Market Wrap: 30/01/2018 (17:00)
NSE-NF (Feb):11071 (-66; -0.60%)
(NS: 11050; Q2FY18 EPS: 391; Q2FY18 PE: 28.26; Abv
2-SD of 25; Avg FWD PE: 20; Proj FY-18 EPS: 418; Proj Fair Value: 8360)
NSE-BNF (Jan):27349 (-160; -0.58%)
(BNS: 27269; Q2FY18 EPS: 867; Q2FY18 PE: 31.45; Abv
3-SD of 30; Avg FWD PE: 20; Proj FY-18 EPS: 961; Proj Fair Value: 19220)
For 31/01/2018: Feb-Fut (Key Technical Levels)
Support
for NF: 10095/10970*-10895/10870
Resistance
for NF: 11065/11095-11155/11195*
Support
for BNF: 27300/27100-26900/26700
Resistance
for BNF: 27500/27650-27850/28075
Trading Idea (Positional):
Technically, Nifty
Fut-Jan (NF) has to sustain over 11095 area for further rally towards 11155-11195
& 11235-11285 zone in the short term (under bullish case scenario).
On
the flip side, sustaining below 11065 area, NF may fall towards 10095/10070-10895/10870
& 10825-10725 zone in the short term (under bear case scenario).
Technically, Bank
Nifty-Fut (BNF) has to sustain over 27650 area for further rally towards
27750-27850 & 28075-28405 zone in the near term (under bullish case
scenario).
On
the flip side, sustaining below 27600-27500 area, BNF may fall towards
27300-27100 & 26900-26700 area in the near term (under bear case scenario).
Indian market (Nifty Fut-Feb/India-50) today (30th
Jan) closed around 11071, tumbled by almost 66 points
(-0.66%) on muted global cues amid plunge in bonds (higher bond yields) coupled
with domestic concern for fiscal slippages, higher oil & stretched
valuation as highlighted in the economic survey; Nifty-Fut made an opening
minutes high of 11121 and late day low of 11053.
There was some long unwinding (profit booking) ahead
of Budget on concern for LTCGT (long term capital gain tax) & political
populism, being the last full budget before the 2018-19 general election. As
par reports & some opinion polls, BJP’s popularity is on the down side,
especially in small towns & rural areas due to issues of unemployment, DeMo
& GST and as par current trend, BJP may not get the 2/3rd majority
of its own in the 2019 election.
If GST spillover effect normalize in the coming
months and result from the four big state elections are favourable, then BJP
may go for an early general election by Dec’18; in that scenario, government
may also present a full budget by Feb’18, but lack of any absolute majority in
the Parliament may be also a source of constant political instability in the
coming days.
As par Former FM P. Chidambaram (INC): “EconomicSurvey18
is a confession that the Govt failed to tackle employment, education &
agriculture related challenges; the opposition will come together in 2019 to
form a grand coalition”.
As par Moody’s, which recently upgraded India
after 14 years, also opined that government may report 3.5% fiscal deficit vs
est of 3.2% in FY-18: Fiscal deficit may Expand If Oil Prices Stay Higher; Don't
See External Vulnerabilities Impacting India; FDI Has Picked Up and Is Helping
Provide Stability To Balance Of Payments; India in a Stronger Position To Deal
With Higher Oil Prices; Expect Oil Prices To Trade Between $40-$60/bbl In The
Medium Term”.
Moody’s- “PSU Bank Recap Is Credit Positive For
The Sovereign; Expect Govt To Focus On Medium-Term Fiscal Framework To Bring
Down Deficit; GST Council is Trying To Make Compliance Easier and Adjusting
Rates; Expect Some Sort Of Slippage In Fiscal Deficit; Expect Fiscal Slippage
Of Around 3.5% Of GDP; GST Implementation Has Been Disruptive To The Economy; GST
Revenues Less Than Expected Due To Compliance Issues”.
After market hours, government notified officially
issuance of PSBS recaps bonds. The bonds will have 6 different maturities with
interest rates of between 7.35% & 7.68% payable at half yearly (Held to
Maturity-HTM category).
As par CEA: “There is no need for new big bang
reforms; instead suggests seeing proper completion of the existing programmes; The
case for monetary easing is less persuasive now & pours cold water on rate
cut hopes saying India is now close to its inflation target; Election year does
not mean fiscal populism; Govt should believe in fiscal consolidation for its
own sake & not for rating agencies; Medium term challenge is to boost agri
productivity growth; by next 3-5 years, India should have a single GST rate”.
All eyes will be now on the government & on
the budget (fiscal prudence or political populism and LTCGT).
Today Nifty was mostly supported by Tata Steel,
Axis Bank, IOC (upbeat report card), Ambuja Cements, ICICI Bank, while dragged
by ITC, Bosch, Sun Pharma, L&T & HDFC Bank.
Overall, Indian market was today supported by OMC
(upbeat report card from IOC) while dragged by almost all the other sectors
like banks & financials, automakers, techs, media, FMCG, mixed metals,
pharma, reality, mixed energies, infra & consumer staples; mid/small-caps
(broader market) was under severe selling pressure.
SGX-NF
BNF
10YJGB
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