Technical & Macro Analysis Of Indian & Global Market----: Market Mantra (Nifty Fut/Bank Nifty Fut/USDINR/SPX-500): 04/09/2018

The Indian market was under stress Monday on a controversial old SEBI (April) circular regarding NRI investment in FPI entity, which was re-circulated recently. The government may be targeting the NRI investment in the FPI category as a round-tripping of Indian black money into the stock market and a part of its “surgical strike” against “corruption, unaccounted money”. The market and Rupee tumbled on the fear of fund outflow. Overall, around $75B of NRI funds may be involved in India related investments.

As per various Indian origin fund managers/market participants managing India oriented fund, it will be very tough to invest as per the new SEBI circular and may affect fund flows. Subsequently, Indian 10Y bond yields soared to a milestone high of 8.019% and USDINR also jumped. The Indian Rupee was already under pressure on EM currency turmoil and oil CAD issue. The market is now expecting withdrawal of the SEBI FPI circular or postponement further beyond 31^st Dec’2018. But the big question is whether the Indian government blinks or not, considering forthcoming general election and record high stock market.

Updated: 09:05

Nifty-SGX-NF: 11629 (+6; +0.05%)

Bank Nifty-BNF: 27976 (+14; +0.05%)

SPX-500: 2906 (+4.00; +0.13%)

Fut-I (Key Technical Levels)

Support for NF:

11600/11580*-11540/11500-11460/11425-11400/11350

Resistance to NF:

11670/11690*-11725/11775-11800/11820-11850/11900

Support for BNF:

27825*/27700-27500/27400-27200/26950-26800/26600

Resistance to BNF:

28100*/28200-28350/28450-28550/28685-28800/29050

Support for USDINR-I:

70.75/70.40-70.10/69.90-69.65/69.35-69.05/68.85

Resistance to USDINR-I:

71.50/71.80-72.00/72.25-72.55/72.75-73.00/73.25

Support for SPX-500:

2880*/2860-2845/2830-2810/2800-2790/2770

Resistance to SPX-500:

2910/2925*-2940/2960-2990/3010-3035/3070

Technical View (Nifty, Bank Nifty, USDINR-I, SPX-500):

Technically, Nifty Fut-I (NF) has to sustain over 11690 for a further rally to 11725/11775-11800/11820-11850/11900 in the near term (under bullish case scenario).

On the flip side, sustaining below 11670-11650 NF may fall to 11600/11580-11540/11500-11460/11425 in the near term (under bear case scenario).

Technically, Bank Nifty Fut-I (BNF) has to sustain over 28100 for a further rally to 28200/28350-28450/28550-28685/28800 in the near term (under bullish case scenario).

On the flip side, sustaining below 28050 BNF may fall to 27825/27700-27500/27400-27200/26950 in the near term (under bear case scenario).

Technically, USDINR-I has to sustain over 70.85 for a further rally to 71.50/71.80-72.00/72.25-72.55/72.75 in the near term (under bullish case scenario).

On the flip side, sustaining below 70.75, USDINR-I may fall to 70.40-70.10/69.90-69.65/69.35-69.05/68.85 in the near term (under bear case scenario).

Technically, SPX-500 has to sustain over 2925 for a further rally to 2940/2960-2990/3010-3035/3070 in the near term (under bullish case scenario).

On the flip side, sustaining below 2915-2905 SPX-500 may fall to 2880/2860-2845/2830-2810/2800 in the near term (under bear case scenario).

Valuation metrics:

Nifty-50: 11545; Q4FY18 EPS: 402; Q4FY18 PE: 28.72; Avg FWD PE: 20; Proj FY-19 EPS: 425; Proj Fair Value: 8500

Bank Nifty: 27640; Q4FY18 EPS: 519; Q4FY18 PE: 53.25; Avg FWD PE: 20; Proj FY-19 EPS: 961; Proj Fair Value: 19220

SPX-500: 2901; TTM Q4-2017 EPS: 111; TTM PE: 26.14

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