Nifty 9754 /Sensex 31258/ Bank Nifty 23936
9 Advances / 41 Declines/ 1 Unchanged
Weakness in global markets, Infosys drag markets lower for second straight session
Indian equity benchmarks failed to hold on to their initial gains and ended in red terrain on Monday, breaching their crucial 9,800 (Nifty) and 31,300 (Sensex) levels, as weak global cues and fall of over 5% in Infosys continued to hurt sentiments. Markets, soon after a positive opening, started moving southward to enter into negative trajectory in second half of trade. Afterwards, key gauges never looked confident of recovering and gradually extended its losses till end to close near intraday lows, as investors opted to remain on sidelines ahead of the PM Narendra Modi’s meet with industry leaders for policy inputs to build a ‘New India’. Sentiments remained dampened after the private report highlighted that consumer confidence in India declined in the second quarter of this year amid concerns regarding job security and lower optimism on employment prospects. Besides, cautionary spending by consumers towards the end of 2016 still had some impact on the quarter under consideration.
Adding to the pessimism, the India Meteorological Department’s (IMD) weekly press release highlighted that about a quarter of the country has received deficient rainfall in the first half of the monsoon, but hopes the situation will improve in the second half. The Met department states that there is a 4% deficit rain across the country, but 26% part of the country has received deficient rain. Markets extended losses on report that as many as 322 infrastructure projects worth Rs 150 crore or above each have seen cost overrun of Rs 1.71 lakh crore due to delays and other reasons by March 2017. Furthermore, according to the RBI data during the week to August 4, there was an incremental credit de-growth of Rs 1.1 trillion. This comes after a record low full year credit growth in FY17 when credit growth slipped to the lowest in the past six decades at 5.1%. This was the lowest since fiscal 1953 when it grew a tepid 1.8%.
Weak opening in European counters too dampened sentiments, as geopolitical tensions continued to weigh on markets’ sentiments, dampening demand for risk-related assets such as equities. Asian markets ended mostly in red; as US-South Korea joint military drills kicked off and a key meeting of global central bankers loomed.
Back home, selling was both brutal and wide-based as none of sectoral indices on BSE were spared. Counters, which featured in the list of worst performers include, software, technology and public sector undertakings. Infosys closed in red after multiple brokerages have downgraded the stock following Vishal Sikka’s resignation as the chief executive and managing director. The research house sees significant senior level departures over next six months till new CEO is found and also sees downside risks to guidance for FY18/19. On the sectorial front, banking stocks ended in red despite reports that the government and RBI are in talks to shore up public sector bank capital in a time-bound manner due to the higher provisioning burden on these lenders. These measures could include a combination of capital raising from the market, dilution of government holding, and additional capital infusion by the government, mergers based on strategic decision and sale of non-core assets.
FII’s Activity 21-Aug-17
The FIIs as per Monday’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 5035.17 crore against gross selling of Rs 6884.58 crore. Thus, FIIs stood as net sellers of Rs 1849.41 crore in equities.
In the debt segment, the gross purchase was of Rs 1522.55 crore with gross sales of Rs 354.97 crore. Thus, FIIs stood as net buyers of Rs 1167.58 crore in debt.
Now what to expect??
Nifty Levels
Close above 9850 will see upside rally till 9920---9950 and then to 10050 marks else it could test its support level of 9730 again.
Below 9730 will see more downside panic till 9690---9650 mark.
Trade with levels only.
Daily Derivative Outlook 22nd August
• Nifty August 2017 futures closed at 9768.60 on Monday at a premium of 14.25 points over spot closing of 9754.35.
• Maximum Call writing was seen at 9800 and maximum option buying (unwinding by option writers) was seen at 9500 PE and 10200 CE strike.
• Maximum positions are at 10000 CE and 9800 PE.
• OIL (13.1%), INFY (10%), PCJEWELLER (6.00%), AMARAJABAT (5.5%) and M&M (2.7%) were the top open interest gainers in the market.
• JETAIRWAYS (-3.7%), NMDC (-2.5%), BANKBARODA (-1.4%), COLPAL (-1.3%) and RAYMOND (-1.0%) were the top open interest losers in the market.
• The Nifty Put Call Ratio (PCR) finally stood at 0.85 for August month contract.
• Advance Decline ratio in F&O segment was at 0.43, Advance (70) + Decline (147) + Unchanged (2) = 219
Derivative Idea (22-08-2017)
Bank of India witness Short build up. It is trading below its support level which is stood at 140.00 On Daily chart Bank of India has given fresh trend line breakout below 140.00
Now what to expect??
Minor support at 138.50 Break and sustain below 138.50 will take it to 131--128 and then to 125 mark in days to come.
Hurdle and stop loss above 146.
Current chart pattern and derivatives data suggest that we expect further panic in coming sessions.
Trading Recommendation(22-Aug-17)
Sell Bank of India (AUG) future below 138.50 Stop loss 146(on closing basis) Target 131.00—128.00 and then to 125
Top Pick(22-Aug-17)
Exide Industries
Price just got below its 200-day exponential moving average which is a negative signal.
MACD showing negative momentum which indicates that downside side seems certain in it.
Exide Industries closing with a price of Rs. 200.75 after seeing a high of Rs. 211 and a low of Rs. 200.75.
Now what to expect???
Break and sustain below 200 will see downside panic till 195---192+++ mark in days to come.
Looks bullish only if close above 208 marks.
Trading Recommendation (22nd August 2017)
Sell Exide Industries below 200 with stop loss of 208. Target 195---192+++.
Corporate Action
Manappuram Finance Limited - Interim Dividend - Re 0.50 per Share
United Spirits Limited- Annual General Meeting
Balrampur Chini Mills Limited- Annual General Meeting
More Will Update Soon!!
