Market Wrap: 14/11/2017 (17:00)
NSE-NF (Nov):10231 (-38; -0.37%)
(TTM PE: 25.99; Abv 2-SD of 25; TTM Q1FY18 EPS: 392;
NS: 10187; Avg PE: 20; Proj FY-18 EPS: 418; Proj Fair Value: 8360)
NSE-BNF (Nov):25402 (-62; -0.24%)
(TTM PE: 28.80; Near 3-SD of 30; TTM Q1FY18 EPS:
878; BNS: 25285; Avg PE: 20; Proj FY-18 EPS: 961; Proj Fair Value: 19220)
For 15/11/2017:
Key support for NF: 10195-10175/10145
Key resistance for NF: 10280-10320/10360
Key support for BNF: 25300-25100
Key resistance for BNF:
25650-25750
Trading Idea (Positional):
Technically, Nifty
Fut-Nov (NF) has to sustain over
10320 area for further rally towards 10360-10400 & 10475-10535 zone in the
short term (under bullish case scenario).
On the flip side, sustaining below 10300-10280 area, NF may fall towards 10225/10195-10175/10145
& 10100-9970 zone in the short term (under bear case scenario).
Technically, Bank Nifty-Fut (BNF) has to sustain over 25550 area for further rally towards 25650-25750
& 25825-25950 zone in the near term (under bullish case scenario).
On the flip side,
sustaining below 25500 area, BNF may fall towards 25300-25100 & 24950-24700
area in the near term (under bear case scenario).
Indian market (Nifty Fut/India-50)
today (14th Sep) closed around 10231, tumbled by 38 points (-0.37%)
after making an opening session high of 10278 and a late session low of 10225.
Indian market today opened almost flat on subdued global cues tracking ongoing US
tax reform suspense, UK political jitters & Brexit uncertainty, miss in
China data and surging bond yields in China.
But after opening almost flat and attempting some recovery,
Nifty plunged again after 1% surge in WPI for Oct, which came at 3.59% vs est
3.01%; prior: 2.60%; this is at 6 months high and may further force RBI to not
only be on the neutral side, but may also prompt for more hawkish tone to
telegraph the market for future rate hikes in line with global central banks (QT).
Indian market may be also concerned about fears of stagflation for the economy (higher
inflation & lower growth). USDINR-I was trading around 65.65, edged up by
almost 0.14% after the WPI data and 10YGSEC (Indian Bond) yields also surged
over 7% in another milestone high on hopes of a hawkish RBI and concerns for
higher fiscal deficit on surging oil & high probable fall in GST revenue
after weekend recalibrations of tax rates.
Market may be also concerned about further rationalization of
GST rates and its short term disruptive impact on trade & tax
revenue/fiscal deficit.
After market hours today Indian
trade data for Oct also came subdued; export came as 23.10B vs 28.61B;
import at 37.12b VS 37.60B and net trade deficit at -14.02B vs est -10.4B;
prior: -8.98B.(YOY:11.13)
Thus, on MOM basis, export plunged by around 19.25% and import
edged down by around 1.28%, while on YOY basis export fell by 1.1% and import
rose by 7.6%; In Sep’17, Indian exports surged by 25.7% on YOY basis, quite
unusually, may be because of over invoicing by the exporters to claim tax
credit under new GST (ITC).
The Oct trade data & muted export figure may again worry
Indian policy makers amid ongoing debate about GST & DeMo blues on the
overall economic activity. Export fell for the first time in the last 15
months, while higher crude & metals has inflated the import bill, causing
trade deficit to jump significantly, which is also bad for the overall fiscal
balance of the country. Huge fall in gems & jewellery by almost 24.5% on
YOY basis may be indicating the adverse effect of DeMo & GST.
Overall, Indian market was under pressure on concern of fiscal
health (deficit) as a result of higher oil & higher USD coupled with
revenue loss due to recalibration of GST and mixed/muted Q2 earnings so far,
which may not justify the current stretched valuation of the market. Also,
Govt’s “war on black money/shell cos” may be affecting the overall market
sentiment, even if the anti-corruption stance of the Govt is correct morally
& ethically.
Banks (PSBS) were under renewed pressure today for surge in
Indian bond yields as MTM loss on the bond portfolio of the PSBS has increased
significantly, which may also impact the Q3/Q4 earnings, if bond prices do not
recover.
Today Nifty was helped by RIL, Bajaj Fin, Axis Bank (fund raising & stake sale to
Bain Capital/LIC), Hero Motors and M&M by around 13 points altogether.
Nifty was dragged by IOC, L&T, TCS, Bharti Infratel (stake sale by Bharti Airtel
at below CMP), VEDL, ITC, HDFC, HPCL, Eicher Motors (muted earnings),Tata
Motors by around 40 points cumulatively.
Overall, Indian market today was helped by Automakers, property
developers/reality, consumption stocks (GST optimism) & mixed energies,
while it was dragged by banks & financials, FMCG, techs, media, metals
(muted China data), healthcare/pharma, commodities, PSU, CPSE.
Meanwhile, Crude Oil
(WTI) is now trading around 56.45, down by almost 0.55% on subdued oil demand
growth forecast by IEA; it has cut 2017 oil demand projection by 100k bpd to
1.5 mbpd; total oil demand may be around 97.7 mbpd in 2017 and 98.9 mbpd in
2018. EIA sees ME/Gulf tensions and any real disruptions in oil supply thereof
as very temporary.
Thus EIA forecast of 1.5 mbpd & 1.3 mbpd for 2017-18 is in
sharp contrast to OPEC’s recent forecast of 1.53 mbpd & 1.51 mbpd
respectively. Apart from divergence of these two reports, Oil is also being
affected by rising US oil output as prices continue to hover above $55.
Technically, whatever be the narrative, WTI now has to sustain over
57.85-58.05 area for next leg of rally towards 58.85-60.25 & 61.60-62.30;
otherwise it will come down; immediate support is now around 56.30-56.00 & 55.60-55.00
zone in the coming days.
Europe Set To Trade Almost Flat On Subdued Global Cues Amid Miss In China Data & Bond Market Turmoil And Higher EUR
Asia Slides On Muted China Data & Bond Market Turmoil Despite Higher USD
USD Slumped On US Tax Reform Uncertainty & Fine Prints Of An "Upbeat" PPI
SGX-NF
BNF
WTI
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