Friday, 24 November 2017

Nifty Consolidates Amid China Carnage But Well Off The Day Low On Unconfirmed Buzz Of An Imminent S&P Upgrade For India (?)



Market Wrap: 23/11/2017 (17:00)

NSE-NF (Nov):10370 (+12; +0.12%) 

(TTM PE: 26.40; Abv 2-SD of 25; TTM Q1FY18 EPS: 392; NS: 1049; Avg PE: 20; Proj FY-18 EPS: 418; Proj Fair Value: 8360)

NSE-BNF (Nov):25788 (-5; -0.02%) 

(TTM PE: 29.31; Near 3-SD of 30; TTM Q1FY18 EPS: 878; BNS: 25736; Avg PE: 20; Proj FY-18 EPS: 961; Proj Fair Value: 19220)

For 24/11/2017: 

Key support for NF: 10340/10305-10270

Key resistance for NF: 10395/10415-10460

Key support for BNF: 25700-25450

Key resistance for BNF: 25800-26000

Trading Idea (Positional):

Technically, Nifty Fut-Nov (NF) has to sustain over 10415 area for further rally towards 10460- 10500/10535 & 10575-10675 zone in the short term (under bullish case scenario). 

On the flip side, sustaining below 10395 area, NF may fall towards 10340/10305-10270 & 10220/10190-10150 zone in the short term (under bear case scenario).

Technically, Bank Nifty-Fut (BNF) has to sustain over 26000 area for further rally towards 26100-26325 & 26400-26675 zone in the near term (under bullish case scenario).

On the flip side, sustaining below 25950-25800 area, BNF may fall towards 25700-25450 & 25200-24950 area in the near term (under bear case scenario).

Indian market (Nifty Fut/India-50) today closed around 10370, inched up by almost 12 points (+0.12%) after making an opening minute high of 10389 and mid day panic low of 10310 on China carnage. 

But market recovered soon following some stability in the regional market (HK) and coupled with that, final shape of IBC amendment and some unconfirmed market buzz that S&P may upgrade India as soon as tomorrow (Friday) may have boosted the sentiment and Nifty edged higher.

Indian market today opened around 10368, edged up on subduedglobal/Asian cues in a holiday thinned market after USD plunged on dovish FOMC minutes yesterday coupled with overall suspense about US corp tax cut; a lower USD is not good for export heavy Asian & EU markets, although it may be good for US market.

Asian market also came into renewed pressure today on China’s clampdown on its micro/online lenders amid ongoing deleveraging push and war against shadow banking; China’s bond yield surged again above 4% and market plunged over 2% as investors rush to unwind the huge equity position on margin money (excessive leverage). The China plunge has affected the regional as well as global risk-on sentiment including Indian market today.

Surging oil (WTI) eyeing almost $60 may be another serious headwind for the Indian market on concern of CAD/fiscal deficit and other macros; but any meaningful dips in USD on dovish Fed in 2018 may be also helpful in this aspect, although that may not be helpful for the much elusive Nifty earnings recovery as its also now a export heavy index like its Asian peers to some extent.

Looking ahead, Indian market may focus on GDP, RBI, various new provisions of the IBC act to gauze the overall effect on quick NPA resolution and resumption of private capex/investment, S&P rating review scheduled on Friday (24th Nov) and GJ election.

Today Nifty was helped by RIL, Infy (buzz that current interim CEO Rao will continue as permanent CEO), Eicher Motors, Sun Pharma, HPCL, Indusind Bank, Yes Bank (BSE Sensex & MSCI World inclusion), HCL Tech, Axis Bank & Power Grid by cumulatively around 88 points; RIL & Infy duo contributed almost 56 points alone.

Nifty was dragged by HDFC Bank, HDFC, Adani Ports, L&T, IBULLS HSG, Tata Motors, Asian Paints, Bajaj Auto, DRL (launch of a blockbuster product by a US based competitor) & Maruti by almost 63 points altogether.

Overall today Indian market was helped by techs, media, mixed healthcare & private banks, energy producers (higher oil), while dragged by PSBS/selected private banks, auto, financials, metals, consumer staples/FMCG, infra & MNC (lower USD) to some extent.




SGX-NF


BNF


EURUSD

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