Update on Nifty levels, Bank Nifty levels, Derivative Outlook and Equity Pick of the day 14th Dec 2017
Nifty 10192 /Sensex 33053/ Bank Nifty 25000
16 Advances / 34 Declines/ 0 Unchanged
Late hour sell-off drag benchmarks lower for second straight session
Extending previous session butchery, Indian equity benchmarks once again ended the session with a cut of around half a percent, breaching their crucial 10,200 (Nifty) and 33,100 (Sensex) levels. Markets started the session on pessimistic note with traders reacting negatively to the macro economic data. Sentiments remained dampened after the industrial production growth hit a three-month low of 2.2% in October this year, mainly due to subdued performance of manufacturing and mining sectors coupled with a contraction in output of consumer durables. The IIP grew 4.14% in September this year. Industrial output rose by a meager 2.5% in April-October this fiscal as compared to 5.5% in the same period of 2016-17. Moreover, consumer inflation rose to 4.88% in November from 3.58% in October and 3.63% in the year earlier, exceeded the RBI’s forecast of 4.2-4.6% for the second half of the year. The higher-than-expected retail inflation effectively rules out any rate cuts in the near future by the Reserve Bank of India even as industrial growth remains muted.
However, markets took U-turn and entered into green terrain with traders taking support with a private survey report, stating that India is the third most optimistic nation in hiring intentions as 22% of employers are expected to add more staff in the next three months. It further said that workforce gains were expected across all seven industry sectors monitored and in all four regions. Another private report enlightened that the gap between China and India’s prosperity has narrowed by four ranks since 2016 and to a quarter of what it was in 2012. The upward trend in India’s prosperity is significant in view of the fact that India registered lower gross domestic product (GDP) growth following demonetization and implementation of the GST reform in 2017. But sharp selloff in final hour of trade dragged markets back into negative terrain, as traders opted to book profit at higher levels ahead of Wholesale Price Index (WPI) data to be released tomorrow. Sentiments also weighed down on report that Asian Development Bank (ADB) scaled down its current fiscal year GDP growth forecast for India to 6.7% from prior estimate of 7%.
Weakness in European counters too dampened sentiments with CAC, DAX and FTSE trading lower, as investors awaited the outcome of the US Federal Reserve's two-day policy meeting. However, Asian markets were trading in green.
Back home, tourism and hotel stocks remained in focus on a tourism ministry report that more than 10 lakh foreign tourists visited India in November 2017, a rise of 14.4% over the same period last year. FTAs during the period between January and November this year were 90.01 lakh, with a growth of 15.6% over the same period the previous year. Select cement companies like Kakatiya Cements Sugar & Industries, Burnpur Cement, Prism Cement, Heidelberg Cement India, JK Lakshmi Cement, Shree Cement, Mangalam Cement and JK Cements closed in green on reports that the Supreme Court eased petcoke ban for cement companies. The Supreme Court allowed the cement industry to use petcoke as a feedstock, which had been banned last month to clean up the air in Delhi and its neighbouring states.
FII’s Activity 13th-Dec-17
The FIIs/DIIs as per Wednesday data were net sellers in equity segment, while they were net sellers in debt segment, according to data released by the NSDL.
In the debt segment, the gross purchase was of Rs 5335.71 crore with gross sales of Rs 5914.36 crore. Thus, FIIs stood as net sellers of Rs 578.65 crore in debt.
In equity segment, the gross buying was of Rs 3493.61 crore against gross selling of Rs 3610.09 crore. Thus, DIIs stood as net sellers of Rs 116.48 crore in equities.
Fed raises rates. sticks to 3 hikes outlook for 2018
The 7-2 vote for the rate move, the Fed’s third this year, raises the benchmark lending rate by a quarter percentage point to a target range of 1.25 percent to 1.5 percent. Adding to policy tightening, the Fed also confirmed that monthly roll-offs from the central bank’s balance sheet would step up, as scheduled, to $20 billion from $10 billion beginning in January.
Federal Reserve officials followed through on an expected interest-rate increase and raised their forecast for economic growth in 2018, even as they stuck with a projection for three hikes in the coming year.
“Averaging through hurricane-related fluctuations, job gains have been solid, and the unemployment rate declined further,” the Federal Open Market Committee said in a statement Wednesday following a two-day meeting in Washington. Inflation will remain below the Fed’s 2 percent goal in the near term but “stabilize” around the target in the medium term, the central bank said.
In a key change to the statement, the Fed omitted prior language saying it expected the labor market would strengthen further. Instead, Wednesday’s missive said monetary policy would help the labor market “remain strong.” That suggests Fed officials expect improvement in the job market to slow.
Through the policy adjustments and the statement, the Fed continued to seek a delicate balance between responding to positive news on growth and unemployment that encouraged gradual tightening, while signaling caution due to persistently weak inflation readings that have befuddled policy makers.
That puzzle continued earlier Wednesday when Labor Department data showed consumer inflation, excluding food and energy, was lower than expected at 1.7 percent in the 12 months through November.
In the latest set of quarterly forecasts released Wednesday, the median estimate for economic growth next year jumped to 2.5 percent from 2.1 percent. It wasn’t immediately clear how much of the change reflected confidence that the tax-cut legislation moving through Congress will boost growth, or other factors such as pickups in business spending and global growth.
At the same time, the committee’s median forecast for long-run expansion was unchanged at 1.8 percent, suggesting officials aren’t yet convinced the tax package will significantly affect the economy’s capacity for growth. (Bloomberg)
SEBI plans to cut IPO approval time by half
India’s stock market regulator plans to cut the time taken for approving initial public offerings by half from about three months now and also ease the listing process.
“We have agreed in consultation with officers that initial comments will come in two weeks’ time and then final comments in a week,” Securities and Exchange Board of India Chairman Ajay Tyagi said on the sidelines of an investment banking summit in Mumbai. That compares with 30 days taken for initial observations and another 60 for the final nod now, given that companies submit required documents.
SEBI is also looking to further reduce the time taken to list a company, Tyagi said. It takes six days to list on exchanges after the IPO closes.
So far this year, 33 companies have raised about Rs 66,000 crore from the primary markets, the highest on record. “Around 20,000 crore worth of IPOs are still remaining with us for final comments,” said Tyagi. (Bloomberg)
Now what to expect ??
Nifty Levels
Below 10190 will see panic till 10120---10050. More and more downside panic will see only close below 10050 else it could test 10370 again.
Trade within a range
Bank Nifty
Below 24960 will see panic till 24800---24650.
More and more downside panic will see only close below 24650 else it could test 25400 again.
Trade within a range
Daily Derivative Outlook 14th December 2017
• Nifty (Dec) futures closed at a premium of 22.25 points versus a premium of 24.35 points.
• Maximum call writing was seen at Nifty 10500 strike and Maximum Put buying was seen at Nifty 10000 strikes.
• Maximum positions are at 10500 CE and 10000 PE.
• MUTHOOTFIN (17%), PIDILITIND (13%), HEXAWARE (13%), DISHTV (10%) and INDIGO (7%) were the top gainers in terms of open interest.
• OIL (-10%), PCJEWELLER (-9%), INDIANB (-8%), MCX (-8%) and CHOLAFIN (-7%) were the top losers in terms of open interest.
• Advance Decline ratio in F&O segment was at 0.24, Advance (41) + Decline (174) + Unchanged (2) = 217
Derivative Idea (14-12-2017)
Adani Enterprise losses around 3.20% of open interest as long Unwinding on Wednesday’s trade. Adani Enterprise trading near its support level of 146.00
Now what to expect??
Below 146, panic remain continue till 135--132 and then to 125 mark.
Hurdle at 155.50
Current chart pattern and derivatives data suggest that we expect further panic in coming sessions.
Trading Recommendation (14th Dec 2017)
Sell Adani Enterprise below 146 with stop loss of 155.50 for the initial target 135-132 and then to 125 mark.
STAR - Top Pick
Price just got below its 20-day simple moving average which is a negative signal. According to simple moving average analysis, star is in a strong downtrend.
By this time of the day, a total of 251,992 shares were traded with the 5 day average volume being 389,228 , 10 day average volume being 610,243 and 30 day average volume being 577,430 .Compared to the previous day the 5 day average volume fell 42822 stocks, 10 day average volume rose 80606 stocks and 30 day average volume fell 28585 stocks.
Now what to expect???
Below 796 will see panic till 777—765 in days to come. Further downside will see if closes below 765.
Resistance intact at 815
Any sharp downside rally will be buying opportunity in it.
Trading Recommendation (14th Dec 2017)
Sell STAR below 796 with stop loss above 815 (on a closing basis) Target 777—765.
More Will Update Soon!!
