Update on Nifty levels, Derivative Outlook and Equity Pick of the day 23rd Oct 2017
Nifty 10146 /Sensex 32389/ Bank Nifty 24009
7 Advances / 43 Declines/ 0 Unchanged
Markets suffer setback on Muhurat trading
The Indian markets ended marginally in red on the last session of Samvat 2073, led by the financial stocks as Axis Bank reported a surge in bad loans for the September quarter and there was caution for similar results from other banks too. The Sensex closed at 32,584, 4,654 points, or over 16.67 per cent, higher while the Nifty gained 18.38% from the level where the index traded on Day 1 of Samvat 2073. Markets remained in rally mood throughout the Samvat year amid demonetisation drive announced just after Diwali that sought to curb the menace of black money in the economy and then in second half the implementation of goods and services tax (GST) bill. The gains were propelled by hopes of government reforms and a second straight year of good monsoon rains, which were expected to spur consumption.
On Thursday a short muhurat trading was conducted on both the stock exchanges for an hour between 6.30 and 7.30 pm to mark the auspicious beginning of a new Hindu accounting year, Samvat 2074. Muhurat sessions typically sees a rangebound trade and markets generally remain flat but this time it was heart break for the markets when the major averages lost over half a percent in just one hour of trade. The weakness persisted since beginning and indices kept on drifting lower till the last. The mid cap stocks too suffered decline albeit marginal, while the smallcap stocks witnessed some buying, but it was mainly the large cap and especially the banking stocks that dragged the markets lower for the session.
Finally the Sensex ended lower by 194.39 points or 0.60% to 32,389.96, while Nifty ended down 64.30 points or 0.63% to 10,146.55.
There were just 5 gainers against 25 decliners on the Sensex, the gainers were Bharti Airtel up by 2.06%, Lupin was up by 0.34%, Infy was up by 0.29%, M&M was up by 0.26% and Dr Reddy was up 0.14%. On the other hand, Adani Ports was down by 2%, ICICI Bank was down by 1.98%, Kotak Bank was down by 1.64%, NTPC was down by 1.60% and Tata Motors was down by 1.45%.
In sectoral space, barring telecom and to some extent, tech and capital goods, all the indices ended in red with banking leading the pack, closely followed by metal finance and utilities. BSE Telecom was up by 1.46%, Teck was up by 0.17 and Capital Goods was up by 0.14%. On the other hand Bankex was down by 1.27%, Metal down by 0.90%, Finance was down by 0.89%, Utilities was down by 0.77% and Power was down 0.73%.
On Nifty there were 7 advancing and 43 declining stocks. Bharti Airtel was up by 2.05%, M&M was up by 0.46%, Indiabulls Housing Finance was up by 0.41%, Infy was up by 0.37% and UPL was up by 0.33%. On the flipside, Adaniports declined by 2.31%, ICICI Bank was down by 2.13%, Tata Motors was down by 2.04%, Kotak Bank was down by 1.84% and NTPC was down by 1.83%.
In the global markets, US indices ended higher with Dow surging to fresh record highs and outperforming its counterparts by a wide margin, though in general traders seemed reluctant to make significant moves with the Commerce Department releasing a report showing a much bigger than expected slump in housing starts in the month of September. It reported that housing starts plunged by 4.7 percent to an annual rate of 1.127 million in September from the revised August estimate of 1.183 million. The Asian markets made a mixed closing with the Chinese markets declining sharply despite its third-quarter GDP coming in line with forecasts, while its September industrial production and retail sales beating estimates, though fixed asset investment missed expectations.
FII’s Activity 18th-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 4508.26 crore against gross selling of Rs 4760.54 crore. Thus, FIIs stood as net sellers of Rs 252.28 crore in equities.
In the debt segment, the gross purchase was of Rs 1351.41 crore with gross sales of Rs 843.32 crore. Thus, FIIs stood as net buyers of Rs 508.09 crore in debt.
Now what to expect???
Nifty Levels
Close above 10260 will see more upside rally till 10400 and then to 10550---10700 mark else it could test its support level of 10000 again.
Closed below 10000 will see more downside panic in Nifty.
Trade within a range
Daily Derivative Outlook 23th Oct 2017
• Nifty (Oct) futures closed at a premium of 26.65 points versus a premium of 19.25 points.
• Maximum call writing seen at 10200, Maximum put buying seen at 10200.
• Maximum positions are at 10200 CE and 10000 PE.
• TORNTPHARM (50%), HAVELLS (18%), NIITTECH (18%), MGL (17%) and RELCAPITAL (14%) were the top gainers in terms of open interest.
• POWERGRID (-12%), BEML (-8%), SHREECEM (-6%), ACC (-6%) and TECHM (-6%) were the top losers in terms of open interest.
• The Nifty Put Call Ratio (PCR) finally stood at 1.62 for October month contract.
Derivative Idea (23-10-2017)
OIL gain 0.56% of open interest as short build up on Thursday’s trade. It is trading below its support level of 343.
Now what to expect??
Minor support at 340….below 340 panic remain continue till 320—315 and then to 300 mark in days to come.
Hurdle and stop loss above 352
Current chart pattern and derivatives data suggest that we expect further panic in coming sessions.
Trading Recommendation (23 Oct 2017)
Sell Oil below 340 Stop loss 352 (on closing basis) Target 320—315 and then to 300++.
JK Lakshmi Cement - Top Pick
Demand is likely to pick up in 2HFY18 post monsoon and it factors 14 percent CAGR in revenue and 310bps improvement in margin over FY17-19E.
Margins will be supported by cost reduction initiatives such as commissioning of 7.5MW WHR (FY18), 20MW Thermal Power Plant (FY19) and Conveyor Belt in East plant.
Increase in pet coke prices and government restriction on cement prices in East likely to impact margins in 1HFY18 but management expects the risks to soften in 2HFY18.
Now what to expect???
On Daily chart, JK Lakshmi Cement above 405 level. Break and sustain above 405 will see nonstop rally till 415--430++ in weeks to come.
Looks bearish only if close below 395 marks.
Any sharp downside panic will be buying opportunity in it.
Trading Recommendation (23rd Oct 2017)
Buy JK Lakshmi Cement above 405 with stop loss below 395 (on a closing basis) Target 415-–430.
Results Today
Indiabulls Housing Finance Limited
Havells India Limited
Hindustan Zinc Limited
More Will Update Soon!!
