2. Nifty future even crossed 1140.
3. Then came the news that 2 corona virus infections in India.
4. Then markets got panic.
5. Nifty fell 400 points and Bank Nifty fell 1000 points before recovering some lost ground.
6. Overnight US markets shot up more than 5%.
7. Few days before I tweeted saying there will be some coordinated Central Banks action.
8. Today evening, that is happening.
9. G7 Finance Ministers will meet together in a conference call.
10. The problem now, India may not follow Global cues.
11. FIIs have sold for Rs 1354 crores.
12. DIIs have bought for Rs 1138 crores.
13. So the problem is not coming from Institutional side.
14. SBI fell more than 8% from intraday high.
15. Lukewarm response to SBI Card issue could be a reason.
16. Grey Market Premium is also coming down for SBI Card.
17. GAIL has become a two digit stock.
18. Moral of the story: No matter how cheap, do not invest in PSU stocks.
19. ONGC at 15 year low, became two digit stock few days before.
20. SGX Nifty broke 11000 yesterday evening.
21. Now it is up by about 200 points from that low.
22. At 9 am, Australia rate decision is due.
23. But as of now, Asian markets are off their highs.
24. Dow trades between 25000 and 26000 with so much volatility.
25. Same thing may happen here.
26. Nifty may trade between 11000 and 11500 with so much volatility.
27. FIIs seems to be covering their shorts in F&O.
28. FIIs long has gone up from 11% to 19% in Index Futures.
29. That is actually a reason to worry.
30. In case market falls, short sellers will be tempted to book profits and that will help to cushion the fall.
31. If there are no shorts, then the fall will be free fall.
32. Anyway, still FIIs have more than 80% short positions.
33. Best strategy is to sell far OTM Call options as and when markets bounce.
34. As long as Nifty is not breaking 11000, we can expect some recovery.
35. Due to high volatility, not predicting any range for Nifty today also.