Pre - Market Analysis for Jan 4th, 2020
What changed for the Nifty/BankNifty market while you were sleeping?
Global Data points:
The US equity market closed lower; Russell 2000 -1.9%, Nasdaq -0.4%, and S&P 500/DJIA -0.2%.
DXY US dollar index closed -0.4%/89.99.
European equity markets closed mixed; UK +1.6%, France +0.4%, Spain +0.2%, Italy -0.1%, and Germany -0.2%.
Most APAC equity markets closed higher except for Mainland China -0.5%; Japan +2.7%, Hong Kong +1.0%, India +0.6%, Australia +0.5%, and South Korea +0.4%.
Cina Caixin Manufacturing PMI came at 53, slightly lower than the forecast of 54.8.
Japan's unemployment rate declined by 0.2 percentage point to 2.9% in November, the first decline in six months.
Japan’s Nikkei slightly lower 1.1% on news that the government was considering a state of emergency for capital Tokyo and three surrounding prefectures on account of coronavirus.
Indian Data Points:
Monthly Auto sales data came positive.
PCR in Nifty and BankNifty has not changed since last week.
Net future Position in Nifty and BankNifty is in short - I’m Selling more PEs as and when Nifty and BankNifty hits lower(13700-13800 and 30900-30800 respectively).
FIIs have been buyers and DIIs have been sellers so far, except on Jan 1st when both were buyers.
SGX Nifty hit 14100 indicating a positive opening for Nifty with 103 points gain.
Since we are in uncharted land for the Nifty, it is quite tricky to play this.
SEBI fine on Reliance Industries(25 crores on Reliance Industries and 15 crores on Chairman), but this is not going to affect Reliance stock much. This is like shooting an elephant with a potato gun.
On Friday, there was a significant addition of Nifty 14000 PE and 14200 CE and 14300 CE for this week.
The Drop in DXY might cause the IT stocks to move up. There is also an expectation that the IT companies in India will perform well with their results, based on the fact that some IT companies in US have posted good results in December. [I hold INFY/TCS/Wipro/HCL long position]
BankNifty has been hovering around 31100 and 31400 for the last couple of days, if we see a move above 31360, then we can see BankNifty move up. Nifty is already at all time high and BankNifty has not reached it yet.
Thought Nifty/BankNifty has been doing well, Reliance/HDFC twins have not contributed much towards the move. Imagine if Reliance/HDFC starts to move. I’m expecting one of them to make some significant moves in this week.
ITC has a resistance point at 215, and has dropped multiple times around that range, so if it crosses that level today, it has a chance to move higher. [I hold ITC long position].
Foreign portfolio investors (FPIs) remained net buyers for the third month in a row by investing Rs 68,558 crore in Indian markets as global investors continued betting on emerging markets.
Other Interesting Things:
Tesla plans to enter the Indian market in 2021, according to media reports and a comment on Twitter from CEO Elon Musk. On Twitter, Musk replied to a question on whether Tesla will be available in India in January 2021, to which he replied "No, but definitely this year."
Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. From time-to-time I may post my trades in this newsletter. I’ll always disclose when this is the case. This newsletter is not tax advice. Talk to your accountant. Do your own research.