Pre-Market Report, December 03, 2020

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 With mixed Global cues, reduced FII buying, aggressive DII selling, opening around an all-time high, we can expect markets to be volatile.

For-Market Report :

  1. US markets ended mixed.
  2. Asian markets are also mixed.
  3. SGX Nifty is slightly higher.
  4. With huge volatility, Sensex hit an all-time high yesterday.
  5. Sudden selling by DIIs in the afternoon and then huge short covering added to Wednesday volatility.
  6. At some point, Bank Nifty future traded at more than 100 point premium and Nifty future more than 50 point premium to their corresponding spot prices.
  7. Today, if SGX Nifty is an indication, Nifty is likely to open at an all-time high.
  8. That is happening with Bank Nifty still about 10% lower from its all-time high.
  9. Yesterday all 3 top Bank Nifty components fell, HDFC Bank, Kotak Bank, ICICI Bank.
  10. Even restriction in intraday margin rules could not stop Wednesday volatility.
  11. Nifty broke 13K briefly, then the rally started.
  12. FIIs have bought Rs 357 crores.
  13. DIIs have sold for Rs 1636 crores.
  14. DIIs are in no mood to stop selling, no matter what happens.
  15. They have been selling from Nifty 11800 levels.
  16. Bank Nifty is consolidating between 29000 and 30200 with violent moves.
  17. Even yesterday Nifty future broke the morning high when short-covering came in the afternoon but Bank Nifty did not even cross the previous day's low.
  18. Metals are in a strong bull market.
  19. Yesterday Auto stocks did well.
  20. Since FIIs have reduced the buying, markets may see a profit booking at higher levels.
  21. But if Nifty sustains above 13145, then further rally is not ruled out.
  22. Any short-covering in Banking and Reliance can take markets much higher.
  23. Slowly US Stimulus news is also being factored in.
  24. PSU Baks are outperforming.
  25. Remember SBI was at Rs 375 and Bank of Baroda was at Rs 140 in May 2019 when BJP won for the second term.
  26. But PSU Banks have been declaring good results in the last few quarters.
  27. In the long run, PSU Banks may catch up.
  28. With mixed Global cues, reduced FII buying, aggressive DII selling, the market opening around an all-time high, expect markets to be volatile.
  29. Banking stocks ahead of RBI policy will be in focus.
  30. Nifty future may trade between 13020 (Yesterday low) and 13220 (SGX Nifty high on Friday night).

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