Market Wrap: 09/01/2018 (17:00)
NSE-NF (Jan):10641 (+10; +0.09%)
(NS: 10637; TTM Q2FY18 EPS: 391 TTM PE: 27.20; Abv
2-SD of 25; Avg FWD PE: 20; Proj FY-18 EPS: 418; Proj Fair Value: 8360)
NSE-BNF (Jan):25710 (-15; -0.06%)
(BNS: 25676; TTM Q2FY18 EPS: 867; TTM PE: 29.61;
Near 3-SD of 30; Avg FWD PE: 20; Proj FY-18 EPS: 961; Proj Fair Value: 19220)
For 10/01/2018: Jan-Fut
Key support for NF:
10600/10550-10490/10415
Key resistance for NF: 10675/10700-10775/10815
Key support for BNF:
25600/25450-25300/25200
Key resistance for BNF:
25875/26000-26100/26250
Trading Idea (Positional):
Technically, Nifty Fut-Jan (NF) has to sustain over 10700 area for further
rally towards 10750/10775- 10815/10860 & 10955-11095 zone in the short term
(under bullish case scenario).
On the flip side, sustaining below 10675-10655 area, NF may fall towards
10600/10550-10490/10415 & 10350-10200 zone in the short term (under bear
case scenario).
Technically, Bank Nifty-Fut (BNF) has to sustain over 25875 area for further
rally towards 26000/26100-262000/26250 & 26325-26615 zone in the near term
(under bullish case scenario).
On the flip side, sustaining below 25825 area, BNF may fall towards 25600/25450-25300/25200
& 25000-24800 area in the near term (under bear case scenario).
Indian market (Nifty Fut-Jan/India-50) today (9th Jan) closed around 10641, edged up by almost 10 points
(+0.09%) on positive global cues, optimism about earnings & upbeat direct
tax collection coupled with concern for a populist budget ahead of elections
and fiscal slippages thereof. Also strong opening cues from EU on lower EUR may
have also helped the domestic market sentiment.
Nifty-Fut made am opening session low of 10612
& late hours high of 10657 and Nifty-50 (spot) made another record high of
10659, before closing around 10637, at another milestone high. But midcaps
(broader market) snapped 4 days winning streaks ahead of earnings season.
Towards the closing hours, market got some boost
on reports that Govt is considering next major merger between PSU banks early
next fiscal (FY-19); Govt likely to announce new bank merger proposal in the
Budget.
Meanwhile, India’s direct tax collection for
Apr-Dec’17 (Q3FY18) came at Rs.6.56 tln vs 5.53 tln (YOY); a growth of around
18.2%; this is almost 67% of total BE (FY-18) at Rs.9.8 tln vs 65% (YOY); Corp
income tax collection was at Rs.3.72 tln, while personal income tax came around
Rs.2.65 tln, including Rs.0.11 tln for various IDS (income disclosure scheme)
provided by the Govt after DeMo.
Overall direct tax figure still may be muted and
thus market may be also concerned about fiscal math, although this figure may
be above market estimates and thus may have also helped the market sentiment to
some extent today.
But some adverse report about growing NPA/NPL in
affordable housing sector loan books from self-employed & SME borrowers may
have also affected the overall market sentiment; although corporate/Govt
employees housing loan repayments are fine.
After market hours, Govt signaled about FDI
reforms with 100% FI stake approval in Airlines (to save Air-India which is
stressed with huge debt of Rs.0.55 tln), power exchanges, real estate broking,
single brand retail (automatic approval) and ease of FDI in construction
sector. Govt may also look into the issues of ease of doing business related TO
foreign direct investment (FDI) in tomorrow’s cabinet meet (10th
Jan).
Elsewhere,
World Bank (WB) has forecasted Indian GDP growth for 2017-2018 at 6.7%-7.3%,
citing “huge potential” for the Indian economy, although in the short term, it’s
being affected due to spillover effect of DeMo & GST blues. WB has also
projected China growth for 2017-18 at 6.8-6.4%. The latest WB projection for
2017 is less than 0.5% & 0.2% for 2018 from earlier projections.
But
WB has also urged India to take necessary steps to boost private investments,
NPA resolution, labour market & healthcare reform despite having a
favourable young demography, a rare phenomenon in other DM/EM.
But proper
implementation of GST in simple format (one nation one tax concept) & adequate
recaps for PSBS is also required. Indian private/corporate capex is being
affected due to stressed B/S & huge NPA in bank loans; i.e. the legacy
issue of “twin balance sheet” problem.
Nifty
was today helped mostly by RIL, ITC, IOC, Yes Bank, Tata Motors, Infy, Coal
India (increase of thermal coal prices), Wipro, HDFC Bank & Asian paints by
around 103 points, while it was dragged by Eicher Motors (subdued sales of
costly models-2W, may be a victim of DeMo), ZEEL, Bharti Infratel (ongoing uncertainty
about its tower asset sales), Bajaj Fin, ICICI Bank, VEDL, HDFC (affordable
housing loan woes), Maruti, Bharti Airtel and L&T by almost 60 points
cumulatively.
Overall,
today Indian market was helped by energies, mixed private banks, FMCG, techs,
reality while dragged by automakers, PSBS, financials, media, pharma,
consumption & infra.
For
Indian market, Brent Oil now hovering around $70 may be a big risk for its
fiscal consolidation in the coming days.
SGX-NF
BNF
WTI
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