Nifty jumped on lower oil and RBI gave no signal of an imminent hike despite hawkish hold stance

Market Wrap: 08/02/2018 (17:00)

NSE-NF (Feb):10572 (+107; +1.02%)

(NS: 10577; Q2FY18 EPS: 391; Q2FY18 PE: 27.05; Abv 2-SD of 25; Avg FWD PE: 20; Proj FY-18 EPS: 418; Proj Fair Value: 8360)

NSE-BNF (Jan):25980 (+317; +1.23%)

(BNS: 25921; Q2FY18 EPS: 867; Q2FY18 PE: 29.90; Abv 3-SD of 30; Avg FWD PE: 20; Proj FY-18 EPS: 961; Proj Fair Value: 19220)

For 09/02/2018: Feb-Fut (Key Technical Levels)

Updated: 07:40 (SGX-NF: 10325); -247 points (-2.34% on negative global cues)

Expected BNF opening: 25350

Support for NF: 10280/10230-10180/10075

Resistance for NF: 10400/10435-10490/10535

Support for BNF: 25300/25150-24800/24550

Resistance for BNF: 25500/25700-25800/26050

Trading Idea (Positional):

Technically, Nifty Fut-Jan (NF) has to sustain over 10435 area for further rally towards 10490-10535 & 10585-10650 zone in the short term (under bullish case scenario). 

On the flip side, sustaining below 10415-10400 area, NF may fall towards 10280-10230 & 10180-10075 zone in the short term (under bear case scenario).

Technically, Bank Nifty-Fut (BNF) has to sustain over 25500 area for further rally towards 25700-25800 & 26050-26200 zone in the near term (under bullish case scenario).

On the flip side, sustaining below 25450-25400 area, BNF may fall towards 25300-25150 & 24800-24550 area in the near term (under bear case scenario).

Indian market (Nifty Fut-Feb/India-50) today (8^th Feb) closed around 10572, jumped by almost 107 points (+1.02%) on fall in oil & bond yields, despite a hawkish hold stance by RBI yesterday as market was “relieved” that RBI will not hike in the immediate future; it made a session high of 10640 & low of 10470 amidmuted US & mixed Asian cues on higher US bond yields & USD amid concern of an imminent China Yuan devaluation.

Government also defends the budget math and said that it’s committed to fiscal prudence for next four years and asserts that the stock market did not fall because of LTCGT (long term capital gain tax) issue, but for terrible global cues. Government is also very upbeat about economic growth prospect.

Overall, earnings optimism (stock specific) coupled with huge short covering & bargain hunting has boosted the market today.

Today Nifty was supported by Infy, HDFC, RIL, SBI, Sun Pharma, Bharti Infratel, L&T, IBULLS HSG & HDFC Bank by almost 84 points altogether.

Nifty was dragged by IOC, ITC, Tata Motors, Auro Pharma, Power Grid, VEDL, ONGC, Adani Ports, NTPC, & Hindalco by around 42 points cumulatively.

Overall, today Indian market was helped by banks (PSBS-fall in bond yields and hopes of earnings recovery) & financials, automakers (analyst optimism), FMCG, techs, media, metals, pharma, reality, cements (upbeat earnings & buzz of price hike), while dragged by mixed energies/OMC & power stocks.

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