Market Wrap: 27/12/2017 (17:00)
NSE-NF (Dec):10492 (-34; -0.33%)
(TTM PE: 26.83; Abv 2-SD of 25; TTM Q1FY18 EPS: 391;
NS: 10491; Avg PE: 20; Proj FY-18 EPS: 418; Proj Fair Value: 8360)
NSE-BNF (Nov):25443 (-230; -0.90%)
(TTM PE: 29.41; Near 3-SD of 30; TTM Q1FY18 EPS:
867; BNS: 25496; Avg PE: 20; Proj FY-18 EPS: 961; Proj Fair Value: 19220)
For 28/12/2017: Dec-Fut/SPOT
Key support for NF: 10455-10400/10340
Key resistance for NF:
10525/10575-10610/10650
Key support for BNF: 25400-25200/24950
Key resistance for BNF: 25600/25775-25875/26050
Trading Idea (Positional):
Technically, Nifty Fut-Dec (NF)/NS has to sustain over 10575 area for further
rally towards 10610/10650-10695 & 10745-10795 zone in the short term (under
bullish case scenario).
On the flip side, sustaining below 10555-10525 area, NF may fall towards
10455-10400/10340 & 10270-10180 zone in the short term (under bear case
scenario).
Technically, Bank Nifty-Fut (BNF) has to sustain over 25775 area for further
rally towards 25875- 26050 & 26200-26325 zone in the near term (under
bullish case scenario).
On the flip side, sustaining below 25725-25600 area, BNF may fall towards 25400-25200/24950
& 24800-24575 area in the near term (under bear case scenario).
Indian market (Nifty Fut-Dec/India-50) today (27th Dec) closed around 10492, skids by almost 34 points (-0.33%)
and well off the day high of 10566 on concern for fiscal slippages after Govt
signalled that it could borrow more than the FY-18 estimate.
Govt has already
borrowed Rs.3.72 tln in H1FY18 and was supposed to borrow another Rs.2.08 tln
in H2FY18. Govt will soon issue official statement on fiscal situation and any
additional borrowing in Q4FY18; subsequently, it made a session low of 10476;
EU market also came into pressure on tech/Apple woes, dragging the Indian
market further.
Indian market today opened around 10525, almost
flat on subdued Global/Asian cues and concern about fiscal slippages amid
higher Oil & muted GST revenue, but soon surged to another record high for
Nifty Fut-I (10566) & Nifty-50 (Spot @10552) on telecom debt resolution
optimism (R-COM) & an extended “Santa Rally” and year end (CY) fund
flows/portfolios adjustments.
But ongoing rally in Oil and muted GST revenue may
have spoiled the “Santa Party” as market is worried about fiscal slippages;
today Indian 10YGSEC bond yield hits another milestone high at 7.310% and is
closed around 7.26%; USDINR-I closed around 64.32 (+0.05%).
India Is Set
To Breach Fiscal Deficit Target For FY-18:
After market hours, Govt confirmed that it will
borrow an additional Rs.0.50 tln for remaining Q3FY18 vs market estimates of
Rs.0.25 tln; as par various estimates, now the fiscal deficit may have already breached
the targeted 3.2% of estimated GDP and by FY-18, it may touch as high as 3.5%.
Although there is some confusions amid
contradictory statements by Govt officials about exact amount of estimated additional
borrowings, as par some other estimates fiscal deficit may reach as high as
3.7% of FY-18 GDP if actual GDP does not grow as expected amid DeMo & GST
blues (economic slowdown) and higher Oil & Govt capex to dig out the
economy from its deepest slumps since 2014.
Govt is expecting recent hikes in custom duties on
several items and an average monthly GST collection of Rs.0.85-0.90 tln may
cushion the fiscal slippages impact; Govt is looking for the Dec’17 QTR GST and
higher corporate advance tax collection figure along with incremental
disinvestment proceeds for its revenue shortfall makeup. Govt has also slashed
interest on several small savings instrument by 0.20% yesterday in an effort to
minimize the fiscal impact with modest political risk.
Overall, rating agencies may not be “too happy”
with this fiscal deficit breach and this may be a negative factor for India’s
rating action in the days ahead.
Meanwhile, Indian market regulator, SEBI is also
tightened the screws on stressed cos & rating agencies after R-COM debt
fiasco & formation of huge stressed assets in the banking system, affecting
the overall market sentiment. All eyes may be also now on the Budget
preparations for FY-19, which will be the last full fledged budget by the Govt
before going into 2019 poll.
Today Nifty was helped mostly by Sun Pharma (US
FDA approval), VEDL (higher metals/copper), TECHM, Wipro, ZEEL, DRL, M&M,
Auro Pharma, HUL & UPL by around 17 points altogether, while it was dragged
by IOC (higher Oil negative for OMC), ICICI Bank (mis-selling of investment
products & higher Govt borrowing, negative for banks), HDFC Bank, RIL, ITC,
TCS, L&T, Bajaj Fin, Bharti Airtel & SBI by almost 39 points
cumulatively.
Overall, today Indian market was helped by media,
pharma & mixed techs while dragged by Banks & Financials (higher Govt
borrowing & higher bond yields and R-COM NPA provisions), FMCG, metals,
reality, energies/OMC & consumer staples.
SGX-NF
BNF
USDJPY
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