Market Wrap:
26/03/2018
NSE-NF (March):10003 (-125; -1.23%)
NSE-BNF (Jan):23680 (-492; -2.03%)
Valuation metrics:
NS: 9998; Q2FY18 EPS: 410; Q2FY18 PE: 24.39; Avg
FWD PE: 20; Proj FY-18 EPS: 418; Proj Fair Value: 8360
BNS: 23670; Q3FY18 EPS: 822; Q2FY18 PE: 28.80; Avg
FWD PE: 20; Proj FY-18 EPS: 961; Proj Fair Value: 19220
For 27/03/2018:
Updated: 09:15
SGX-NF: 10015 (+12; +0.12%)
Expected BNF opening: 23750 (+0.15%)
(Almost flat on muted global cues amid ongoing
US-China trade war and White House Turmoil concern)
March-Fut (Key Technical Levels)
Support for NF:
9950/9920-9865/9815-9760/9705-9680/9585
Resistance to NF:
10055/10110-10150/10210-10250/10300-10350/10400
Support for BNF:
23600/23400-23150/22995-22700/22500-22250/22000
Resistance to BNF:
23900/24000-24200/24400-24600/24900-25150/25250
Technical
View (Positional):
Technically, Nifty Fut-Jan (NF) has to sustain over 10110 for
a further rally towards 10150/10210-10250/10300-10350/10400 in the short term
(under bullish case scenario).
On the flip side, sustaining below 10090-10055 NF may fall
towards 10000/9950-9920/9865-9815/9760-9705/9680 in the short term (under bear
case scenario).
Technically, Bank Nifty-Fut (BNF) has to sustain over 24050
for a further rally towards 24200/24400-24600/24900-25150/25250 in the near
term (under bullish case scenario).
On the flip side, sustaining below 24000-23950, BNF may
fall towards 23600/23400-23150/22995-22700/22500 in the near term (under bear
case scenario).
The
Indian market story on 23/03/2018:
The Indian market (Nifty Fut-March/India-50) closed around 10003 on Friday,
plunged by almost 1.23% on terrible global cues amid concern of an all-out
trade war between US and China coupled with domestic worries about the widening
impact of PNB saga and an almost broken
down Indian banking system, under severe trust deficit. Nifty Fut made a day
high of around 10044 and a late day low of 9960 on negative EU cues and higher oil.
Apart from unconfirmed reports of direct involvement of
spouse of top private bank CEOs in the Nirav Modi and some other suspected loan
fraud/failure cases involving “stressed” Videocon group, there was another
report that CBI has made some arrest involving loan frauds in SBI and certain
other PSBS. There seems to a trust deficit on the overall Indian banking system
after a sudden surge in such loan scams
following the PNB “loot” fall out.
The
market is concerned about NCLT path of NPA resolution:
The market is also concerned about the NCLT path of NPA resolution
amid increasing litigations and complex rules & regulations despite “overwhelming”
response in some “celebrity” corporate stressed assets like Essar Steel, Bhushan Steel, but considerable concern
remains about ultimate fate of other “big” corporate stressed assets and the
overall “house of debt” in the Indian corporate balance sheet and the attempt
of backdoor entry by some celebrity big corporate defaulters at the cost of
bank’s haircut.
The Indian market may be also concerned that the NCLT
resolution path may not be corruption free despite the stamp of judiciary and
bankers are also playing in the back foot amid fears of future investigation
and current CBI/ED phobia & acquisitions of frauds.
Global
cues were terrible during Indian market hours:
On Friday, US stock future (SPX-500), was down -0.26% at 6 weeks low and European stocks were down
around 1.50% at more than 13 months low as global stocks sell-off on heightened
trade war concerns. The trade conflict
between the US and China escalated after China unveiled tariffs on $3 billion
of US imports of pork, recycled aluminum, steel pipes, fruit and wine in
retaliation for $60 bln US tariffs on some Chinese imports and the metal
tax.
The US then declared a temporary exemption for the EU and
other countries on steel and aluminum tariffs, signaling out China as the main
recipient of the tariffs. The US will
give the EU, Argentina, Australia, Brazil, Canada, Mexico and South Korea until
1st May to negotiated levies on steel and aluminum, eligible for a permanent
exemption.
Basically, the
US is virtually declaring exemption for the EU and some other selected
countries on metal tariffs, signaling out China as the main target of the US
tariffs. The market is concerned that such a hard-nosed approach by the US against
China may have widespread and lasting consequences on global economy and
politics.
With sizeable holdings of
US Treasuries and its growing export market, China has considerable leverage
over the US. Although China’s reactions so far are quite measured and matured, they
may adversely react to Trump’s immaturity and madness in the coming days.
Asian stocks closed sharply lower: Japan -4.51%, Hong Kong
-2.45%, China -3.39%, Taiwan -1.66%, Australia -1.96%, Singapore -2.00%, South
Korea -3.37%, India -1.24%. Escalation of the trade war between the US and
China undercuts the outlook for global economic growth and fueled a slump in
Asian equity markets along with a slump in USD, negative for exports savvy
Asian economy.
Asian stocks saw hefty losses on trade war fears after the
US announced USD $50 bln of tariffs on China and with the latter planning
tariffs of USD $3 bln in retaliation, coupled with another report that National
Security Advisor McMasters was replaced by policy hawk John Bolton.
The intensified trade tensions triggered a bloodbath across
stock markets with ASX 200 led lower by miners as Chinese metals prices slumped
on steel demand and tariff concerns, while Nikkei 225 was the worst performer
and briefly fell over 1000 points as selling pressure was magnified by a firmer
JPY.
Elsewhere, Hang Seng and Shanghai Comp conformed to the
sell-off as Chinese stocks felt the pinch from the US trade offensive, while
the PBOC refrained from open market operations for a net weekly drain of CNY
320 bln.
European stocks were
suffering heavy losses across the board with the Euro Stoxx-600 was down by
almost 1.47% hitting its lowest point since August 2017, continuing to remain
hampered by the risk-off sentiment seen in US and Asia, after US announced $50 bln
tariffs on China triggering a retaliation of $3 bln on US imports.
Taking a closer look at
sectors, materials and industrials were lagging behind due to their vast
exposure to the Chinese market and are immediately followed by IT, financials
and consumer discretionary. Also, a higher EURUSD has affected the EU market
sentiment on Friday.
SGX-NF
BNF
SPX-500
USDJPY
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