Update on Nifty levels, Bank Nifty levels and Equity Pick of the day 26th Oct 2017
Nifty 10295 /Sensex 33042/ Bank Nifty 25035
24 Advances / 26 Declines/ 0 Unchanged
Govt package to boost economy take benchmarks to record highs
Wednesday turned out to be a fabulous day of trade for Indian equity benchmarks with frontline gauges hitting record highs and ending above their crucial 33,000 (Sensex) and 10,250 (Nifty) levels for the first time ever after the Union Cabinet on Tuesday announced various measures to boost economy. Markets made a firm start and traded jubilantly throughout the session, as sentiments remained up-beat with Union Cabinet approving a massive recapitalisation plan for public sector banks (PSBs) worth Rs 2.11 lakh crore. Of this amount, Rs 1.55 lakh crore would be raised through recapitalisation bonds. Another Rs 76,000 crore would be available from budgetary support and raised through market borrowings. The whopping Rs 14 lakh crore package announced by the Union Cabinet apart from the massive recapitalisation plan for public sector banks, also include investments in key development sectors such as Rural Roads, Housing, Railways, Power, Highways and Digital Infrastructure. Traders also took some encouragement with Union Finance Minister Arun Jaitley’s statement that the Indian economy was on a strong wicket with sound macro-economic fundamentals.
Some support also came on report that the government has collected Rs 92,150 crore as Goods and Services Tax (GST) in September from 42.91 lakh business. The finance ministry said that of this, Rs 14,042 crore is on account of central GST, while state GST is to the tune of Rs 21,172 crore. Integrated GST collections stood at Rs 48,948 crore, of which Rs 23,951 crore was on account of imports. Adding to the optimism, Finance Minister Arun Jaitley said that Indian economy is on a strong wicket with sound macro-economic fundamentals. He added that In dia has been the fastest growing major economy for the last three years and the attempt is to maintain high growth rate in coming years.
Positive trade in European counters too aided sentiments, as investors reacted to new earnings reports and monitored fresh economic data. Britain’s economy unexpectedly picked up speed in the three months to September, putting the Bank of England firmly on track to raise interest rates next week for the first time a decade. Asian markets ended mixed on Wednesday. Japan’s government may be able to declare that the economy has made a sustained exit from deflation before it implements a scheduled sales tax hike in October 2019.
Back home, Economic Affairs Secretary Subhash Garg said that GST has been the biggest tax reform, along with other ones like demonetization and the battle against black money. The secretary added that the current economic slowdown is bottoming out. Fiscal deficit is under control and that the government is unlikely to overshoot its target of 3.2 percent fiscal deficit at the end of the current fiscal year. On the sectoral front, IT sector stocks remained on buyers’ radar reacting to the Infosys numbers, which reported a net profit of Rs 3,726 crore for the quarter ended September 30, 2017, up 7 per cent sequentially and 3.4 per cent year-on-year. But, the Nasdaq-listed company has cut its full-year revenue guidance, forecasting slower-than-industry growth. Infosys said FY18 revenue would grow at 5.5-6.5% in constant currency.
FII’s Activity 25th-Oct-17
The FIIs as per Wednesday’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 4039.94 crore against gross selling of Rs 5231.43 crore. Thus, FIIs stood as net sellers of Rs 1191.49 crore in equities.
In the debt segment, the gross purchase was of Rs 2051.15 crore with gross sales of Rs 798.76 crore. Thus, FIIs stood as net buyers of Rs 1252.39 crore in debt.
Nifty Levels
We clearly indicated nifty looks bullish above 10245 level marks, its flared and made a high of 10351 and almost hit all the target.
Now what to expect???
Above 10360 will see more upside rally till 10400 and then to 10450---10485 mark else it could test its support level of 10150 again.
Closed below 10150 will see more downside panic in Nifty.
Trade within a range
Bank Nifty
Above 25150 will see more upside rally till 25250 and then to 25350---25500 mark else it could test its support level of 24400 again.
Break and sustain below 24400 will see more downside panic.
Trade within a range
Daily Derivative Outlook (26th Oct 2017)
• Nifty October 2017 futures closed at 10289.90 on Wednesday at a discount of 5.45 points over spot closing of 10295.35.
• Maximum call writing seen at 10200, Maximum put writing seen at 10100.
• Maximum positions are at 10300 CE and 10000 PE.
• UBL (28%), PNB (27%), KOTAKBANK (20%), L&TFH (18%) and INDUSINDBK (18%) were the top gainers in terms of open interest.
• BANKBARODA (-31%), IDBI (-27%), SBIN (-23%), ZEEL (-16%) and GRASIM (-14%) were the top losers in terms of open interest.
• The Nifty Put Call Ratio (PCR) finally stood at 1.82 for October month contract.
Derivative Idea (26-10-2017)
M&M Finance losses -26% of open interest as long unwinding on Wednesday trade. It is trading below its support level of 405.
Now what to expect??
Overall Trend looks weak. Minor support at 395 Break and sustain below 395 will see sharp downside panic till 370--350 and then to 320 mark.
420 will act as major hurdle.
Current chart pattern and derivatives data suggest that we expect further panic in coming sessions.
Trading Recommendation(26th Oct 2017)
Sell M&M Finance below 395 Stop loss 420(on closing basis) Target 365---350.
Corporate Action
Ex-Dividend Today
Dewan Housing Finance Corporation Limited--Interim Dividend - Rs 3 per Share
Result Today
Cummins India Limited
Yes Bank Limited
SREI Infrastructure Finance Limited
United Spirits Limited
L&T Finance Holdings Limited
Jubilant Foodworks Limited
Equitas Holdings Limited
Biocon Limited
More Will Update Soon!!
