Update on Nifty levels, Bank Nifty levels, Derivative Outlook and Equity Pick of the day 2nd Nov 2017
Nifty 10440 /Sensex 33213/ Bank Nifty 25019
29 Advances / 21 Declines/ Unchanged
Bulls continue to roar on Dalal Street; Nifty surpasses 10,400 mark
Wednesday turned out to be a remarkable day of trade for Indian equity benchmarks where bulls tightened their grip on Dalal Street, with Nifty and Sensex hitting fresh record highs and ending above their crucial 10,400 and 33,600 levels, respectively. The market mood remained up-beat through the day and benchmarks fervently gained strength to strength, as investors continued hunt for fundamentally strong stocks. Key gauges made a gap-up opening on report that India’s ranking in the World Bank ease of doing business survey for 2018 climbed to record 30 notches to 100, as a range of regulatory and policy reforms put in place by the Union and state governments over the past four years started delivering results. The survey also recognized India as one of the top five reformers in this year’s assessment. Finance minister Arun Jaitley has said the target of making it to the top 50 countries in the Doing Business ranking now seems doable. Apart from the World Bank report, the markets were also lifted by firm opening in European markets. Further support also came with Department of Industrial Policy and Promotion (DIPP) secretary Ramesh Abhishek’s statement that the government is working with the World Bank to recognise over 200 reforms that will help propel India into the top-50 bracket in ease of doing business.
Domestic bourses continued to move northward till end at all time high levels, with up-beat economic data also providing strength. The Core sector growth hit a six-month high in September. The index of eight core industries was up 5.2% in September, compared with 4.4% in August and 5.3% in September last year. Also, fiscal deficit improved to 91.3% of the budget estimate at the end of September from 96.1% at the end of August as revenues picked up pace. Fiscal deficit is pegged at Rs 4.99 lakh crore at the end of September, down about Rs 26,000 crore from August as second instalment of corporate taxes allowed revenue to exceed spending in the month. The markets participants paid no heed towards the report that growth in India’s manufacturing sector lost momentum in October month. The Nikkei India Manufacturing Purchasing Managers’ Index fell from 51.2 in September to 50.3 in October.
Global cues too remained supportive with European markets making a firm start, despite a terrorist attack in New York, as investors focused on earnings reports. The UK manufacturing sector continued to expand at a solid pace at the start of the fourth quarter. Asian markets ended mostly in green terrain on Wednesday. Soaring memory chip sales helped South Korea exports record 12 consecutive months of growth in October, evidence Asia’s fourth largest economy is stepping up a gear.
Back home, investors took note that India could review the application of the highest 28% slab under the Goods and services Tax (GST) and consider imposing a lower rate on items of frequent use. Items in the 28% slab include washing machines, refrigerators, electrical fittings, cement, ceiling fans, watches, automobiles, tobacco products, nutritional drinks, auto parts, plastic furniture and plywood. Some of the goods placed in that bracket are manufactured by MSMEs and they are feeling some pressure. On the sectoral front, banking stocks remained in focus, as the Country’s largest lender, State Bank of India has announced a cut in marginal cost-based lending rates (MCLR) across maturities by 5 basis points.
FII’s Activity 2nd-Nov-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 6307.20 crore against gross selling of Rs 6362.29 crore. Thus, FIIs stood as net sellers of Rs 55.09 crore in equities.
In the debt segment, the gross purchase was of Rs 3161.37 crore with gross sales of Rs 1397.83 crore. Thus, FIIs stood as net buyers of Rs 1763.54 crore in debt.
Now what to expect ??
Nifty Levels
We clearly indicated nifty looks bullish above 10400 level marks, its flared and made a high of 10489 and hit our initial two targets.
Now what to expect???
Above 10500 will see more upside rally till 10588 and then to 10630---10700 mark else it could test its support level of 10345 gain.
Closed below 10345 will see more downside panic in Nifty.
Trade within a range
Bank Nifty
Close above 25580 will see more upside rally till 25650 and then to 25755---25900 mark else it could test its support again.
Break and sustain below 25000 will see more downside panic till 24900 and then to 24800---24700 mark
Trade within a range
Daily Derivative Outlook 2nd Nov 2017
• Nifty (Oct) futures closed at a Premium of 36.80 points versus a premium of 33.20 points.
• Call writing was seen at Nifty 10700 strike and Put writing was seen at Nifty 10400 strikes.
• Maximum positions are at 10500 CE and 10000 PE.
• VGUARD (32%), HEXAWARE (32%), ESCORTS (21%), CHOLAFIN (19%) and POWERGRID (16%) were the top gainers in terms of open interest.
• CONCOR (-19%), NIITTECH (-18%), INDIGO (-17%), DLF (-12%) and HDFC (-10%) were the top losers in terms of open interest.
• Advance Decline ratio in F&O segment was at 2.56, Advance (132) + Decline (86) + Unchanged (0) = 218
Derivative Idea (02-11-2017)
SBIN losses 1.70% of open interest as unwinding up on Wednesday’s trade. It is trading near its resistance level of 322, while on daily chart SBIN formed squat bar.
Now what to expect???
Break and sustain above 323 will see upside rally till 335-340 and then to 345++mark.
310 will act as major support.
Current chart pattern and derivatives data suggest that we expect further rally in coming sessions.
Trading Recommendation (2nd Nov 2017)
Buy SBIN above 323 with stop loss of 310 for the initial target 335--340
CG Power - Top Pick
According to RSI& MACD analysis, CG Power is technically strong..
As the trading hours came to an end CG Power and Industrial Solutions was observed to be priced at Rs. 86.6 which was 3.6 points higher than the day's low and 0.7 points lower than the day's high while the day low was Rs. 83 and day high was Rs. 87.3 .
With this, 4,403,504 stocks were traded while the 5 day, 10day & 30 day average volumes were observed to be 2,326,254 , 1,969,459 , and 2,234,776 respectively.
Compared to the previous day the 5 day average volume rose 437567 stocks, 10 day average volume fell 124258 stocks and 30 day average volume fell 6039 stocks.
The price went up to as much as Rs. 97.40 and went down as low as Rs. 55.60 in the last 52 weeks.
Now what to expect??
On Daily chart, CG Power break and sustain above 88 will see nonstop rally till 93--93++ in weeks to come.
Looks bearish only if close below 83 marks.
Any sharp downside panic will be buying opportunity in it.
Trading Recommendation (1st Nov 2017)
Buy CG Power Cash above 88 with stop loss below 83 (on a closing basis) Target 93--96.
Corporate Action
MindTree Limited-Interim dividend - Rs 2/- per share/ special dividend rs 2/- per share (purpose revised)
ICICI Prudential Life Insurance Company Limited-Interim dividend - RS 2.30 per share/ special dividend rs 1.10 per share (purpose revised)
Result Today
Andhra Bank
Vedanta Limited
Ujjivan Financial Services Limited
Power Grid Corporation of India Limited
The Ramco Cements Limited
Hindustan Construction Company Limited
Glenmark Pharmaceuticals Limited
Berger Paints (I) Limited
More Will Update Soon!!
