Pre Market Report, May 12, 2020 | Stocks and Commodities

May 12, 2020
Time: 8 am

Pre Market Report:

1. US markets ended mixed. 
2. Asian markets are generally negative.
3. SGX Nifty is trading down by about 80 points.
4. Yesterday our markets opened gap up and due to short covering crossed 9400.
5. Then profit booking came in ICICI Bank and Kotak Bank.
6. ICICI Bank results were not good, so it fell and Kotak is coming out with results, so that also fell.
7. Towards the end of the day, news broke out that South Korea facing second wave of Corona Virus infection.
8. That dented the sentiment all over the world.
9. In fact I took bullish vie yesterday which fizzled out in few hours time.
10. Optimism coming from the news that more Economies are planning to open up and pessimism coming from the news that if Economies open up, second wave of Corona infection may come.
11. Surprisingly FIIs were net buyers in Cash market for more than Rs 500 crores.
12. DIIs continue to sell.
13. Our markets are under performing world markets.
14. Most world markets recovered 50% from March low.
15. We are struggling to recover even one third.
16. If you remove Reliance which shot up from Rs 875 March low to Rs 1600, then Nifty would have been trading around 8000-8200.
17. Now FIIs turning as buyers in Cash market, there is a possibility we may out perform in the next few weeks.
18. Bank Nifty is the main problem.
19. It has fallen more than 3000 points from recent high made on last month expiry day.
20. Last two days, Nifty opened gap up and then sold into.
21. Both days Nifty future fell more than 200 points from intraday high and Bank Nifty fell more than 700 points from intraday high.
22. Both ICICI Bank and HDFC Bank met with huge selling pressure in US ADR.
23. So Bank Nifty is a real drag.
24. In May series, Nifty has been trading between 9100 and 9450 with huge volatility.
25. Now we are opening around the lower end, it will be interesting to see whether markets break down or moves higher by short covering.
26. Despite Nifty falling more than 200 points from intraday high on two consecutive session, India VIX did not shoot up.
27. So the probability of break down is very less.
28. Markets may open gap down and consolidate at lower levels.
29. If any good news like Economic Package, etc, the we can expect short covering.
30. Nifty future may trade between 9120 and 9320.