Update on Nifty levels, Bank Nifty levels, Derivative Outlook and Equity Pick of the day 3rd Nov 2017
Nifty 10423 /Sensex 33/ Bank Nifty 25019
22 Advances / 28 Declines/ 0 Unchanged
Benchmarks end choppy trade with marginal losses
Indian equity benchmarks ended the volatile session of trade with marginal losses on Thursday, as traders opted to book some profit with key indices touching the all-time high, amid weak global cues. Markets traded cautiously throughout the day, as traders remained on sidelines awaiting the formal nomination of the next head of the central bank. However, losses remained capped as traders took some solace with private report stating that India’s current account deficit (CAD) for this financial year is expected to be around $ 40 billion, or 1.5 per cent of GDP. CAD rose sharply to $ 14.3 billion, 2.4 per cent of GDP, at the end of first quarter of 2017-18. Report highlighted that July-September CAD is expected at about 1.6% of GDP and accordingly, CAD for the first half of this fiscal (April- September) is likely to be around 2% of GDP.
Traders also took some comfort with Former Economic Affairs Secretary Shaktikanta Das’ statement that improvement in ease of doing business is extremely relevant and will promote private investment, growth and job creation. Separately, after a record jump of 30 places in the World Bank’s ease of doing business ranking, India is gearing up to leapfrog into the top 50 with around 90 specific reforms lined up for various ministries. The reforms covering seven ministries are to be implemented by May next year with a focus on reducing the number of processes and moving them online. The maximum improvements targeted are in the areas of construction permits (22) and registering property (14), areas where India still has a low rank.
Weakness in global markets dampened sentiments with European counters making sluggish start, as investors waited for the latest rate decision from the Bank of England (BOE). Manufacturers in the euro zone had their strongest month since early 2011 in October as factories struggled to meet booming demand despite adding staff at the fastest rate in at least 20 years. Asian markets closed mostly in red. China will lower tariffs and step up bank financing to support more imports as the country’s massive trade surplus has a negative impact on its citizens.
Back home, investors took note that the government may nudge cash surplus central public sector enterprises (CPSEs) to invest in the proposed Rs 1.35 lakh crore bond offering to recapitalize public sector banks. On the sectoral front, Pharma stocks emerged as a dark horse due to attractive valuations and expectation of faster USFDA approvals for plants. However, PSU banking stocks remained under pressure, despite report that the government in a bid to push consolidation among state run lenders has said that the alternative Mechanism headed by finance minister Arun Jaitley may also direct banks to examine proposals for amalgamation. Steel stocks too lost sheen despite report that the Union Steel Minister Chaudhary Birender Singh has called for coastal shipping of steel products to boost growth of the sector.
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
Above 10490 will see more upside rally till 10540 and then to 10600---10650 mark else it could test its support level of 10345 again.
Closed below 10345 will see more downside panic in Nifty.
Trade within a range
Bank Nifty
Close above 25610 will see more upside rally till 25650 and then to 25730---25850 mark else it could test its support again.
Break and sustain below 25250 will see more downside panic till 25000 and then to 24900---24800 mark
Trade within a range
Daily Derivative Outlook 3rd Nov 2017
• Nifty (Oct) futures closed at a Premium of 31.20 points versus a premium of 36.80 points.
• Call writing was seen at Nifty 10600 strike and Put writing was seen at Nifty 10200 strikes.
• Maximum positions are at 10500 CE and 10000 PE.
• HEXAWARE (47%), BERGERPAINT (17%), CANBK (15%), TITAN (11%) and PIDILITIND (10%) were the top gainers in terms of open interest.
• VGUARD (-11%), SRTRANSFIN (-11%), DALMIABHA (-10%), WOCKPHARMA (-10%) and HDIL (-9%) were the top losers in terms of open interest.
• Advance Decline ratio in F&O segment was at 2.56, Advance (86) + Decline (132) + Unchanged (0) = 218
Derivative Idea (02-11-2017)
Castrol gain 5.72% of open interest as long build up on Thursday trade. It is trading near its resistance level of 415, while on daily chart SBIN formed squat bar.
Now what to expect??
Break and sustain above 415 will see upside rally till 425---430 and then to 435+++ mark.
405 will act as major support.
Current chart pattern and derivatives data suggest that we expect further rally in coming sessions.
Trading Recommendation (3rd Nov 2017)
Buy Castrol above 415 with stop loss of 405 for the initial target 425—430++
Granules India Limited- Top Pick
On Daily chart, Granules India Limited... Break and sustain above 144 will see nonstop rally till 150++ in weeks to come.
Looks bearish only if close below 138 marks.
Any sharp downside panic will be buying opportunity in it.
Trading Recommendation (3rd Nov 2017)
Buy Granules India above 144 with stop loss below 138 (on a closing basis) Target 150++.
Corporate Action
Exide Industries Limited-Interim Dividend - Rs 1.60 per Share
Oil & Natural Gas Corporation Limited-Interim Dividend - Rs 3/- per Share (Purpose Revised)
Result Today
Hindalco Industries Limited
Torrent Pharmaceuticals Limited
Titan Company Limited
Tata Power Company Limited
Union Bank of India
Punjab National Bank
Power Finance Corporation Limited
More Will Update Soon!!
