*Market Wrap: 11/04/2017 (19:00)*
*NSE-NF (April): 9267 (+58 points; +0.63%)*
*NSE-BNF (April): 21755 (+196 points; +0.91%)*
*IN 10Y G-SEC: 6.808 (-0.83%)*
*USDINR (Apr): 64.65 (-0.06%)*
*For 11/04/2017:*
*Key support for NF: 9235-9170*
*Key resistance for NF: 9275-9315*
*Key support for BNF: 21775-21650*
*Key resistance for BNF: 21875-21975*
*Time & Price action suggests that, Nifty Fut (Apr) has to sustain over
9315 area for further rally towards 9375-9425 & 9465-9505 in the short
term (under bullish case scenario).*
*On the other side, sustaining below 9295/9275 area, NF may fall towards
9235-9170 & 9115-9040 area in the short term (under bear case scenario).*
*Similarly, BNF has to sustain over 21825 area for further rally towards
21875-21975 & 22050-22150 area in the near term (under bullish case
scenario).*
*On the other side, sustaining below 21775 area, BNF may fall towards
21650-21550 & 21450-21340 area in the near term (under bear case scenario).*
Nifty Fut (Apr) today closed around 9267, rallied by almost 0.91% after
three days of consolidation despite tepid global cues helped by banks &
IT. Indian market today opened slightly gap down on renewed geopolitical
concern involving North Korea (NK) & also Syria. As par unconfirmed
reports, China may be mobilizing huge troops on NK border on
apprehension about any US aggression. Also, it appears that Trump is
pressurizing China to solve the NK issue for a trade deal and if China
does not take any action, then USA will go alone; i.e. may also attack NK.
There was also some renewed political tension in France as an extreme
left wing candidate emerged with the centrist (Macron) and anti EUR
candidate (Li-Pen); although market favourable candidate Macron is
leading in opinion polls, investors may still be on the edge considering
recent Trumpism & Brexit results. Thus, all these ongoing geopolitical
tensions has made the “risk trade” off and smart money is flowing to the
safety of USTSY bonds and some safe heaven currencies, such as JPY;
USDJPY is on the verge of breaking the vital 110-109 level and if its
broken convincingly, then one can expect more “risk off” global trade.
But, Indian market today shrugged off these global concerns ahead of
earning seasons, starting officially with Infy day after tomorrow. After
last few days selling on the back of tepid earning concern and subdued
forecast about global IT spending, Infy saw some short covering today
and closed almost 1.50% higher at around 967*. Looking forward, 930-900
area may be a good technical support for the stock and sustaining above
it, Infy may again rally for 1005-1045 zone in the coming days. On the
flip side, consecutive closing below 900 area for any reason (below
expected result & guidance), Infy may further fall towards 825-790 area
in the short to medium term. *
After making opening minutes low of around 9188 today in NF, market
today recovered a bit on the back of short covering/value buying after
last few days consolidation (fall). But, it again came under some
pressure when SC gave an adverse verdict against power companies
(Tata/Adani power), which may affect their future cash flows. As some of
the power companies like Adani power has significant debt with the
banks, market was again come under some pressure.
But at the fag end of the market, Govt/FM announced formation for a NPA
panel to formulate an effective policy for stressed assets resolution
like quantum of haircuts, OTS , CDR mechanism etc. This has rejuvenated
the banks & the overall market sentiment towards the closing session and
NF made a high of around 9270. Market may be also very optimistic about
Q4FY17 earnings from the PSBS and also very hopeful that despite all the
odds, Govt will continue to support the recapitalization of the banks.
In fact, FM today also reiterated that recapitalization commitments from
the Govt; but also ruled out extensive bail out of the PSBS with tax
payer’s money and advised them to use the capital market route more
predominantly. Although, the Govt is setting up a NPA panel for policy
formulations/modifications for the stressed assets, there are already
such similar policies in the banking system formulated by the RBI over
many years; but perhaps, Govt is revisiting the same considering some
recent controversies about haircut & OTS amount, so that PSBS authority
may take some decisions to resolve a NPA without any fear/black lash in
future from any Govt investigation agency.
Midcaps also supported the market today outperforming it as usually; but
overall valuations of the midcaps may be now very expensive and as par
some analysts, it may be now in a bubble zone. Some of the small caps
banks, such as KTK & DCB bank also surged today by around 10% on M&A
hopes as consolidation in Indian banking space may now be imminent.
<https://4.bp.blogspot.com/-uCnveUUiAf4/WOzogqOYKvI/AAAAAAAALSc/huF_xVUWldMg-9QVZ_yIBBfZgxQCjX2vwCLcB/s1600/SGX-NF-PATTERN-11-04-2017.png>
SGX-NF
<https://1.bp.blogspot.com/-xsoyNPxWv6I/WOzojln-jQI/AAAAAAAALSg/yRjwHk4ZSN0Hma5v4rhJid5fIhKE-f8CgCLcB/s1600/BNF-PATTERN-11-04-2017.png>
BNF
--
Thanks & Regards,
Asis Ghosh
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