Update on Nifty levels, Bank Nifty levels of the day 1st Feb 2018
Nifty 11049 /Sensex 36033/ Bank Nifty 27269
13 Advances / 36 Declines/ 0 Unchanged
Benchmarks end in red ahead of Union Budget; Sensex slips below 36K mark
Indian equity benchmarks ended the Wednesday’s trade with marginal losses, as traders opted to stay away from buying risky assets ahead of upcoming budget to be released on February 01, 2018. Markets started the session on pessimistic note and extended losses to breach their crucial 11,000 (Nifty) and 35,900 (Sensex) levels, as traders remained cautious with Chief Economic Adviser Arvind Subramanian’s statement that elevated stock prices are a matter of concern and could correct sharply if they are not backed by growth, requiring ‘heightened vigilance’.
Subramanian added that the situation was similar to the US in 2006 and he cannot prevent the run-up but can control the cleanup. So, if something happens, he can lower interest rates and inject money into the economy. Subramanian said the macro environment had turned adverse with oil prices having risen above $60 a barrel and staying there, the interest rate cycle changing globally and elevated asset prices in India and across the world.
However, markets took some support near day’s lows and pared most of their early loses with traders taking solace with report that India has been ranked sixth in the list of wealthiest countries with total wealth of $8,230 billion, while the United States topped the chart. Traders also get some comfort with ratings agency Moody’s statement that recently introduced goods and services tax (GST) mechanism is still a work in progress that will ultimately result in formalisation of economy. It added that it was a necessary step to help banks and such reforms should continue. Traders also took some comfort with rating agency ICRA enlightening that with banks credit outpacing deposits in the last few months, pushing up the credit-deposit ratio, lenders are likely raise deposit rates in the near-term. Besides, ahead of the February 1 Budget, a debate has been brewing about the exemption of long-term capital gains tax on stocks.
On the global front, European markets were trading in green in early deals, as investors surveyed a mixed back of results from some of the region's biggest industrial names. Consumer price inflation (CPI) in the euro zone eased slightly in January, diminishing pressure on the European Central Bank to move forward with further removal of monetary accommodation. Asian markets exhibited mixed trend on Wednesday with Chinese manufacturing sector slowing more than expected in January to an 8-month low in the face of a cooling property market and tighter pollution rules that have curtailed factory output.
Back home, investors took note that the country’s largest bank, State Bank of India has raised interest rates offered on bulk deposits by 50 to 140 basis points, signaling a turn in the interest rates cycle. The bank has sharply raised rates for 46 days to 210 days by 140 basis points from 4.85% from 6.25%. The hike in deposit rates comes a couple of days before the finance minister is set to announce the union budget for 2018-19 and a week before the Reserve Bank of India is set to announce its monetary policy. In scrip specific development, Dr Reddy’s Laboratories edged lower for the fourth straight day after the company reported 29% year on year (Y-o-Y) decline in its consolidated net profit at Rs 3,344 million in December 2017 quarter (Q3FY18).
FII’s Activity 31st -Jan-18
The FIIs as per Wednesday’s data were net buyers in equity and debt segments both, according to data released by the NSDL.
In equity segment, the gross buying was of Rs 6193.86 crore against gross selling of Rs 6161.70 crore. Thus, FIIs stood as net buyers of Rs 32.16 crore in equities.
In the debt segment, the gross purchase was of Rs 2320.57 crore with gross sales of Rs 1313.00 crore. Thus, FIIs stood as net buyers of Rs 1007.57 crore in debt.
In the hybrid segment, the gross buying was of Rs 10.30 crore against gross selling of Rs 7.25 crore. Thus, FIIs stood as net buyers of Rs 3.05 crore in hybrid segment.
Now what to expect ??
Nifty Levels
Above 11135 will see rally till 11240---11360 mark
Fresh selling will do only close below 10960
Trade with levels only
Bank Nifty
Above 27600 will see rally till 27800---28000 mark else could touch its support level of 27200 again.
Trade in a range with levels only
Daily Derivative Outlook 1st February 2018
• Nifty (February) futures closed at a Premium of 27.70 points versus a Premium of 22.45.
• HAVELLS (52%), M&MFIN (18%), ARVIND (16%), ESCORTS (16%) and KAJARIACER (13%) were the top gainers in terms of open interest.
• NIITTECH (-11%), WOCKPHARMA (-10%), CHOLAFIN (-8%), MINDTREE (-7%) and CASTROLIND (-7%) were the top losers in terms of open interest.
• Maximum call writing was seen at Nifty 11500 strike and maximum put writing was seen at Nifty 10700 strikes.
• Maximum positions are at 11500 CE and 10500 PE.
• The Nifty Put Call Ratio (PCR) finally stood at 1.30 for February month contract.
• Advance Decline ratio in F&O segment was at 0.33, Advance (53) + Decline (161) + Unchanged (3) = 217
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