Update on Nifty levels, Bank Nifty levels, Derivative Outlook and Equity Pick of the day 6th Nov 2017
Nifty 10452 /Sensex 33685/ Bank Nifty 25650
21 Advances / 28 Declines/ 0 Unchanged
Markets hit fresh record highs on Friday
Friday turned out to be a fabulous day of trade for Indian equity benchmarks where Nifty and Sensex once again scaled fresh record highs and ended above 10,450 and 33,600 levels, respectively. Despite some initial volatility, markets gained momentum and traded jubilantly throughout the session, as sentiments remained up-beat with the government’s statement that it has approved foreign direct investment (FDI) proposals worth Rs 24.56 crore, including one from Sterling Commerce Solutions India. Markets extended their northward journey mainly after the Nikkei India Services Purchasing Managers’ Index rose to 51.7 in October from September’s 50.7 due to greater inflows of new business. The report enlightened that service providers retained an optimistic outlook regarding business activity over the coming 12 months, while the labor market was further reinforced as firms raised their payroll numbers over the month.
Traders also took some comfort with Prime Minister Narendra Modi’s statement that starting business in India is easier than ever before as procedures have been simplified, archaic laws repealed and compliance requirements reduced. Meanwhile, responsible or sustainable investment in India is at a niche stage as assets deployed under this strategy amount to nearly $31 billion, while globally it stood at a whopping $22.89 trillion. Adding to the optimism, former RBI governor Raghuram Rajan termed the government’s announcement to infuse Rs 2.11 lakh crore in PSU banks as good news saying it is important for banks to have capital for lending going forward. He added that public sector banking system is a big part of Indian system and it is about 70%. Investors took note of the Reserve Bank of India (RBI) statement that corporate borrowers who fail to get a Legal Entity Identifier (LEI) number from banks won’t be given credit. The schedule for getting the LEI number is spread out till December 2019 and depends on exposure.
Positive opening in European counters too aided sentiments with CAC, DAX and FTSE trading in green in early deals, as investors monitored a fresh batch of corporate earnings. Asian markets ended mostly in green, as sentiments remained up-beat with the release of US tax reform bill as well as the announcement of Jerome Powell as the next Federal Reserve Chair.
Back home, auto stocks remained in top gear on report that domestic commercial vehicle sales seems to be back on track since July 2017, driven by pent-up demand post-GST, healthy replacement-led demand, especially in the tractor trailer segment owing to stricter implementation of CMVR regulations and pick-up in construction and mining activity, driving demand for tipper trucks. Aviation stocks flies higher with report that the government is developing a comprehensive 25-year master plan for airports in the country to keep pace with air traffic growth. Select stocks from IT space remained on buyers’ radar with Nasscom’s president R Chandrashekhar’s statement that India’s IT industry could see an upturn next year as the process of investments in technology, particularly in the United States, has started to gather momentum.
FII’s Activity 3rd-Nov-17
The FIIs as per Friday’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 5921.01 crore against gross selling of Rs 4383.88 crore. Thus, FIIs stood as net buyers of Rs 1537.13 crore in equities.
In the debt segment, the gross purchase was of Rs 1215.22 crore with gross sales of Rs 605.62 crore. Thus, FIIs stood as net buyers of Rs 609.60 crore in debt.
Now what to expect ??
Nifty Levels
Above 10500 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
We clearly indicated Bank nifty looks bullish above 10610 level marks, its flared and made a high of 10688 and hit our initial targets.
Now what to expect???
Above 25700 will see more upside rally till 25850 and then to 26000+++ mark else it could test its support again.
Break and sustain below 25400 will see more downside panic till 25250 and then to 25000---24900 mark
Trading Recommendation (6th Nov 2017)
Buy Jain Irrigation above 110 with stop loss below 105 (on a closing basis) Target 115---120.
Daily Derivative Outlook 5th Nov 2017
• Nifty (Oct) futures closed at a Premium of 34.30 points versus a premium of 31.20 points.
• Call writing was seen at Nifty 10800 strike and Put writing was seen at Nifty 10000 strikes.
• Maximum positions are at 10500 CE and 10000 PE.
• TORNTPHARM (67%), ARVIND (28%), UBL (24%), UJJIVAN (20%) and PAGEIND (14%) were the top gainers in terms of open interest.
• BERGERPAINT (-11%), HEXAWARE (-10%), JUSTDIAL (-8%), BIOCON (-7%) and DIVISLAB (-6%) were the top losers in terms of open interest.
• Advance Decline ratio in F&O segment was at 1.12, Advance (115) + Decline (103) + Unchanged (0) = 218
Derivative Idea (05-11-2017)
Engineers India gain 11.50% of open interest as long build up on Friday’s trade. It is trading above its resistance level of 190, while on daily chart SBIN formed squat bar.
Now what to expect???
Minor Hurdle at 195...Break and sustain above 195 will take it to 205—208 and then to 215+++ mark.
180 will act as major support.
Current chart pattern and derivatives data suggest that we expect further rally in coming sessions.
Trading Recommendation (6th Nov 2017)
Buy Engineers India above 195 with stop loss of 180 for the initial target 205—208 and then to 215++
Corporate Action
Marico Limited- Interim Dividend - Rs 1.75 per Share (Purpose Revised)
Result Today
Century Textiles & Industries Limited
Torrent Power Limited
Petronet LNG Limited
Rural Electrification Corporation Limited
Piramal Enterprises Limited
Just Dial Limited
Indian Bank
More Will Update Soon!!
