Friday, 12 January 2018

Nifty Edged Up On Mixed Global Cues And Worries About Higher Oil & Earnings Optimism

Market Wrap: 11/01/2018 (17:00)

NSE-NF (Jan):10660 (+23; +0.21%) 

(NS: 10651; TTM Q2FY18 EPS: 391 TTM PE: 27.24; Abv 2-SD of 25; Avg FWD PE: 20; Proj FY-18 EPS: 418; Proj Fair Value: 8360)

NSE-BNF (Jan):25660 (+34; +0.13%) 

(BNS: 25661; TTM Q2FY18 EPS: 867; TTM PE: 29.60; Near 3-SD of 30; Avg FWD PE: 20; Proj FY-18 EPS: 961; Proj Fair Value: 19220)

For 12/01/2018: Jan-Fut

Key support for NF: 10695/10640-10600/10560

Key resistance for NF: 10750/10775-10815/10850

Key support for BNF: 25600/25500-25325/25200

Key resistance for BNF: 25775/25875-26000/26200

Trading Idea (Positional):

Technically, Nifty Fut-Jan (NF) has to sustain over 10775 area for further rally towards 10815/10860- 10955 & 11095-11155 zone in the short term (under bullish case scenario). 

On the flip side, sustaining below 10750 area, NF may fall towards 10695/10640-10600/10560 & 10515/10450-10415/10360 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 25600/25500-25325/25200 & 25000-24850 area in the near term (under bear case scenario).

Indian market (Nifty Fut-Jan/India-50) today (11th Jan) closed around 10660, edged up by 23 points (+0.21%) on mixed global cues and earnings optimism, higher oil, fiscal worries, concern for populist budget and imposition of long term capital gain tax (LTCGT) directly or indirectly.

Today, Indian market opened around 10630, almost flat on muted Asian cues and soon after that made the session low of 10615 on concern of fiscal slippages but recovered later on mixed auto sales figure for Dec’17 and modest FY-18 guidance by SIAM and it made the session high of 10682 on hopes of solid corporate earnings in Q3FY18; Nifty spot made a fresh life time high of 10664.60, before closing at 10651.29.

Market is expecting upbeat earnings for automakers (recovery from DeMo & GST blues), energies on higher crude oil prices and good GMR, while for banks should report mixed numbers on NCLT & Bond-MTM related provisioning and pharma may report disappointed numbers; techs may report mixed numbers on seasonal softness, but EBITA margin may also improve.

Overall, Q3PAT growth may come around 11.4% on volume & subdued raw material cost, but higher INR may also dent margin of exporters.

Meanwhile, Indian 10YGSEC bond yield again soared to 7.453% at fresh 52 weeks high and eyeing 7.50% on concern for fiscal slippages, economic stagflation & hawkish RBI in the coming days; it closed the day at 7.438%.

USDINR-I is also edged higher at around 63.77 (+0.05%) after making a day high of 63.93 on global recovery in USD after China denial of yesterday’s reduced UST buying news. A dual combination of higher USD & higher oil may not be good for Indian macro and rating agencies may also review their stance on India, if Brent oil sustains above $70.

TCS Reported Below Estimates Q3FY18 Numbers:

After market hours TCS has reported Q3 numbers slightly below market estimate, but guidance was optimistic. Technically, TCS (CMP: 2790) need to sustain above 2850-2875 area for further rally; otherwise it may come down and may correct if sustains below 2810-2775 zone.

Today Nifty was mostly supported by Infy (earnings optimism), HDFC, HDFC Bank, Kotak Bank, IBULLS HSG, Bharti Airtel, HUL, Eicher Motors, Yes Bank and M&M by almost 45 points altogether.

Today Nifty was mostly dragged by Indusind Bank (mixed report card/below estimate NIM & uptick in NPA), ICICI Bank, RIL (below estimate telecom subscriber additions for R-Jio & subdued SGX GRM), Bajaj Fin, TCS, Wipro, Axis Bank, Bharti Infratel, HPCL & Maruti by almost 30 points cumulatively.

Overall, today Indian market was supported by banks & financials, mixed auto makers, FMCG, TECHS, media, pharma & property developers/reality (affordable housing & FDI optimism) while dragged by metals, energies & selected private banks. All focus is now on Infy earnings & macro data (CPI/IIP) later today.




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