Nifty 9897 /Sensex 31770/ Bank Nifty 24437
37 Advances / 13 Declines/ 0 Unchanged
Bulls tighten grip on Dalal Street; Nifty ends shy of 9,900 mark
Coming out from the initial choppiness, Indian equity benchmarks staged splendid performance on Wednesday, extending their northward journey for second straight session to end near their crucial 9,900 (Nifty) and 31,800 (Sensex) levels. Markets traded drearily in early deals, as traders remained concerned with wholesale inflation rising to 1.88 percent in July as prices of some commodities increased in the first month of Goods and Services Tax (GST) rollout. Higher Retail inflation too dampened traders’ mood as it rose to 2.36% in the month of July. However, key gauges gathered momentum in afternoon session and started moving northward, as traders took some encouragement with statements by the Prime Minister Narendra Modi who on 70th Independence Day promising to lead the country on a new track of economic progress, said his government would intensify the fight against black money and corruption. Adding to the optimism, India’s trade deficit narrowed to $11.45 billion in July from a month ago, following a slowdown in merchandise imports. Also, recording a growth of over 3.9 percent on the back of a healthy rise in shipments of engineering goods, petroleum products and chemicals, Indian exports in July grew at $22.5 billion.
Market extended their rally and ended near intraday high levels on report that Markets regulator SEBI notified relaxed norms for stake purchase in distressed listed companies by lenders, exempting them from making open offers for shareholders. The relaxation will be subject to certain conditions, including shareholders’ approval of the stake acquisition by way of special resolution. Some support also came with a foreign brokerage report highlighting that India’s growth momentum will get stronger with revival in private investment cycle and real GDP growth is expected to average at about 7.4 percent over 2017 and 2018. It also termed as faulty the argument that a 7.5-8 percent real GDP growth in the next few years will still be lower than what was achieved in the boom period of 2006-2008.
Firm opening in European counters too aided sentiments ahead of euro zone GDP figures which are expected to confirm the bloc’s economic growth was on track. The jobless rate in the UK unexpectedly dropped in June, while wage inflation registered a stronger-than-expected increase. Asian markets ended mixed, as geopolitical tensions regarding the Korean peninsula eased and investors tracked a muted performance overnight on Wall Street.
Back home, steel stocks remained on buyers’ radar on report that domestic crude steel production witnessed a 4.6 percent increase at 8.45 million tonnes (MT) in July. PSU stocks remained in focus, on report that the government is in advanced stage of appointing advisers for proposed strategic sales in state-run firms such as Scooters India, BEML, Pawan Hans and Hindustan Prefab. Shares of tobacco stocks edged higher on value buying, as most of these stocks had corrected between 25% and 40% from their recent high touched in July, after the GST Council increased cess on cigarettes.
FII’s Activity 16-Aug-17
The FIIs as per Wednesday’s data were net sellers in equity and debt segments both, according to data released by the NSDL.
In equity segment, the gross buying was of Rs 3288.81 crore against gross selling of Rs 4812.62 crore. Thus, FIIs stood as net sellers of Rs 1523.81 crore in equities.
In the debt segment, the gross purchase was of Rs 292.38 crore with gross sales of Rs 489.78 crore. Thus, FIIs stood as net sellers of Rs 197.40 crore in debt.
Now what to expect??
Nifty Levels
As per given levels almost achieved it's target. We recommended fresh buying above 9800 mark
Now what to expect???
Above 9920 will see more upside rally till 9960---9990 and then to 10050 mark
Support and stop loss below 9850 on closing basis
Daily Derivative Outlook 17th August
• Nifty (Aug) futures closed at a Premium of 7.65 points versus a premium of 21.45 points.
• Maximum Put writing was seen at 9500 and maximum option buying (unwinding by option writers) was seen at 9400 PE and 9900 CE strike.
• Maximum positions are at 10000 CE and 9500 PE.
• MFSL (38%), HAVELLS (17%), JSWENERGY (15%), MARICO (13%) and HEROMOTOCO (13%) were the top gainers in open interest in the market.
• VOLTAS (-13%), IGL (-8%), CUMMINSIND (-8%), SINTEX (-7%) and HDIL (-7%) were the top losers in open interest in the market.
• The Nifty Put Call Ratio (PCR) finally stood at 1.1 for August month contract.
• Advance Decline ratio in F&O segment was at 0.10, Advance (172) + Decline (47) + Unchanged (0) = 219
Derivative Idea (17-08-2017)
Cummins gain losses -8.00% of open interest as short unwinding on Wednesday’s trade. It is trading near its immediate resistance level which is stood at 930.00
Break and sustain above 930 will take it to 980---1020++ mark in days to come.
Support and stop loss below 890 on closing basis
Current chart pattern and derivatives data suggest that we expect further rally in coming sessions.
Trading Recommendation
Buy Cummins (AUG) future above 930 Stop loss 890(on closing basis) Target 980—1000 and then to 1020+
Top Pick 17 August
Bank of Baroda
We recommend buy in Bank of Baroda due to cleaning of books, management focus on operational efficiency & increased credit traction remain positive.
The bank’s indication of no fresh capital in the next two years and plans to sell non-core assets like NSE & UTI AMC stake may garner ~Rs 2500 crore. Merger with smaller/weaker banks remains a key risk.
Trading Recommendation
Above 149 will see upside rally till 163---170++ mark in days to come.
Looks bearish only if close below 135 mark.
Any sharp downside fall will be buying opportunity in it.
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