Market Wrap: 10/01/2018 (17:00)
NSE-NF (Jan):10635 (-12; -0.11%)
(NS: 10632; TTM Q2FY18 EPS: 391 TTM PE: 27.19; Abv
2-SD of 25; Avg FWD PE: 20; Proj FY-18 EPS: 418; Proj Fair Value: 8360)
NSE-BNF (Jan):25625 (-84; -0.33%)
(BNS: 25617; TTM Q2FY18 EPS: 867; TTM PE: 29.55;
Near 3-SD of 30; Avg FWD PE: 20; Proj FY-18 EPS: 961; Proj Fair Value: 19220)
For 11/01/2018: Jan-Fut
Key support for NF: 10615/10560-10500/10415
Key resistance for NF:
10675/10700-10775/10815
Key support for BNF:
25600/25475-25325/25200
Key resistance for BNF: 25775/25875-26000/26200
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
10615/10560-10500/10415 & 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 25825-25775 area, BNF may fall towards 25600/25475-25325/25200
& 25000-24850 area in the near term (under bear case scenario).
Indian market (Nifty Fut-Jan/India-50) today (10th Jan) closed around 10635, inched down by almost 12 points
(-0.11%) on muted Asian/EU cues amid lower USD & higher global bond yields
(US/EU/JP) after BOJ mini tapering & Chinese warning to slow down or evenhalt USTSY purchase on economic as well as political concern (trade sanctions
threat against China by Trump).
Banks & financials drag on higher Indian bond
yields & PSBS recaps concerns for smaller PSU banks, while techs helped it
on TCS & Infy earnings optimism & IRS contract procure by Infy; surging
Brent oil hovering around $70 may have also dented the confidence of the Indian
market as the country imports almost 80% of its requirement from overseas.
Earlier, Indian 10YGSEC bond yield today soared to
AROUND 7.44% at multi-month high on concern for fiscal slippages, surging oil
& stagflation (lower growth & higher inflation); but it then plunged to
almost 7.22% after confirmed news of FDI reforms (ease) & Nifty-Fut also
rebounds from session low of 10596 after making an opening session high of
10648.
As FDI reform news was already known to the
market, there was no major reaction; but market may be also in doubt about any
takers of Air India even with 49% FI stake as the national airlines is stuck
with around Rs.0.55 tln of B/S debt; Govt (then UPA) may have taken this step
years ago, when KFA has sought this reform to save itself from an eventual
bankruptcy.
Market Is
Concerned About LTCGT:
Market is also concerned about Long Term Capital
Gain Tax (LTCGT) that may be introduced in the budget; Govt may apply LTCGT
selectively above Rs.5 lakh long term capital gain @10% so that majority of the
small retail investors (middle class) will be out of its ambit and only around
5000 HNI/institutions may be affected as Govt may want to keep the voters
(middle class) in “good mood” in the election time as they were already “disturbed”
due to DeMo & GST blues.
Alternately, Govt may also change the core
definition of the LTCGT itself from present one year to three years to “encourage”
value investing rather than short term speculation; but most of the retail
investors being “short term” mentally & considering present market
volatility, will end up paying LTCGT at the present rate of STCGT (15%) and
Govt will be also happy considering the present fiscal imbalance and “too
little” contribution of the capital market towards development of the country.
Govt may also take a number of populist steps like
income tax relief/cut aiming at the middle class ahead of elections and all
these concerns are being reflected by the bond market.
Today Nifty was supported mostly by TCS, Infy,
Wipro, HCL Tech, HPCL, Tech-M, RIL, Adani Ports, Indusind Bank & Bharti
Infratel by around 20 points altogether, while it was dragged by Tata Motors,
IOC, HDFC, Eicher Motors, SBI, L&T, VEDL, Bajaj Fin, ITC & Asian Paints
by almost 15 points cumulatively.
Overall, today Indian market was helped by techs
(earnings optimism), reality/retailers (FDI optimism), and selected energies
(higher oil), while it was dragged by banks & financials, automakers,
selected FMCG, media, pharma, consumption & infra stocks.
SGX-NF
BNF
USDJPY
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