Market Wrap: 31/10/2017 (17:00)
NSE-NF (Nov):10372 (-17; -0.16%)
(TTM PE: 26.77; Abv 2-SD of 25; TTM Q1FY18 EPS: 386;
NS: 10335; Avg PE: 20; Proj FY-18 EPS: 418; Proj Fair Value: 8360)
NSE-BNF (Nov):25072 (+5; +0.02%)
(TTM PE: 28.40; Abv 2-SD of 25; TTM Q1FY18 EPS: 881;
BNS: 25019; Avg PE: 20; Proj FY-18 EPS: 961; Proj Fair Value: 19220)
For 01/11/2017:
Key support for NF:
10330-10280
Key resistance for NF:
10450-10505
Key support for BNF:
24800-24600
Key resistance for BNF:
25150-25250
Trading Idea (Positional):
Technically, NF has to sustain over 10450 area for further rally towards
10505-10575 & 10625-10675 zone in the short term (under bullish case
scenario).
On the flip side, sustaining below 10425-10405 area, NF may fall towards
10330-10280 & 10195-10150 zone in the short term (under bear case
scenario).
Technically, BNF has to
sustain over 25150 area for further rally towards 25250-25500 & 25600 zone
in the near term (under bullish case scenario).
On the flip side,
sustaining below 25100 area, BNF may fall towards 24800-24600 & 24450-24300
area in the near term (under bear case scenario).
Indian market (Nifty Fut/India-50)
today closed around 10372, edged down by almost 17 points (-0.16%) after making
an opening session high of 10389 and mid-session low of 10350 in a day of
consolidation after making a fresh Nifty high of 10384 yesterday on hopes of
earnings recovery coupled with PSBS recap & consolidation optimism.
But Q2 earnings so far are broadly
mixed and valuations are already quite high. Also market may be concerned over
PSBS recaps mechanism as it may take significant time with various caveats and
banks may also has to take huge hair cuts on NPA settlement
Another factor is that dual
combination of a higher USD & higher Oil may be not good for import
oriented Indian economy (imported inflation); Govt’s CAD & Fiscal deficit
equation may face some headwinds as Govt may be forced to cut additional ED
imposed previously on gasoline to keep the retail price at current levels to
contain spiraling inflation, which is already at elevated levels.
As par latest data, India fiscal deficit reached almost 91.3% to
Rs.4.98 tln vs 4.48 (YOY) in Apr-Sep’17 against BE of Rs.5.47 tln. Although
fiscal deficit may have improved from around 96% (Rs.5.25 tln) mapped in
Aug’17, but it’s still significantly higher at this point of time and Govt has
to take a final call in Dec’17 for the question of fiscal discipline amid talks
of fiscal stimulus to dig out the economy from its deepest slump since 2014.
Indian market today opened around 10375, edged down amid muted global cues on concerns
about gradual cut in US corporate tax coupled with renewed US political jitters
and muted China Mfg PMI. But domestic concern for stretched valuations and lack
of any meaningful domestic triggers may have capped any gain today despite
upbeat EU cues as EUR dropped a bit on hopes of Catalan peace and muted inflation.
Today Nifty was supported by Axis Bank (buzz of 5% stake
buy-Bain Capital/PE fund), Bharti Infratel (renewed optimism about tower deal),
ONGC (higher oil), HCL Tech, Bharti Airtel (earnings optimism &
deleveraging) by around 22 points cumulatively.
Nifty was dragged by Infy (ex dividend/buy back), VEDL (lower
metal due to soft China Mfg PMI), Tata Motors (Muted response to VRS), SBI
(MCLR/lending rate cut by 0.05%) and L&T by around 27 points altogether.
Overall, Indian market was today helped by property
developers/reality, private banks, FMCG and mixed financials, while it was
dragged by PSBS, automobiles, metals, techs, media stocks; Nifty gained by
around 5.6% for Oct’17, its biggest monthly gain after Govt proposal of PSBS
recaps through special bonds.
India jumped 30 points to 100 in World Bank ranking of ease of doing business on
various structural reforms, especially IBC act; enforcing contracts, tax
compliances, although this is certainly a great achievement, ground reality may
be different due to over regulations in various fields such as GST, property
transactions and starting a business.
Europe Set To Trade Almost Flat On Muted Global Cues Amid US Tax Reform & Political Jitters And China Concern
Asia Edged Down On Lower USD Amid US Tax Reform Squabbling, Renewed Political Jitters & Concern For A Dovish Fed Coupled With China Concern
USD Caught A Bid On Trump's Comments & Preference About " No Phase-in" For US Corp Tax Cut
SGX-NF
BNF
USDJPY
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