Tuesday, 12 December 2017

Nifty Surged On Positive Global Cues & NAMO Optimism In GJ Election



Market Wrap: 11/12/2017 (17:00)

NSE-NF (Dec):10352 (+60; +0.59%) 

(TTM PE: 26.40; Abv 2-SD of 25; TTM Q1FY18 EPS: 391; NS: 10322; Avg PE: 20; Proj FY-18 EPS: 418; Proj Fair Value: 8360)

NSE-BNF (Nov):25421 (+56; +0.22%) 

(TTM PE: 29.30; Near 3-SD of 30; TTM Q1FY18 EPS: 867; BNS: 25405; Avg PE: 20; Proj FY-18 EPS: 961; Proj Fair Value: 19220)

For 12/12/2017: Dec-Fut

Key support for NF: 10295-10230/10190

Key resistance for NF: 10375-10395/10425

Key support for BNF: 25200-25100/24850

Key resistance for BNF: 25575-25775/25875

Trading Idea (Positional):

Technically, Nifty Fut-Dec (NF) has to sustain over 10395 area for further rally towards 10425/10475 -10510/10535 & 10575-10640 zone in the short term (under bullish case scenario). 

On the flip side, sustaining below 10375-10355 area, NF may fall towards 10295-10230 & 10190-10150 zone in the short term (under bear case scenario).

Technically, Bank Nifty-Fut (BNF) has to sustain over 25575 area for further rally towards 25775-25875 & 26050-26200 zone in the near term (under bullish case scenario).

On the flip side, sustaining below 25525 area, BNF may fall towards 25200-25100 & 24850 & 24750-24650 area in the near term (under bear case scenario).

Indian market (Nifty-Fut/India-50) today (11th Dec) closed around 10352, surged by almost 60 points (+0.59%) after making an closing session high of 10354 and a day low of 10302 tracking positive global cues and hopes for a clean win by BJP in GJ this time despite indication of a close fight between NAMO & RAGA as being revealed by different media & unofficial betting sources.

Regional Asian market sentiment was upbeat today on China optimism after reports that China Govt/regulator may go slow for implementation of the new wealth management regulation; also new loans growth for Nov was upbeat. In Japan, gauge of JP Q4 large company business conditions climbed to a 2-year high.

As par various opinion polls, if BJP wins greater than 120-150 seats in GJ this time, expect some more rally till around 10600-10675 and if it gets less than 100 seats, expect steep correction till around 9750-9700; if it gets around 100-110 seats, expect Nifty Rangebound around 10550 as this has been already discounted now to a large extent.

In any way, whatever may be the GJ election result, earnings need to justify steep valuation and Nifty EPS should come around 520 for FY-18 as par earlier analysts projection. But going by the actual muted trend, it looks very tough and as par present trend, FY-18 Nifty EPS may come around 418 this time, although it may be also a milestone, being above 400 after a long time (if come indeed).

Today Nifty was supported mostly by HDFC, ITC, TCS, SBI (analyst upgrade) M&M, Maruti (analyst optimism), HDFC Bank, Bosch, Auro Pharma & Wipro by around 48 points cumulatively.

Nifty was dragged mostly by RIL (analyst downgrade), Bharti Infratel, Asian Paints, ONGC, NTPC, Adani Ports, Tata Motors, IBULLS HSG, Yes Bank & Hindalco by almost 15 points altogether.

Overall, today Indian market was helped by Banks & Financials, Auto, FMCG, Techs, Media, Pharma, Metals, Consumer Staples & Infra, while dragged by Reality & Energies


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