Dalal St Daily 16th October

 GLOBAL MARKETS

  • Global financial markets are weak.
  • U.S. stocks dropped on Thursday as an unexpected rise in weekly jobless claims.
  • Fears of stalling economy due to the backdrop of fiscal aid till the elections.
  • The correction was triggered by fading hopes of further stimulus in the US and reports of fresh lockdowns in Europe which added to weak sentiment across equities globally.
  • European markets tumbled due to the fresh lockdown in france.
  • Dow futures were down by 190 points but it took a sharp recovery. and closed flat.
  • S&P 500 is down by 0.5% and closed 5 points lower.
  • where as sell off is seen in tech stocks.
  • S&P 500 VIX was near to 29 which was a serious issue in the US markets if it crosses 30 mark.
  • Dollar Index is now @ 93.817 which is close to 94 again and even this has to be taken serious.
  • Crude Oil is trading relatively lower @ $40.5 per barrel compared to yesterday's close.
  • The sell off was witnessed in the global markets due to this reason :-
    • Probability of US stimulus getting pushed after Presidential elections.
    • Concerns about Trump's prospects in the elections
    • Second round of lockdown starting in key European countries.
  • Global Cues are weak.
DOMESTIC MARKETS.
  • Asian markets are mixed.
  • SGX Nifty is trading 51 points higer @11750.
  • Nifty was trading 100 points lower @11900 today until the european markets opened.
  • Tracking weak global cues, domestic bourses tumbled in today's session and joined the global sell-off amid faded US stimulus hopes and worries over re-surging COVID-19 infections in Europe.
  • Nifty was down by 340 points from its high and Bank Nifty fell 1150 points from its intraday high.
  • Today only the IT sector was weak in the morning session. But when the european markets were open their was a huge sell off which came in the markets which were dragged by the Banking stocks
  • Yesterday, was the day for interest rate decision 
  • Nifty and Bank Nifty witnessed massive selloff, halting its 10-session winning run.
  • Bank Nifty took a hit due to the the uncertainity in the decision of the supreme court where the Government has taken time till November 14.
  • Even though Infosys revenue was good and its ADR was up by 4% the in our indian market infosys fell by 3%.
  • IT sector was the major contributor for yesterday's fall yesterday till european markets openend, and after they opened banking, and financial stocks dragged the market lower.
  • for every drop of 10rs in  HDFC Bank the Bank Nifty make a fall for 200 points. and this is the weightage of HDFC Bank in BankNifty Index. Just imagine once, yesterday HDFC Bank fell 50 points due to the negative news inflow on the market for interest on interest case and the quarterly results which are coming ahead.
  • Mind tree came out with good results, Q2 net profit jumps 19% QoQ to Rs 253.7 crore. Rupee revenue stood at Rs 1,926 crore against Rs 1,909 crore.
  • If the bench mark indices break today's low a it should be taken seriously because we have witnessed the same kind of sell of on september month expiry and that was limited to interest on interest case and expiry related issue but in yesterday's scenario the same expiry related and interest on interest case is already factored in but the other news inflow that is fresh lock down which has been imposed in the france ( Europe ), and the other main global news inflow that is US Presedential election which is due next month this has brought in major volatility in the global markets because the stimulus hopes which are in peoples mind and fading out because the stimulus will be mostly coming out after the election only and the results will also be delayed as the pandemic and other issues which are running US. The election results will be delayed by a week or two and the same for stimulus also. The stimulus will also be delayed and that is an another main reason which is creating a selloff in the markets. 
  • And if our markets breaks yesterday's low today for sure there will be a one more correction which is coming ahead. and its time to close all the long positions.
TRADING RANGE FOR FRIDAY
  • Nifty may trade between 11450-11900
  • Bank nifty may trade between 22450-23600
OI ANALYSIS 

CALLS
  • The highest CALL OI was seen at 12,000 strike with 24.02 lakh contracts.
  • Call writing was seen at 12,000 strike.
  • Call unwinding was seen at 11,300 strike.
PUTS
  • The highest PUT OI was seen at 11,500 strike with 22.39 lakh contracts.
  • Put writing was seen at 11,400 strike.
  • Put unwinding was witnessed at 11,700 strike.
OI BUILT UP
  • MINDTREE, HUL were the major stocks who saw some Long Unwinding yesterday
  • Manapuram, LIC housing Fin, appolo hospitals saw some short built up.
  • Cumminsind, Asian paints saw some short covering.
EVENTS
    
    There are no major events coming today but there are some earnings results which is coming on 16th October

  • HCL Tech is coming out with its results
  • MindTree Q2 net profit jumps 19% QoQ to Rs 253.7 crore. Rupee revenue stood at Rs 1,926 crore against Rs 1,909 crore.
FII & DII ACTIVITY
  • FII's have pulled out 600 crores from markets. and 
  • DII's have also pulled out 800 crores worth of share in equity markets.
FII and DII have both turned huge net sellers and this for sure serious thing to note.
Trade cautiously as the markets are turning volatile.




THANK YOU

Sharath R

Location: Bengaluru, Karnataka, India

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