Update on Nifty levels, Bank Nifty levels, Derivative Outlook and Equity Pick of the day 1st Nov 2017
Nifty 10335 /Sensex 33213/ Bank Nifty 25019
17 Advances / 32 Declines/ 1 Unchanged
Benchmarks end choppy trade with marginal losses
Indian equity benchmarks ended the sluggish day of trade with marginal losses on Tuesday, as traders remained cautious with a report from domestic rating agency Care Ratings, which said that employment generation has not kept pace with GDP expansion and termed it as a ‘major concern’. Such a scenario calls for proactive measures from government and the recent infrastructure building efforts will help, it noted and said that employment growth has not kept pace with economic growth. Traders overlooked report that the government has extended the last dates of filing GSTR-2 and GSTR-3. The last date for filing of GSTR-2 for the month of July, 2017 is 31st October, 2017, while the last date for filing of GSTR-3 for the month of July, 2017 stands extended to 11th December, 2017. Besides, Finance Secretary Ashok Lavasa statement that India’s fiscal deficit is on the path of recovery, with showing an ease of about 90 percent of the budget estimate for the full year at the end of September from the level of 96.1 percent at the end of August, too failed to provide support.
However, losses remained capped with SBI Research in its latest report accessing that Indian economy is likely to improve to 6 percent in the second quarter of the current fiscal year 2017-18, as against 5.7 percent growth in the first quarter of FY18. It also said that Q2 growth might be in the lower end of 6-6.5 percent band with an upward bias. Traders also took some comfort with report that India is expecting a significant improvement in ranking in the World Bank's ease of doing business index on the back of several steps taken by the government like bankruptcy law and host of other reforms. Traders also got some solace with few foreign investment banks, who have started revising upwards their targets for the benchmark indices on the back of bank recapitalisation programme, infrastructure push and continued inflow of domestic savings into equities and said that best is yet to come for Sensex and Nifty.
On the global front, European counters were trading in green in early deals amid muted trading as Germany’s stock market was closed for a holiday. Euro zone inflation slowed in October, coming in below expectations and edging slightly further away from the European Central Bank’s target. Asian markets exhibited mixed trend, as China’s official manufacturing PMI for October missed economists’ expectations and the Bank of Japan kept its monetary policy steady, as widely expected.
Back home, stocks related to real estate space edged higher on report that real estate investment in India’s six major cities doubled to $2.87 billion in the year ended June 2017 as Mumbai attracted maximum capital and was ranked 81st globally. These six cities were able to attract capital because of strong economic drivers, acceleration in reforms, high yields and rapidly modernizing business base. Mixed reactions were displayed in cement stocks on report that cement prices in northern states of India are expected to rise on the back of rising costs brought about by a ban on the use of pet-coke in the Delhi NCR region from November 1.
FII’s Activity 31st-Oct-17
The FIIs as per Tuesday’s data were net buyers in equity and debt segments both, according to data released by the NSDL.
In equity segment, the gross buying was of Rs 5148.68 crore against gross selling of Rs 5092.79 crore. Thus, FIIs stood as net buyers of Rs 55.89 crore in equities.
In the debt segment, the gross purchase was of Rs 1903.85 crore with gross sales of Rs 1491.51 crore. Thus, FIIs stood as net buyers of Rs 412.34 crore in debt.
Now what to expect ??
Nifty Levels
Above 10400 will see more upside rally till 10450 and then to 10485---10530 mark else it could test its support level of 10250 again.
Closed below 10250 will see more downside panic in Nifty.
Trade within a range
Bank Nifty
Close above 25125 will see more upside rally till 25255 and then to 25350---25550 mark else it could test its support again.
Break and sustain below 24800 will see more downside panic till 24700 and then to 24600---24450 mark
Trade within a range
Daily Derivative Outlook 1st Nov 2017
• Nifty (Oct) futures closed at a premium of 33.20 points versus a premium of 24.80 points.
• Call writing was seen at Nifty 10700 strike and Put writing was seen at Nifty 10200 strikes.
• Maximum positions are at 10400 CE and 10000 PE.
• NIITTECH (47%), BEL (42%), POWERGRID (38%), GODREJCP (33%) and CAPF (25%) were the top gainers in terms of open interest.
• BATAINDIA (-7%), CHOLAFIN (-7%), AJANTPHARMA (-7%), WOCKPHARMA (-5%) and IOC (-5%) were the top losers in terms of open interest.
• Advance Decline ratio in F&O segment was at 2.56,
Advance (99) + Decline (119) + Unchanged (0) = 219
Derivative Idea (01-11-2017)
LICHSGFIN gain 11.50% of open interest as short build up on Tuesday’s trade. It has also breached its immediate support level on the lower side with noticeable rise in volumes.
Now what to expect??
Minor support at 600. Break and sustain below 600 will see downside panic till 570—550 mark.
625 will act as major hurdle.
Current chart pattern and derivatives data suggest that we expect further rally in coming sessions.
Trading Recommendation
Sell LICHSGFIN below 600 with stop loss of 625 for the initial target 570--550
Exide Industries - Top Pick
Exide Industries’ (Exide) Q2FY18 revenue beat estimates by 10%, surging by strong 23% YoY to INR23.7bn following strong pick up in auto OEM volumes, restocking in replacement, and growth in UPS and telecom segments within industrial.
Telecom and other infrastructure segments were also encouraging. Price hike taken in July also boosted growth.
However, the 24% YoY spike in lead prices impacted gross and EBITDA margins by 575bps and 254bps YoY, respectively.
Now what to expect??
On Daily chart, Exide Industries break and sustain above 210 will see nonstop rally till 216--225++ in weeks to come.
Looks bearish only if close below 202 marks.
Any sharp downside panic will be buying opportunity in it.
Trading Recommendation (1st Nov 2017)
Buy Exide Industries above 210 with stop loss below 202 (on a closing basis) Target 216--225.
Corporate Action
HCL Technologies Limited-Interim Dividend - Rs 2/- per Share
Hindustan Unilever Limited-Interim Dividend - Rs 8/- per Share
Hindustan Zinc Limited-Interim Dividend - Rs 2/- per Share
Indiabulls Housing Finance Limited-Interim Dividend - Rs 9 per Share
Result Today
Apollo Tyres Limited
Shriram Transport Finance Company Limited
TVS Motor Company Limited
Tech Mahindra Limited
JSW Energy Limited
Hexaware Technologies Limited
Hero MotoCorp Limited
Godrej Consumer Products Limited
More Will Update Soon!!
