Update on Nifty levels, Bank Nifty levels, Derivative Outlook and Equity Pick of the day 5th Oct 2017
Nifty 9914/Sensex 31671/ Bank Nifty 24113
33 Advances / 17 Declines/ 0 Unchanged
Benchmarks extend winning streak as RBI maintains status quo
Extending northward journey for fourth straight session, Indian equity benchmarks ended the session with a gain of over half a percent on Wednesday, reclaiming their crucial 9,900 (Nifty) and 31,600 (Sensex) levels, as the Reserve Bank of India’s (RBI's) decision to keep repo rate unchanged at 6.0 percent was in line with investors’ expectation in view of upward trend in inflation. The central bank, however, has slashed the statutory liquidity ratio or the percentage of deposits that banks have to park in government securities, by 0.50 percent to 19.50 percent. The move is expected to raise buoyancy in the loans market as banks will have slightly higher funds for lending. Soon after a cautious start markets gained momentum and traded with traction through the session, as traders took encouragement with the growth of eight core infrastructure industries which surged to five-month high by 4.9 percent in August 2017, as compared to 2.4 percent in July 2017, on the back of a double-digit jump in coal production and subsequent rise in electricity generation. According to the data released by the ministry of Commerce and Industry showed the combined Index of eight core industries stood at 123.6 in August, 2017, which was 4.9 percent higher compared to the index of August, 2016.
Sentiments also remained buoyed with foreign brokerage report highlighting that a majority 77 percent of the mid market enterprises (MMEs) in the country are confident about the domestic economy and expect higher revenue growth compared to their global peers. Separately, the government sees the decline in growth as a hiccup and expects the economy to pick up pace in the fiscal second quarter as teething troubles with GST get resolved and the effect of demonetization wanes. The latest high-frequency indicators such as commercial vehicles sales, core sector growth and manufacturing PMI bolster this contention.
On the global front, European markets were trading mostly in red in early deals, as investors kept a close eye on events in Catalonia, where the leader of the region’s separatist government has said he will declare independence in a matter of days. Asian markets ended mostly in green on Wednesday. Japanese shares edged higher led by auto stocks as US demand for cars ballooned following damage from recent hurricanes.
Back home, stocks related to oil and gas counters remained on buyers’ radar, as the government reduced basic excise duty rate on both branded and unbranded petrol and diesel by Rs 2 per litre. The Finance Ministry said that this has been done to cushion the impact of rising international prices of crude petroleum oil, petrol and diesel on their retail sale prices. Also, a report by Moody’s has said that India will surpass China as the fastest-growing Asian market for petroleum products in 2018, on the back of a 6 per cent demand growth. Public sector bank’s stocks edged higher after the central bank, in its policy, made a pitch for recapitalization of PSU banks. It said that recapitalizing public sector banks adequately will ensure that credit flows to the productive sectors are not impeded and growth impulses not restrained.
FII’s Activity 4th-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 5959.89 crore against gross selling of Rs 6397.40 crore. Thus, FIIs stood as net sellers of Rs 437.51 crore in equities.
In the debt segment, the gross purchase was of Rs 3490.64 crore with gross sales of Rs 771.85 crore. Thus, FIIs stood as net buyers of Rs 2718.79 crore in debt.
Now what to expect??
Nifty Levels
Above 9960 will see more upside rally till 10065 and then to 10120---10170 mark again else it could test it's support again
Break and sustain below 9850 will see more downside panic till 9800 and then to 9765---9720
Trade within a range
Bank Nifty
Close above 24250 will see more upside rally till 24470 and then to 24580---24720 mark else it could test it's support again.
Break and sustain below 24000 will see more downside panic till 23860---23750 and then to 23580
Trade within a range
Daily Derivative Outlook 5th Oct 2017
• Nifty (Oct) futures closed at a Premium of 15.55 points versus a premium of 8.95 points.
• Maximum call writing seen at 10100, Maximum put writing seen at 9600.
• Maximum positions are at 10000 CE and 9800 PE.
• TORNTPHARM (25%), BATAINDIA (24%), PAGEIND (20%), APOLLOTYRE (18%) and MOTHERSUMI (14%) were the top gainers in open interest in the market.
• BHARATFORG (-4%), INDIACEM (-4%), HEROMOTOCO (-4%), JINDALSTEL (-4%) and POWERGIRD (-3%) were the top losers in open interest in the market.
• The Nifty Put Call Ratio (PCR) finally stood at 1.29 for October month contract.
Derivative Idea (05-10-2017)
BEML gain around 7.4% of open interest as long build up on Wednesday’s trade. It is trading near its resistance level of 1700, while BEML formed a squat bar and on daily chart.
Now what to expect??
Hurdle at 1700, above 1700 rally remain continue till 1780—1800 and then to 1850 ++ mark in days to come.
Support and stop loss below 1625.00
Current chart pattern and derivatives data suggest that we expect further rally in coming sessions.
Trading Recommendation (5th Oct 2017)
Buy BEML future above 1700 Stop loss 1625 (on closing basis) Target 1780--1800 and then to 1850++.
BEL- Top Pick
BEL break and sustain above 165.50 will see upside rally till 168--170 mark in days to come.
Looks bearish only if close below 163 marks.
Trading Recommendation (5th Oct 2017)
Buy BEL above 165.50 with stop loss below 163 (on a closing basis) Target 168--170.
More Will Update Soon!!
