Nifty Inched Down On Mixed Global Cues And Fiscal, LTCGT & Earnings Worries

Market Wrap: 02/01/2018 (17:00)

NSE-NF (Jan):10472 (-27; -0.26%) 

(TTM PE: 26.71; Abv 2-SD of 25; TTM Q1FY18 EPS: 391; NS: 10442; Avg PE: 20; Proj FY-18 EPS: 418; Proj Fair Value: 8360)

NSE-BNF (Jan):25393 (-54; -0.22%) 

(TTM PE: 29.22; Near 3-SD of 30; TTM Q1FY18 EPS: 867; BNS: 25338; Avg PE: 20; Proj FY-18 EPS: 961; Proj Fair Value: 19220)

For 03/01/2018: Jan-Fut

Key support for NF: 10460/10415-10360/10325

Key resistance for NF: 10505/10575-10610/10650

Key support for BNF: 25200/24950-24800/24500

Key resistance for BNF: 25650/25775-25875/26050

Trading Idea (Positional):

Technically, Nifty Fut-Jan (NF) 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 10555-10505 area, NF may fall towards 10460/10415-10360/10325 & 10300/10285-10240 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 25725-25650 area, BNF may fall towards 25350/25200-24950 & 24800-24500 area in the near term (under bear case scenario).

Indian market (Nifty Fut-Jan/India-50) today (2^nd Jan) closed around 10472, slips by almost 27 points (-0.26%) and off the opening high of 10524 on fiscal & LTCGT (long term capital gain tax) worries amid holiday thinned subdued Global/EU cues (higher EUR); it made a session low of 10436, but recovered in late trade to close almost flat; Asian cues were stable on upbeat China MFG PMI data and reports that new property tax will not be imposed until 2020.

Market is also concerned about Q3FY18 earnings to be released next week onwards and higher oil; but an upbeat MFG PMI data for Dec released yesterday at 51.5 vs est 50.6; prior: 50.8 and core sector output data (Nov) at 6.8% vs prior 4.7% may have cushioned the impact of macro worries and market basically consolidated form 2017 closing of 10557 to 10436 (-1.15%) on DII/MF year-end portfolio rebalancing (some profit booking after an impressive 2017 gain-one year as LTCG) amid holiday thinned market.

Also, some encouraging auto sales figures may have helped the market to some extent. Apart from fiscal & LTCGT worries, market may be also concerned about ultimate fate of corporate NPA/NPL resolution with so much stressed assets are on the block with various legal challenges, huge hair –cuts through NCLT/IBC process and ongoing political controversies thereof ahead of 2018-19 series of elections & political populism; PSBS recaps may be another challenge to fix India’s twin B/S pains.

Today Nifty was helped mostly by Tata Motors, HDFC Bank, HDFC, Bharti Infratel, ONGC, Indusind Bank, UPL, VEDL, HCL Tech and M&M by almost 83 points altogether.

Nifty was dragged mostly by Eicher Motors, IOC, SBI, IBULLS HSG, L&T, Bharti Airtel,. Maruti, ITC, HPCL & Axis Bank by around 70 points cumulatively.

Overall, today Indian market was helped by mixed automobiles (mixed Dec sales), financials, techs, metals (upbeat China MFG PMI data yesterday) & selected private banks (HDFC twins), while it was dragged by PSBS, FMCG, Media, Pharma, Reality, OMC (concern of higher WTI amid renewed Iran tensions) & consumption stocks.

SGX-NF