Nifty 9884 /Sensex 31646/ Bank Nifty 24308
38 Advances / 11 Declines/ 0 Unchanged
Benchmarks gain around a percent on penultimate day of F&O expiry
Wednesday turned out to be a fabulous day of trade for the Indian equity benchmarks, with frontline gauges garnering gains of around a percent on account of increased buying in select stocks coupled with covering-up of pending short-positions ahead of August month F&O expiry tomorrow. Market participants accumulated quality stocks at reasonable valuations after yesterday’s drubbing. Sentiments remained optimistic since beginning, with key gauges making a gap-up opening and trading jubilantly through the session after concerns about North Korea’s firing of a missile over Japan ebbed. Traders took some encouragement with Finance Minister Arun Jaitley’s statement that goods and services tax (GST) collections have exceeded estimates in the first month of the landmark levy’s rollout, despite a significant number of assessees not having filed returns yet. Finance Minister said that GST mopup in July pegged at Rs 92,283 crore and could rise further. Some support also came with NITI Aayog’s statement that enhancing access to low-cost capital to businesses could serve as an important vehicle for improving the business environment, especially in poor states like Bihar.
Markets extended rally in afternoon deals with Finance Ministry expressing its confidence of meeting the 3.2% fiscal deficit target for the financial year 2017-18, despite the low dividends from the Reserve Bank of India (RBI) and muted proceeds from stake sales in public sector enterprises till now. However, markets trimmed some of their gains in last leg of trade to end off day’s highs, as anxiety spread among the investors with ICRA’s latest report stating that the profitability of India Inc got hurt with the margins contracting by as much as 1.80% to 15.7% on a year-on-year basis on account of introduction of new tax regime. Some concerns also came with a private report that India's economic growth is likely to remain soft and the GDP is expected to grow by 6 per cent in April-June, down from 6.1 per cent in the preceding quarter.
On the global front, European markets made a firm opening and were trading in fine fettle in early deals as North Korea jitters subsided. Meanwhile, UK consumer credit figures, euro zone sentiments and preliminary inflation data for Germany are all likely to be released during market trade. Asian markets ended mostly in green, though Chinese market ended in red after the state planning head said that the country may struggle to meet its investment and foreign investment goals.
Back home, stocks related to Infra sector edged higher, as the Prime Minister Narendra Modi said India could no longer afford to delay modernization of its infrastructure if the country was to scale new heights. Auto and auto ancillary stocks ended higher on Wednesday even after the Cabinet cleared an ordinance to hike cess on luxury cars and sport-utility vehicles to 25% from 15% under the goods and services tax (GST) regime at present. The move came after the GST Council earlier this month approved increasing cess on SUVs, mid-sized, large and luxury cars that had become cheaper post GST rollout on 1 July.
FII’s Activity 30-Aug-17
The FIIs as per Tuesday’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 5998.13 crore against gross selling of Rs 5901.74 crore. Thus, FIIs stood as net buyers of Rs 96.39 crore in equities.
In the debt segment, the gross purchase was of Rs 1252.70 crore with gross sales of Rs 1116.08 crore. Thus, FIIs stood as net buyers of Rs 136.62 crore in debt.
Now what to expect??
Nifty Levels
Above 9920 will see upside rally till 9950 - 9980 and then to 10050 marks else it could test its support level of 9820 again.
Close below 9820 will see more downside panic till 9760---9700 mark.
Trade with levels only.
Daily Derivative Outlook 31st August 2017
• Nifty (Aug) futures closed at a Premium of 4.20 points versus a premium of 2.95 points.
• Maximum call writing seen at 9800, Maximum put writing seen at 9650 and maximum option buying (unwinding by option writers) was seen at 9900 PE and 10100 CE strike.
• Maximum positions are at 10000 CE and 9800 PE.
• Long build up: ADANIPOWER (68.99), HAVELLS (61.62%) JPASSOCIATE (60.05%), STAR (53.13) UJJIVAN (52.13%)
• Short Build up: NTPC (40.99%), Apollo Tyre (26.36%), TECHM (23.41%), BERGERPAINT (22.54%) and M&M (19.57).
• The Nifty Put Call Ratio (PCR) finally stood at 1.25 for August month contract.
• Advance Decline ratio in F&O segment was at 1.49, Advance (221) + Decline (7) + Unchanged (1) = 219
Derivative Idea (31-08-2017)
Apollo Tyre gain around 26.36% of open interest as short build up on Wednesday’s trade. It has also breached its immediate support level on the lower side with noticeable rise in volumes.
Now what to expect??
Minor Support at 248 and Resistance at 256
Break and sustain below 248 will take it to 240--235 and then to 228++ mark in days to come.
Hurdle and stop loss above 256
Current chart pattern and derivatives data suggest that we expect further panic in coming sessions.
Trading Recommendation(31-Aug-17)
Sell Apollo Tyre (SEPT) future below 248.00 Stop loss 256(on closing basis) Target 240--235 and then to 228++
Aarti Industries-Top Pick(31-8-17)
Aarti Industries closed at Rs. 844.7 which was 20.9 points more than today's lowest price and 2.8 points less than the days highest with the day's lowest being Rs. 823.8 and highest being Rs. 847.5.
A total of 24,958 shares were traded by this time of the day with the 5 day average volume being 44,887 , 10 day average volume being 43,055 and 30 day average volume being 34,446 .
Compared to the previous day the 5 day average volume rose 3602 stocks, 10 day average volume rose 63 stocks and 30 day average volume fell 510 stocks.
In the last 52 weeks the lowest price observed was Rs. 531.60 while the highest price was Rs. 1039.70.
Now what to expect???
Break and sustain above 848 will see upside rally till 860---870++ mark in days to come.
Looks bearish only if close below 837 marks.
Any sharp downside panic will be buying opportunity in it.
Trading Recommendation (31st August 2017)
Buy Aarti Industries above 848 with stop loss of 837 (on a closing basis) Target 860--870+++.
Corporate Action- Ex-date
GAIL- Annual general meeting/Face Value Split (Sub-Division) - From Rs 10/- Per Share to Re 1/- Per Share
Gsfc - Annual General Meeting/Dividend - Rs 2.20 per Share
Indiabulls Housing Finance- Annual General Meeting
Infibeam - Annual general meeting/Face Value Split (Sub-Division) - From Rs 10/- Per Share To Re 1/- Per Share
Coal India - Annual General Meeting
More Will Update Soon!!
