Update on Nifty levels, Bank Nifty levels, Derivative Outlook and Equity Pick of the day 4th Oct 2017
Nifty 9859/Sensex 31497/ Bank Nifty 24103
38 Advances / 12 Declines/ 0 Unchanged
* Benchmarks witness spirited performance; Nifty reclaims 9,850 mark*
Tuesday turned out to be a fabulous day of trade for Indian equity benchmarks, with frontline gauges garnering gains of around three fourth of a percent ahead of RBI monetary policy review begins today and the decision is due tomorrow. This has led to unabated buying by domestic financial institutions, which added to the positive mood. Sentiments remained jubilant since start with bourses making gap-up opening, as traders took encouragement with Finance Minister FM Arun Jaitley’s indication that the government would consider reducing the goods and services tax slabs and easing compliance burden for small taxpayers once revenues from GST better those from the previous tax regime. Some support also came after Industry body Assocham urged the government to relax fiscal deficit targets and boost public expenditure as a means to accelerate India’s economic growth, which slipped to 5.7 percent in the June quarter. Former RBI Governor C Rangarajan also said that the government needs to “pick up very fast” to be able to maintain a healthy annual growth.
Markets maintained the bullish momentum and traded with jubilation till end as some support came after the Nikkei India Manufacturing Purchasing Managers’ Index, or PMI, remained unchanged at 51.2 in September. As per the report, September data painted an encouraging picture as the sector continued to recover from the disruptions caused by the introduction of the GST in July. Adding to the optimism, the Centre has begun a slew of measures to boost medium and small scale industries, exports and the textile sector. As per report, September 27 Cabinet meeting had discussed proposals related to providing stimulus to medium and small-scale industries, exports and the textile sector which have not performed to their optimum strength in last few quarters.
Firm global cues provided much needed support to domestic markets, with European markets making a positive start, as market sentiments remained strong despite the Las Vegas mass shooting late Sunday and ongoing political turmoil in Spain. Asian markets ended mostly in green led by Japanese Nikkei, which edged higher by over a percent as Japanese companies’ inflation expectations eased slightly in September from three months ago in a worrying sign the economy continues to struggle with a deflationary mindset.
Back home, Finance Minister Arun Jaitley’s statement that net collections till September 18 of this fiscal grew 15.7% to Rs 3.7 lakh crore, too aided sentiments. The number of taxpayers rose to 6.26 crore in 2016-17 from 4.72 crore in 2012-13. Traders shrugged off Fitch Ratings’ report of trimming its forecast for India’s economic growth in 2017-18 by half a percentage point to 6.9% from its earlier projection of 7.4%. Meanwhile, SBI Life Insurance Company made a tepid debut on the bourses and went home with a marginal gain 1%. The Rs 8,400 crore IPO was subscribed 3.58 times.
FII’s Activity 3rd-Oct-17
The FIIs as per Thursday’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 5719.92 crore against gross selling of Rs 6238.16 crore. Thus, FIIs stood as net sellers of Rs 518.24 crore in equities.
In the debt segment, the gross purchase was of Rs 1519.51 crore with gross sales of Rs 1563.66 crore. Thus, FIIs stood as net sellers of Rs 44.15 crore in debt.
Now what to expect ??
Nifty Levels
Close above 9905 will see more upside rally till 9960 and then to 10065---10120 mark again else it could test it's support again
Break and sustain below 9800 will see more downside panic till 9765 and then to 9730---9683
Trade within a range
Bank Nifty
Close above 24250 will see more upside rally till 24470 and then to 24580---24720 mark again
Break and sustain below 24000 will see more downside panic till 23860---23750 and then to 23580
Trade within a range and wait for confirmation
Daily Derivative Outlook 4th Oct 2017
• Nifty (Oct) futures closed at a Premium of 8.95 Points versus Premium of 11.95 points
• Maximum call writing seen at 10100, Maximum put writing seen at 9700.
• Maximum positions are at 10000 CE and 9700 PE.
• POWERGRID (25%), GAIL (22%), VOLTAS (16%), HDFC (14%) and PIDILITIND (13%) were the top open interest gainers in the market.
• ESCORTS (-8%), ICICIPRULI (-6%), DIVISLAB (-4%), RAMCOCEM (-4%) and BAJAJFINSV (-4%) were the top open interest losers in the market.
• The Nifty Put Call Ratio (PCR) finally stood at 1.24 for October month contract.
Derivative Idea (04-10-2017)
PFC gain around 0.50% of open interest as long build up on Tuesday’s trade. It is trading near its resistance level of 125.50, while PFC formed a squat bar and on daily chart.
Now what to expect??
Hurdle at 125.50, above 125.50 rally remain continue till 132--135 and then to 138++ mark in days to come.
Support and stop loss below 120.00
Current chart pattern and derivatives data suggest that we expect further rally in coming sessions.
Trading Recommendation (4th Oct 2017)
Buy PFC future above 125.50 Stop loss 120 (on closing basis) Target 132—135 and then to 138++.
KEI Industries - Top Pick (4th Oct 2017)
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KEI Industries, after prolong corrective phase, has been trading in a broader range of 66--367 for last one year.
Now what to expect???
KEI Industries break and sustain above 367 will see upside rally till 382—390 mark in days to come.
Looks bearish only if close below 352 marks.
Any sharp downside panic will be buying opportunity in it.
Trading Recommendation (4th Oct 2017)
Buy KEI Industries above 367 with stop loss below 352 (on a closing basis) Target 382---390+++
More Will Update Soon!!
