Pre Market Report, September 22, 2020

 Pre-Market Report:

  • Yesterday morning, though Asian markets were negative, we were doing well.

  • In the afternoon, when Europe opened, the news came that US 2 Trillion suspicious money handled by Banks.

  • Banking stocks fell in Europe.

  • That triggered a sell-off in Banking stocks here also, which were already weak.

  • Then the sell-off spread to other stocks also.

  • Reliance fell more than Rs 80 from intraday high.

  • Many stocks fell by 5% to 10%.

  • In my Dalal Street Week Ahead, I mentioned that this week will see either 11200 or 11800.

  • But I was hopeful that 11800 will be seen.

  • But Corona Virus spread, the UK considering another lockdown to control Coronavirus, Banking scams broke out, Nifty reversed and tested 11200 almost.

  •  When we closed Dow's future was down about 500 points.

  • When markets opened there, it was down 950 points at the lowest level but recovered about half of the losses to close 500 points lower.

  • In fact, Nasdaq recovered about 90% of its losses, closed just 15 points lower.

  • Since Nasdaq was sold off already, there seems to be selling exhaustion.

  • But here, Bank Nifty is not seeing any selling exhaustion.

  • Yesterday's sell-off may be a knee jerk reaction.

  • Today I expect European and US markets to stabilize.

  • SGX Nifty is trading about 60 points higher.

  • But we need to remember that even after 3 pm, Nifty fell nearly 75 points.

  • We may be recovering just that last 30 minutes loss.

  • Though recovery may be very little, we are happy that markets do not continue to fall.

  • Yesterday, in many Social Media, people were talking about Nifty 11000 today itself.

  • Gold, Crude, European Futures, and US Futures are all recovering some lost ground now.

  • September series is one of the worst series.

  • Huge volatility, Nifty fell more than 150 points intraday many times.
  • Both FIIs and DIIs were net sellers in the cash market for about Rs 500 crore each.

  • FIIs were not short in F&O also.

  • So it was not really short-selling that took the markets down, it was lack of buying that triggered the sell-off.

  • Nifty future may trade between 11200 and 11380, wider range due to volatility.

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