Nifty 9820 /Sensex 31213/ Bank Nifty 23985
15 Advances / 35 Declines/ 1 Unchanged
Bears in full control of Dalal Street on Friday; Nifty plunges below 9,750 level
Friday turned out to be a nightmarish session of trade for Indian equity benchmarks with frontline gauges shaving off over a percentage point. Domestic equities witnessed a huge bloodbath, as bears took charge resulting key indices fell below their psychologically important 31,300 (Sensex) and 9,750 (Nifty) levels, respectively, as stock markets across the world went into a tailspin amid an ongoing escalation in tensions between the US and North Korea. Markets made a pessimistic start, as traders remained concerned over SEBI’s crackdown on shell companies and a stand-off in the Doklam area of the Sikkim sector between Indian and Chinese troops. Sentiments also remained dampened with report that the Reserve Bank of India (RBI) has halved its dividend payout to the government to Rs 30,659 crore for the fiscal ended June 2017. Last fiscal, the RBI had transferred Rs 65,876 crore surplus as dividend to the government. This would potentially impact the government’s fiscal math this financial year, which is under pressure due to state-run banks’ sluggish earnings growth.
Markets tried to pare some of their losses but another wave of selling in second half of trade dragged markets to intraday lows. Sentiments weighed on report that there were downside risks to India’s projected growth of 6.75-7.5 percent growth in 2017-18, the finance ministry’s Mid-Term Economic Survey said in a guarded forecast, indicating that multiple pain points continue to hinder growth in the broader economy amid an uncertain fiscal outlook. The second part of the Economic Survey for 2016-17, which besides giving an overview of India’s economy, was also critical about ad hoc state-sponsored farm loan write-offs to deal with rural distress. Separately, flows from foreign portfolio investors into India have slowed of late as rich valuations and delay in corporate earnings recovery have reduced their appetite for domestic stocks.
Global cues too dampened sentiments with European stocks trading in red in early deals putting them on track for their worst week this year as ratcheting political tensions dented equities worldwide. Asian markets ended in red terrain, hit by tough language between North Korea and Washington that has sparked safe haven demand.
Back home, selling was both brutal and wide-based, as none of sectoral indices on BSE, barring Consumer Durables and Healthcare, were spared. Counters, which featured in the list of worst performers, include metal, auto and public sector undertakings. PSU Banking sector slumped after State Bank of India (SBI) reported its earnings for the quarter ended June which was a mixed bag. The net profit came above estimates but asset quality remains a drag. Besides, the FICCI-IBA survey also highlighted that banks with operations in India witnessed a significant rise in non-performing assets during the first half of 2017. Tyre stocks remained buzzing with ICRA’s latest report that tyre volume demand is expected to grow by seven to eight per cent during FY18 and FY19 on the back of higher OEM demand and stable replacement demand.
FII’s Activity 11-Aug-17
The FIIs as per Friday’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 4528.64 crore against gross selling of Rs 5512.37 crore. Thus, FIIs stood as net sellers of Rs 983.73 crore in equities.
In the debt segment, the gross purchase was of Rs 839.43 crore with gross sales of Rs 625.92 crore. Thus, FIIs stood as net buyers of Rs 213.51 crore in debt.
Now what to expect next??
Nifty Levels
As expected we have seen vertical crash in Nifty from 10000---9720 mark
Now what to expect???
Support at 9720 and resistance at 9800
Close below 9720 will see more downside panic till 9650---9620 and then to 9550 mark in days to come else it could test it's resistance level of 9800 again
Above 9800 will see more upside rally till 9880---9920 and then to 10050 mark
Daily Derivative Outlook 14th August
• Nifty (Aug) futures closed at a Premium of 30.25 points versus a premium of 34.50 points.
• Maximum call writing was seen at 9800 strike and maximum Put writing was seen at 9200 and maximum option buying (unwinding by option writers) was seen at 9900 PE and 10500 CE strike.
• Maximum positions are at 10000 CE and 9500 PE.
• TVSMOTOR (18%), BERGERPAINT (18%), IGL (16%), SBIN (15%) and POWER (13%) were the top gainers in open interest in the market.
• NBCC (-11%), SINTEX (-11%), SRF (-11%), CHENNPETRO (-10%) and DCBBANK (-10%) were the top losers in open interest in the market.
• The Nifty Put Call Ratio (PCR) finally stood at 0.85.
• Advance Decline ratio in F&O segment was at 0.10, Advance (89) + Decline (129) + Unchanged (1) = 219
Derivative Idea (14-08-2017)
IDBI losses around 1.45% of open interest as long unwinding on Fridays’ trade. It has also breached its immediate support level on the lower side with noticeable rise in volumes.
Support 52.00, Below 52.00 panic remain continue till 48.00—45.00 and then to 42.00 mark.
Hurdle and stop loss above 55.00
Current chart pattern and derivatives data suggest that we expect further panic in coming sessions.
Trading Recommendation
Sell IDBI (AUG) future below 52.00 Stop loss 55(on closing basis) Target 48.00—45.00 and then to 42.00
Top Pick 14th August
Petronet LNG
The stock is continuously trading in higher highs and higher lows on weekly charts, which is bullish in nature.
-Despite the fall in the broader markets, the stock still is holding the trend and trading above the important levels of 200, which may act support for coming days.
-PLNG’s share of India’s LNG imports has risen from 71%/77% (FY16/17) to 84% (1QFY18).
Recommendations
Above 215 will see upside rally till 232---240++ mark in days to come.
Looks bearish only if close below 200 mark. Any sharp downside fall will be buying opportunity in it.
Corporate Action
Motherson Sumi Systems Limited- AGM/Dividend - Rs 2 per share
Multi Commodity Exchange of India Limited- AGM/Dividend - Rs 15 per share
Chennai Petroleum Corporation Limited- AGM/Dividend - Rs 21 per share
Bharat Electronics Limited - AGM/Dividend - Rs 1.05 per share
Results Today
Tata Power Company Limited
NBCC (India) Limited
Jain Irrigation Systems Limited
Infibeam Incorporation Limited
IDBI Bank Limited
Grasim Industries Limited
Granules India Limited
Coal India Limited
More Will Update Soon!!
