Update on Nifty levels, Bank Nifty levels and Derivative Outlook of the day 2nd Jan 2018
Nifty 10435/Sensex 33812/ Bank Nifty 25318
10 Advances / 40 Declines/ 0 Unchanged
Markets start 2018 on pessimistic note; Nifty breaches 10,450 mark
First day of 2018 turned out to be a dismal day of trade for Indian equity benchmarks with frontline gauges settling with a cut of around a percent, breaching their crucial 10,450 (Nifty) and 33,900 (Sensex) levels. Key bourses made cautious start and traded lacklustre throughout the session, as traders remained concerned with fiscal deficit at the end of November breaching the target and touching 112 percent of the budget estimate for 2017-18, mainly due to lower GST collections and higher expenditure. Fiscal deficit was Rs 6.12 lakh crore during April-November 2017-18. Traders also remained concerned with government's statement that Indian economy slowed down in 2016-17, with the gross domestic product declining drastically from 8 percent in 2015-16 to 7.1 percent the next year. Sentiments also remained dampened with Finance Minister Arun Jaitley's statement that the slower economic growth reflected lower growth in the industry and the services sectors, due to a number of factors including structural, external, fiscal and monetary factors.
But selling in last leg of trade mainly played spoil sports for domestic bourses and dragged them to their intraday lows in dying hour of trade with traders turning pessimistic on report that overseas investors pulled out close to Rs 5,900 crore from domestic equities in Decemebr, with widening fiscal deficit and higher crude prices making market participants cautious on macro-economic front. In spite of December performance, foreign portfolio investors (FPIs) ended the year with a net inflow of over Rs 51,000 crore. Sentiments also weighed down on report that India’s external debt position surged by around 2.1 percent to $495.7 billion during July-September quarter (Q2 FY18), as compared to $485.8 billion reported for the end-June period. Traders shrugged off report that the government has extended by 10 days the last date for filing of final sales return GSTR-1 till January 10 under the Goods and Services Tax. Businesses with turnover of up to Rs 1.5 crore will have to file GSTR-1 for July-September by January 10, 2018, as against December 31, 2017 earlier.
On the global front, the markets in Asia and Europe remained closed on account of National holiday. Back home, select PSU banking stocks edged higher on report that the government has provided over Rs 7,500 crore of fresh equity to six stressed state-run banks in order to help them meet the prescribed regulatory capital requirement and its commitment to keep banks well-funded. Shares of select auto companies remained in focus as auto companies started declaring monthly sales numbers for December 2017. Many auto makers had offered huge year-end discounts during the month, the impact of which is to be seen on sales data later in the day. Meanwhile, shares of Anil Ambani led Reliance Group (ADAG) companies continued their upward journey in an otherwise subdued market. In past one month, Anil Ambani announced it has signed definitive binding agreements with Reliance Jio Infocomm (RJio) for sale of wireless spectrum, tower, fibre and Media Convergence Node (MCN) assets.
FII’s Activity 1st-Jan-18
The FIIs as per Monday’s data were net buyers in equity segment, while they were net sellers in debt segment, according to data released by the NSDL.
In equity segment, the gross buying was of Rs 3672.35 crore against gross selling of Rs 3139.49 crore. Thus, FIIs stood as net buyers of Rs 532.86 crore in equities.
In the debt segment, the gross purchase was of Rs 784.95 crore with gross sales of Rs 845.26 crore. Thus, FIIs stood as net sellers of Rs 60.31 crore in debt.
In the hybrid segment, there was no buying against gross selling of Rs 2.13 crore. Thus, FIIs stood as net sellers of Rs 2.13 crore in hybrid segment.
Now what to expect ??
Nifty Levels
Above 10570 will see rally till 10660---10715 else it could test its support level of 10350---10280 again.
Trade with levels only
Bank Nifty
Above 25800 will see rally till 26000---26200 else it could support test 25500 again.
Trade within a range
Daily Derivative Outlook 2nd January 2018
• Nifty (January) futures closed at a premium of 63.15 points versus a premium of 26.20 points.
• Maximum call writing was seen at Nifty 10600 strike and maximum put writing was seen at Nifty 10100 strikes.
• Maximum positions are at 11000 CE and 10300 PE.
• RNAVAL (55%), TATAPOWER (9%), PCJEWELLER (8%), BERGEPAINT (7%) and BEL (6%) were the top gainers in terms of open interest.
• HDIL (-13%), MGL (-7), COLPAL (-5%), VGUARD (-5%) and JPASSOCIAT (-4%) were the top losers in terms of open interest.
• Advance Decline ratio in F&O segment was at 0.52, Advance (74) + Decline (143) + Unchanged (0) = 217
Derivative Idea (02-01-2018)
ICICI Bank gain around 0.53% of open interest as short buildup on Friday’s trade. ICICI Bank trading around its support level of 310.50 level while RSI and MACD showing downside momentum in it.
Now what to expect??
ICICI Bank has support at 310.50 below 310.50 it can touch 303—300 and then to 295 mark in days to come else could touch its resistance level of 316.50 again.
Fresh buying can be initiated above 316.50
Current chart pattern and derivatives data suggest that we expect further panic in coming sessions.
Trading Recommendation (2nd Jan 2017)
Sell ICICI Bank below 310.50 with stop loss of 316.50 for the initial target 303.00—300.00 and then to 295.00 mark
More Will Update Soon!!
