Nifty 9794 /Sensex 31449/ Bank Nifty 24115
36 Advances / 15 Declines/ 0 Unchanged
Bargain hunting help benchmarks to snap five days losing streak
Snapping five days losing streak, Indian equity benchmarks showed splendid recovery on Monday with frontline gauges garnering gains of three fourth of a percent, as traders opted to buy beaten down but fundamentally strong stocks. After a gap-up opening markets traded with traction through the session and reclaimed their crucial 9,800 (Nifty) and 31,500 (Sensex) levels, though marginal sell off in dying hour of trade pulled key indices below those levels. Sentiments remained optimistic with Niti Aayog Vice Chairman Arvind Panagariya’s statement that resolution of bad loans in the banking system is on right track and will open the door to rapid credit expansion and growth. Some support also came with the report that foreign investors have pumped in over Rs 10,000 crore in the Indian debt markets this month so far, following the RBI’s decision to cut key interest rates. Adding to the optimism, Union Minister of State for Finance and Corporate Affairs Arjun Ram Meghwal said that the number of tax slabs in the Goods and Services Tax (GST) regime would be reduced with improvement in revenue.
Private report stating that the Indian economy is at the cusp of entering its strongest growth phase and a full blown bull market is yet to play out with the wide-based Nifty expected to touch 11,500 in 2018, too aided sentiments. Market participants shrugged off wholesale price index (WPI) inflation data which increased to 1.88% in the month of July versus 0.90% in the month of June and 0.63% during the corresponding month of the previous year. Build up inflation rate in the financial year so far was 0.62% compared to a buildup rate of 3.81% in the corresponding period of the previous year. Also, investors have not paid any attention towards India’s industrial production data which entered the negative territory in June. India’s industrial output contracted by 0.1% in the month of June 2017, as compared to an expansion of 8% in the previous year-ago period, also lower than 2.8% growth in May.
Firm opening in European counters too aided sentiments with CAC, DAX and FTSE trading in green in early deals after senior US officials sought to play down risks of a military conflict with North Korea. Asian markets ended mostly in green, however Japanese Nikkei was down despite second-quarter Japan GDP surprising to the upside. Japan’s second quarter surged an unexpected 4.0% on year as investment in plant and equipment lifted sentiments for the sixth straight quarter of expansion.
Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too participated strongly in the rally. On the sectorial front, telecom remained buzzing, as the telecom regulator RS Sharma said that recommendations on contentious interconnect usage charge should be finalized by August end. However, the PSU Banking stocks remained under pressure on report that the banking regulator is examining whether auditors at these state-run lenders followed RBI guidelines on write-downs, provisioning and NPAs. The RBI has questioned scores of auditors at 27 PSBs on the process and logic they had used to compute and report write-downs at the lenders.
FII’s Activity 14-Aug-17
The FIIs as per Monday’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 4134.26 crore against gross selling of Rs 5963.69 crore. Thus, FIIs stood as net sellers of Rs 1829.43 crore in equities.
In the debt segment, the gross purchase was of Rs 418.37 crore with gross sales of Rs 1107.26 crore. Thus, FIIs stood as net sellers of Rs 688.89 crore in debt.
Now what to expect next??
Nifty Levels
As expected Nifty touch 9800 level
Now what to expect???
Above 9800 will see upside rally till 9880---9920 and then to 10050 mark
Support and stop loss below 9720 on closing basis
Bank Nifty Levels
Support at 24000 and resistance at 24400
Below 24000 will see panic till 23600---23450 mark else
It could test its resistance level of 24400 again.
Above 24400 will see more upside rally till 24700---24850 mark
Trade with levels only
Daily Derivative Outlook 16th August
• Nifty August 2017 futures closed at 9815.60 on Monday at a premium of 21.45 points over spot closing of 9794.15.
• Maximum call writing was seen at 10050 strike and maximum Put writing was seen at 9500 and maximum option buying (unwinding by option writers) was seen at 9200 PE and 10300 CE strike.
• Maximum positions are at 10000 CE and 9800 PE.
• HEXAWARE (20%), VOLTAS (20%), JSWENERGY (18%), HDIL (15%) and PVR (14%) were the top gainers in open interest in the market.
• MGL (-13%), BERGERPAINT (-11%), DLF (-8%), SUZLON (-8%) and UBL (-7%) were the top losers in open interest in the market.
• The Nifty Put Call Ratio (PCR) finally stood at 0.92 for August month contract.
• Advance Decline ratio in F&O segment was at 0.10, Advance (193) + Decline (25) + Unchanged (1) = 219
Derivative Idea (16-08-2017)
BEML gain around 10.00% of open interest as long build up on Monday’s trade. It is trading near its immediate resistance level which is stood at 1765.00
Break and sustain above 1765 will take it to 1820—1850 and then to 1880++ mark in days to come.
Support and stop loss below 1680.
Current chart pattern and derivatives data suggest that we expect further rally in coming sessions.
Trading Recommendation
Buy BEML (AUG) future above 1765.00 Stop loss 1680(on closing basis) Target 1820--1850 and then to 1880
Corporate Action
IRB Infrastructure Developers Limited- AGM
SRF Limited - Interim Dividend - Rs 6/- Per Share
More Will Update Soon!!
