Nifty 9912 /Sensex 31702/ Bank Nifty 24236
11 Advances / 40 Declines/ 0 Unchanged
Geo-political worries drag benchmarks lower
Indian equity benchmarks ended the sluggish day of trade with a cut of over half a percent on Monday on geopolitical tensions surrounding around North Korea after its latest hydrogen bomb test. Markets started the session on pessimistic note and extended their fall later on after the country’s former central bank head Raghuram Rajan cautioned the government that short-term costs of a radical ban of high-value currency notes would outweigh the long-term benefits. Report that India’s total public debt (excluding liabilities under the public account) increased by 3.6 percent to Rs 63.35 lakh crore at the end of June 2017, too dampened sentiments. The debt of the government was Rs 61.13 lakh crore at the end of March 2017. According to the report on debt management released by the finance ministry, this indicated a quarter-on-quarter rise of 3.6 percent in Q1 FY18 as compared to a decline of 1.15 percent in the previous quarter (Q4 FY17).
Sentiments also weighed on by foreign brokerage report that investment continued to slip to 27.5 percent of GDP, from 29.2 percent in June 2016, with high lending rates dampening demand and sustaining excess capacity. It added that lending rate cuts are key to economic growth recovery and banks should lower rates by 25 bps before the start of the busy season in October to accelerate reforms momentum. Separately, another global brokerage firm lowered India’s GDP growth forecast to 6.6 percent for this fiscal from 7.2 percent earlier. The brokerage said that the growth is expected to pick up in coming quarters as the economy normalizes post implementation of the GST. According to official data, India’s economic growth slipped to a three-year low of 5.7 percent in April-June as disruptions caused by demonetization spilled over to the third straight quarter amid a slowdown in manufacturing activities.
Weak opening in European counters too dampened sentiments amid fresh concerns over geopolitical tensions in the region. Euro zone producer prices grew more slowly in July than expected by markets. Asian markets ended mostly in red after a weekend nuclear weapons test by North Korea that Pyongyang claimed was a hydrogen bomb capable of fitting onto an ICBM.
Back home, traders failed to get any sense of relief with chairman of the New Development Bank of BRICS, K.V. Kamath’s statement that demonetization has proved to be good exercise for India, as it has achieved the goals of eliminating illicit and counterfeit cash from the economy. Steel sector stocks which were shining initially too ended in red despite Steel Minister Chaudhary Birender Singh said to produce more special steel to cut imports. He said that PSUs should develop appetite for special steel as value addition remains the mantra for success. Meanwhile, Apex Frozen Foods made a stellar debut on the bourses today and ended with a gain of around 20% at Rs 209.85 per share as against its issue price of Rs 175 per share.
FII’s Activity 4-Sept-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 3193.04 crore against gross selling of Rs 3938.49 crore. Thus, FIIs stood as net sellers of Rs 745.45 crore in equities.
In the debt segment, the gross purchase was of Rs 396.70 crore with gross sales of Rs 334.62 crore. Thus, FIIs stood as net buyers of Rs 62.08 crore in debt.
Now what to expect??
Nifty Levels
Nifty unable to breached 10020 level and crashed vertically…
Now what to expect???
Below 9920 will see more downside panic till 9850---9820 and then to 9700 marks else it could test its resistance level of 10020 again.
Close above 10020 will see upside rally till 10050 - 10080 and then to 10170 marks.
Trade with levels only.
Daily Derivative Outlook 5th September 2017
• Nifty September 2017 futures closed at 9927.65 on Monday at
a premium of 14.80 points over spot closing of 9912.85.
• Maximum call writing seen at 10000, Maximum put writing seen at 9700.
• Maximum positions are at 10000 CE and 9700 PE.
• JSWENERGY (24%), OILINDIA (21%), MCDOWELL-N (14%), BERGERPAINT (11%) and PAGEIND (11%) were the top open interest gainers in the market.
• RELCAPITAL (-30%), INDUSINDBK (-9%), BAJAJAUTO (-8%), INDIGO (-8%) and COALINDIA (-7%) were the top open interest losers in the market.
• The Nifty Put Call Ratio (PCR) finally stood at 1.30 for September month contract.
• Advance Decline ratio in F&O segment was at 1.16, Advance (42) + Decline (176) + Unchanged (0) = 219
Derivative Idea (05-09-2017)
REC gain around 6.8% of open interest as short build up on Monday’s trade. It has also breached its immediate Support level of 167.00 on the lower side with noticeable rise in volume.
Now what to expect??
Hurdle at 160.50. Break and sustain below 160.50 take it to 153--150 and then to 148.00 mark in days to come.
Hurdle and stop loss above 167
Current chart pattern and derivatives data suggest that we expect further panic in coming sessions.
Trading Recommendation(05-09-17)
Sell REC (SEPT) future below 160.50 Stop loss 167(on closing basis) Target 153--150 and then to 148.00++
Corporate Action
Castrol India Limited-Interim Dividend - Rs 4.50 per Share
Reliance Capital Limited-Scheme of Arrangement
Hindalco Industries Limited-Annual General Meeting/Dividend - Rs 1.10 per Share
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