Pre Market Report, August 03, 2020 | Stocks and Commodities

August 03, 2020

Time: 8 am

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2. US Futures were down on Friday afternoon, so we sold off.
3. But on Friday night, though US markets opened lower, short covering in the last one hour took the markets higher to close in Green.
4. But Asian markets are mixed.
5. SGX Nifty is down by about 50 points.
6. First let us look at positive things.
7. Over the weekend, monthly Auto sales data came, which seems to be very good.
8. Monthly sales is almost equal to pre covid era.
9. So Auto stocks may be in focus.
10. M&M has been trading in a range for past many years due to tractor sales, which has been poor.
11. Now Tractor sales seems to be picking up, so M&M is a major beneficiary if Auto sales as well as Tractor sales pick up.
12. Manufacturing PMI data from China came better than expected.
13. Japan GDP contracted lower than expected.
14. Despite we are very close to 11000, Nifty 11000PE has the highest Open Interest.
15. Pharma stocks are looking too bullish.
16. Coming to negatives.
17. FIIs have turned net sellers for Rs 950 crores in Cash market after so many days of being buyers.
18. That is a major negative.
19. We need to see whether this is just one off selling or beginning of series of selling.
20. Banking stocks look too bearish.
21. Reliance also correcting.
22. So uncertainty may continue until RBI policy on Thursday.
23. Banks may fall further if there is any more moratorium.
24. So August series has not begun with optimism.
25. Today we will get India Manufacturing PMI.
26. But it is expected to be better than last month.
27. Even Core sector growth was minus 15% Vs minus 22% previous month.
28. Nifty should find some support around 11000.
29. With 4 out of  Top 5 Index Heavy Weights looking weak, we need to see where market stabilises.
30. Nifty future may trade between 10980 and 11180.