Update on Nifty levels, Bank Nifty levels, Derivative Outlook and Equity Pick of the day 26th Sept 2017
Nifty 9872 /Sensex 31626/ Bank Nifty 24165
13 Advances / 36 Declines/ 0 Unchanged
Bears hold strong grip on Dalal Street on weak global cues
Indian equity markets came under the bear’s grip on Monday with frontline gauges breaching their crucial 9,900 (Nifty) and 31,700 (Sensex) levels on subdued global cues. Markets started the session with a huge gap on the down side, as investors turned jittery on expectation of government to tinker its fiscal deficit target for FY18 by announcing an economic stimulus to revive the economy. Chief Economic Adviser (CEA) Arvind Subramanian has said that Indian economy continues to face multiple challenges and stressed on the need to tackle them on various fronts, such as exchange rate, public investments while maintaining macroeconomic stability. He said that there are lots of challenges ahead with growth slowing down and investment not picking up. He also identified rising level of stressed assets to be a key area of concern. Traders also remained cautious on account of the derivatives expiry due on Thursday and the recent spike in tensions on the Korean peninsula.
Adding to the pessimism, foreign investors remained in exit mode as they have already pulled out nearly Rs 5,500 crore from stock markets so far this month due to geopolitical concerns and a tendency to take profit. The net outflow by Foreign Portfolio Investors (FPIs) follows withdrawal of Rs 12,770 crore from equities in August. Prior to that, they had pumped in over Rs 62,000 crore in the past six months. Markets extended southward journey and domestic bourses even went to test psychological 31,500 (Sensex) and 9,850 (Nifty) levels, but the key gauges got some support near those intraday low levels as they managed to trim some of their losses to end off day’s lows, as traders took some solace with report that Prime Minister Narendra Modi would unveil the much-awaited stimulus package during a scheduled speech to the BJP national executive meeting later today.
On the global front, European counterparts were trading mostly in red. However, Germany’s DAX edged higher after Chancellor Angela Merkel secured a fourth term but saw her party weakened by a surge in support for the far-right. Asian markets, barring Nikkei, ended in red. Japanese manufacturing activity expanded in September at the fastest pace in four months as domestic and export orders picked up, a preliminary private survey showed in a sign of strengthening demand.
Back home, selling was both brutal and wide-based as none of sectorial indices on BSE were spared. Counters, which featured in the list of worst performers, include realty, basic material and healthcare. Broader markets too got clobbered out of shape and ended the session with a cut of 1-2 percent. On the sectorial front, metal stocks lost their shine, as metal prices fell in global markets in response to North Korea tensions and S&P’s downgrade of China’s credit rating. However, power stocks like Tata Power Company, Torrent Power, Adani Power and Power Grid Corporation of India closed in green amid talk of sops for the sector to boost growth. The Cabinet had discussed new power scheme last week and it is likely to be called ‘Saubhagya’. Bucking the trend, Capacity Infraprojects made a stellar listing on the bourses today and went home with a gain of around 37%.
FII’s Activity 25-Sept-17
The FIIs as per Monday’s data were net buyers in equity segment, while they were net sellers in debt segment, according to data released by the NSDL.
In equity segment, the gross buying was of Rs 6843.09 crore against gross selling of Rs 5861.91 crore. Thus, FIIs stood as net buyers of Rs 981.18 crore in equities.
In the debt segment, the gross purchase was of Rs 713.69 crore with gross sales of Rs 982.59 crore. Thus, FIIs stood as net sellers of Rs 268.90 crore in debt.
Now what to expect???
Nifty Levels
Break and sustain below 9850 will see more downside panic till 9780---9730 and then to 9680 mark else it could test its resistance level of 9950 again. Major hurdle at 10200 which is unlikely to breach for time being
Bank Nifty Level
Break and sustain below 24200 will see more downside panic till 23900---23700 and then to 23580 mark else it could test its resistance level of 24500---24700 again which is unlikely for time being.
Daily Derivative Outlook 26th September 2017
• Nifty September 2017 futures closed at 9878.65 on Monday at
a premium of 6.05 points over spot closing of 9,872.60.
• Maximum call writing seen at 9900, Maximum put writing seen at 9800.
• Maximum positions are at 10200 CE and 9700 PE.
• Long Build-up: UBL (14.90%), ANDHRABANK (6.30%), TATAPOWER (5.10%), RECLTD (3.20%) and PFC (1.4%).
• Short Build-up: JPASSOCIAT (16.40%), STAR(4.30%), SUNTV (0.6%), ADANIENT (0.10%) and GODFRYPHLP (0.40).
Interest in the market.
• The Nifty Put Call Ratio (PCR) finally stood at 0.80 for September month contract.
Tech Mahindra - Top Pick
The trading hours came to an end with Tech Mahindra closing with a price of Rs. 450.55 after seeing a high of Rs. 462. And a low of Rs. 450.05.
With this, 2,490,162 stocks were traded while the 5 day, 10day & 30 day average volumes were observed to be 1,447,111, 1,631,361, and 2,413,590 respectively.
In contrast to previous day’s values, the 5 day average volume rose 59001 stocks, 10 day average volume rose 82017 stocks and 30 day average volume rose 37295 stocks.
Now what to expect???
Tech Mahindra... Break and sustain below 450 will see downside panic till 438—432 mark in days to come.
Looks bullish only if close above 462 marks.
Any sharp upside rally will be selling opportunity in it.
Trading Recommendation (26th September 2017)
Sell Tech Mahindra below 450 with stop loss of 462 (on a closing basis) Target 438---432
More Will Update Soon!!
