Wednesday, February 7, 2018

Update on Nifty levels and Equity Pick of the day 7th Feb 2018

Update on Nifty levels and Equity Pick of the day 7th Feb 2018

Nifty 10498 /Sensex 34195 / Bank Nifty 25811

5 Advances /45 Declines/ 0 Unchanged

Bears take full control over Dalal Street; Nifty breaches 10,500 mark

Extending their losing streak for sixth straight session, Indian equity benchmarks ended the daunting day of trade with a cut of over one and a half percent on Tuesday, breaching their crucial 34,200 (Sensex) and 10,500 (Nifty) levels. Short covering in last leg of trade helped markets to pare most of their initial losses. Markets started the session with gap-down opening and shaved off around three and a half percent amid global sell off. Traders remained concerned ahead of the Reserve Bank of India’s (RBI’s) policy review meeting outcome on tomorrow amid expectations that the central bank will tighten its monetary policy stance in the wake of growing concerns over fiscal slippage. Investors also remained concerned on private report that lower indirect tax revenue collections may outweigh any upside risks from higher nominal GDP growth, non-tax revenue and direct tax collection. Traders also took note of foreign brokerage report which enlightened that the economy will grow 7.5 percent level in the first half on a lower base, but will slip down to 7 percent in the second half of the next fiscal. The report added that even with the jump, it will continue to trend 1 percentage point lower than the potential growth of the economy.

Sentiments also remained dampened with private report that the budgeted fiscal deficit is in line with expectations but there are some risks of slippage in financial year 2018-19, unless economic activities formalize at a rapid pace. It estimates a 20 bps upside risk to the fiscal deficit in 2018-19, unless economic activities formalize at a rapid pace over the coming year to generate the necessary buoyancy in revenues. Markets even breached their crucial 33,600 (Sensex) and 10,300 (Nifty) levels in initial trades, but key gauges got strong support near those levels and managed to prune some of their initial losses, as traders took some relief with Finance Minister Arun Jaitley’s statement that expediting public services and ensuring fairness in procurement will supplement rapid economic growth in the South Asian region including India. Investors also took some comfort with CBDT chairman Sushil Chandra’s statement that a large number of taxpayers have been brought into the net taking the total base to 8 crore and underlined that the government has consolidated direct tax reforms.

Weakness in European markets dampened sentiments, as a global sell-off in equities deepened and volatility spiked on growing worries over inflation and rising bond yields. Asian markets ended in red led by around 5% cut in Japanese market, as a surging yen following Monday's record plunge on the Dow Jones Industrial Average in New York hit exporters.

Back home, sugar stocks edged lower despite the food ministry proposing doubling of the import duty on sugar to 100 per cent to curb cheaper imports, check falling wholesale prices of sweetener and ensure timely payment to cane farmers. In scrip specific development, Bank of Maharashtra declined on reporting net loss of Rs 596.70 crore in Q3, however, Vijaya Bank surged on planning to raise Rs 1,277 crore on preferential basis and Kellton Tech soared on launching new product ‘IoT enabled Al Platform’.

FII’s Activity 6th-Feb-18

The FIIs as per Tuesday data were net sellers in equity segment, while they were net buyers in debt segment, according to data released by the NSDL.

In equity segment, the gross buying was of Rs 6031.51 crore against gross selling of Rs 7114.94 crore. Thus, FIIs stood as net sellers of Rs 1083.43 crore in equities. 

In the debt segment, the gross purchase was of Rs 2737.04 crore with gross sales of Rs 966.88 crore. Thus, FIIs stood as net buyers of Rs 1770.16 crore in debt.

In the hybrid segment, the gross buying was of Rs 0.56 crore against no selling. Thus, FIIs stood as net buyer of Rs 0.56 crore in hybrid segment.

Now what to expect ??

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Nifty Levels 

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Support at 10300. Now fresh selling will do only close below 10300 mark else we will see sharp upside rally in it.

Hurdle intact at 10650---10725.

Trade with levels only 

UBL- Top Pick

United Breweries Ltd. was observed to be priced at Rs. 1126.95 which was 26.95 points higher than the day's low and 22.5 points lower than the day's high while the day low was Rs. 1100 and day high was Rs. 1149.45 . 

In contrast to previous day’s values, the 5 day average volume rose 287909 stocks, 10 day average volume rose 135720 stocks and 30 day average volume rose 50455 stocks. 

Also UBl price just got below it's 20-day simple moving average which is a negative signal. 

Now what to expect???

On Daily chart, break and sustain below 1093 will see panic till 1050—-1030 in weeks to come. 
Hurdle intact at 1150.

Any sharp upside rally will be selling opportunity in it. 

Trading Recommendation (7th Feb 2018) 

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Sell UBL below 1093 with stop loss above 1150 (on a closing basis) Target 1050—-1030.

Corporate Action

NTPC Limited-Interim Dividend Rs 2.73 Per Share (Purpose Revised)

Results Today

BEML Limited

Voltas Limited

Torrent Power Limited

SRF Limited

Kaveri Seed Company Limited

IRB Infrastructure Developers Limited

Indraprastha Gas Limited

Hexaware Technologies Limited

Eicher Motors Limited

Aurobindo Pharma Limited

Dalmia Bharat Limited
Cipla Limited

More will update soon!!