Hit on Markets

Bad news welcomes the Tuesday morning. North Korea fires a missile in the sea of Japan and that turned everything to red in Asia today. UN security council will meet today evening to discuss the North Korea situation. Korea, Japan, Hongkong, Singapore all the markets are in red. All the positivity that got generated yesterday will be wiped out to a lot of extent. We will see an opening below 9900 and we should see what happens after that. If 9900 is not taken out then there is a chance of it correcting to 9820 or below that. If buying happens then there could be a recovery during the day. Its important for NIFTY to decisively cross 9900 by the time Europe opens. Then, even in the event of Europe correcting we can take a support at 9900 and close around that. But if that doesn’t happens then there could be a break down and we might go below 9850 and towards 9800. That would be a major set back for the 10,000 expiry plans!
Yesterday’s F&O data was very positive and that could have given lot of positivity today. If North Korea was not there NIFTY would have opened around same level it closed and could have gone above 9950. This am saying because there is a buying that had started at 9800 and 9900 call which is a very good sign for NIFTY to go up. Even the shorting of put has shifted from 9800 and 9850 to 9900 and 9950 which indicates 9950 the floor for expiry. That would have taken NIFTY above 9950 today itself to build the base. All this might not happen today as the opening itself will happen below 9900.
In other news, NTPC divestment will happen shortly with 5% shares going for sale through OFS. It also has a green shoe option of another 5% subsequently. This is likely to yield 70,000 Cr to Govt. On the other hand, the filings for the July month of GST have come and the figures are not very encouraging. Govt has expected 90,000 Cr indirect tax payments, experts were hoping for a 75,000 Cr and what came out was a payment of only 60,000 Cr as indirect tax under GST. That shows many people not understanding or not consuming a product or a service due to the complex structure of taxation. Definitely this needs an attention from the govt before it really starts hurting tax collections.