Nifty 8034/Sensex 26210/ Bank Nifty 17876
29 Advances /22 Declines/ 0 Unchanged
Nifty give away its initial gains after testing 8100 mark
Indian stocks markets showed a volte-face on the penultimate day of December series futures and options contract expiry, as what started on a promising note ended as a dismal show. The optimism in domestic markets petered out completely by the end of trade. Marketmen were optimistic for most part of the session as local sentiments remained upbeat with the report that India Inc raised Rs. 38,645 crore in November through private placement of corporate debt bonds, a surge of 57% from the year-ago level, for business expansion and propping up working capital requirements.
Investors also got some confidence with NITI Aayog Vice Chairman Arvind Panagariya’s statement, who expressing his support for the demonetisation of high-value currency, said that demonetisation was a move towards formal economy. He said it is the government's drive to promote digital transactions and a less cash economy so as to move from the informal to greater formalisation of the economic system.
However, the sanguinity in local markets came under check as profit booking in some blue-chip counters like Reliance Industries, Tata Steel and Hero Motocorp put downside pressure on the frontline indices and dragged them even below the psychological 8,050 (Nifty) and 26,250 (Sensex) levels.
Besides, continues selling by foreign portfolio investors (FPIs) and rupee's depreciation against dollar also played their role in pounding investors’ morale. FPIs have pulled out close to $10 billion or a whooping Rs 65,000 to Rs 68,000 crore from country’s debt and equity markets since November 8, triggering one of the largest sell-off in two months in India since 2013.
Traders also remained cautious with the reports that of the Rs 15.4 lakh crore worth of Rs 500 and Rs 1,000 notes that were scrapped as a resulted of PM Narendra Modi’s November 8 declaration, as much as Rs 14 lakh crore has been deposited in banks. The value of scrapped currency exceeded the government’s expectation. This also means that expectation that RBI will be able to give a substantial dividend to the government will be belied.
On the global front, Asian stock markets ended mostly higher on Wednesday, tracking the positive cues overnight from Wall Street and higher commodity prices. Upbeat US consumer confidence and housing data too lent some support. Chinese shares ended lower, with sentiment dampened by a regulator's latest measures to put insurers' aggressive stock investments under stricter supervision. The vice chairman of the China Insurance Regulatory Commission (CIRC) reportedly said that insurers were not platforms to enrich speculators. Meanwhile, European shares were trading in a cautious note in early trade, with gains in mining stocks underpinning the market, while British builder Bovis Homes slumped after a profit warning.
Back home, the benchmark got off to a positive start in the morning trade as investors were largely influenced by the supportive leads from Asian markets. Thereafter, the key indices capitalized on the momentum and touched intraday highs in late afternoon session. However, the indices failed to hold onto the highs and suffered a setback in final hour of trade as sudden bouts of profit booking emerged in the local markets.
FII Activity (Dec 28, 2016)
The FIIs as per Wednesday’s 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 1645.31 crore against gross selling of Rs 2329.16 crore. Thus, FIIs stood as net sellers of Rs 683.85 crore in equities.
In the debt segment, the gross purchase was of Rs 697.73 crore with gross sales of Rs 686.04 crore. Thus, FIIs stood as net buyers of Rs 11.69 crore in debt.
Now what to expect ??
Nifty Future Levels
Yesterday nifty future made high of 8100 and slipped.
Now what to expect?
Support at 8020---7970 and resistance 8100.
Break and sustain below 7970 will take it to 7930---7880 and then to 7820 else could test its resistance level of 8100 again.
Fresh buying can initiate only close above 8100 mark.
Bank Nifty Future Levels
Unable to breach its resistance level of 18050 and crashed vertically.
Now what to expect?
Support at 17850 and resistance at 18050
Break and sustain below 17850 will take it to 17700—17600 else could test its resistance level of 18050 again.
Today is an expiry day for equity derivative segment. We will expect high volatility. So traders can trade safely with levels only. More will update during market hours.
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