*Market Wrap* <https://www.iforex.in/news>: 25/01/2018 (17:00)
NSE-NF (Feb):11060 (-0.45; -0.41%)
(NS: 11070; TTM Q2FY18 EPS: 391 TTM Q2FY18 PE: 28.31; Abv 2-SD of 25;
Avg FWD PE: 20; Proj FY-18 EPS: 418; Proj Fair Value: 8360)
NSE-BNF (Jan):27331 (-158; -0.58%)
(BNS: 27446; TTM Q2FY18 EPS: 867; TTM Q2FY18 PE: 31.66; Abv 3-SD of 30;
Avg FWD PE: 20; Proj FY-18 EPS: 961; Proj Fair Value: 19220)
*For 29/01/2018: Feb-Fut*
*Key support for NF: 11020/10950-10900/10840*
*Key resistance for NF: 11135/11175-11215/11260*
*Key support for BNF: 27300/27050-26800/26600*
*Key resistance for BNF: 27650/27825-28075/28405*
*Trading Idea (Positional):*
*Technically,*Nifty Fut-Jan (NF) has to sustain over 11135 area for
further rally towards 11175-11215 & 11260-11315 zone in the short term
(under bullish case scenario).
*On the flip side,*sustaining below 11115 area, NF may fall towards
11070/11020-10950/10900 & 10840-10790 zone in the short term (under bear
case scenario).
*Technically,*Bank Nifty-Fut (BNF) has to sustain over 27650 area for
further rally towards 27750-27825 & 28075-28405 zone in the near term
(under bullish case scenario).
*On the flip side,*sustaining below 27600-27500 area, BNF may fall
towards 27300-27050 & 26800-26600 area in the near term (under bear case
scenario).
Indian market
<https://www.iforex.in/analysis/nifty-edged-down-rbi-denial-additional-dividend-disappointment-over-psbs-recpas-48357>
(Nifty Fut-Feb/India-50) today (25^th Jan) closed around 11060, slumped
by almost 45 points (-0.41%) after making a mid-session low of 11025 and
an opening session high of 11126. Nifty spot edged down by 0.15% on
renewed concern of fiscal discipline after RBI reportedly declined
additional dividend; Government source also confirmed that “due to
closure of Govt books of accounts for FY-18, there is no provision for
additional income/dividend from RBI”.
Also, below expected PSBS recaps (smaller amount for well managed big
PSBS like SBI and bigger amount for fragile small PSBS like IDBI Bank)
along with various tough caveats/conditions for structural reforms have
dampened the sentiment. But market recovered later on budget optimism,
although selling was quite visible in mid/small caps on MF regulatory
restructuring.
Market was also in pressure on upward trajectory of Brent crude oil,
hovering above the $70 mark and along with it, reports of no additional
dividend by the Govt, Indian 10YGSEC bond yields jumped by 0.43% and
closed around 7.31% on concern of fiscal discipline; consequently Public
sector banks (PSBS) came under renewed pressure; overall global cues
were also negative
<https://www.iforex.in/news/europe-may-be-pressure-muted-global-cues-slump-usd-48313>
on lower USD & concern of trade war.
<https://www.iforex.in/news/asia-slumped-lower-usd-concern-trade-war-48323>
But, Nifty closed the Jan series with blockbuster gain of 5.65%, at
multi-month high on global euphoria of similar trend in equities coupled
with domestic optimism about earnings recovery, a market friendly budget
based on reforms & not on political populism, PSBS recaps & a quick NPA
resolution and hopes of fiscal consolidation.
*Market may be disappointed over 1st tranche of PSBS recaps:*
The latest PSBS recaps injection through a combination of non-SLR bonds
& cash were just one step in the long process to clean up India's bad
debt, and that the lenders' final capital position will also depend on
how they undertake the central bank's directive to take nearly 40 large
corporate loan defaulters to bankruptcy proceedings, which will likely
involve haircuts on their loans; the current recaps amount may be too
little & too late, although rating agencies has termed it credit
positive for the PSBS.
Both Moody’s and S&P termed capital for Indian banks is a step towards
stronger balance sheets; India's capital infusion into PSU banks is
credit positive.
As par some trial balloon, for FY-19 budget, infra spending may rise
nearly 25% to about Rs. 5 tln in 2018-19; power, roads & highways,
renewable energy may get spending fillip; expect hike on
electricity-for-all scheme ‘Saubhagya Yojna’; expect tax rationalization
for infrastructure investment trusts and personal income tax for middle
class group; corporate tax may not be tinkered too much this year.
After market hours, Government announced an upbeat revenue collection
figure of GST for Dec’17 at Rs.0.87 tln, which may be a positive
surprise, considering tax rate revisions.
Today Nifty was helped mostly by ICICI Bank, HDFC Bank, VEDL, L&T, Axis
Bank, IBULLS HSG, Kotak Bank, IOC, Ultratech Cement & Indusind Bank by
around 30 points cumulatively (top ten contributors).
Nifty was mostly dragged by SBI, TCS, UPL, Adani Ports, Maruti, Infy,
Bajaj Fin, Auro Pharma, Hero Motors & Tata Motors by almost 38 points
altogether (top ten draggers).
Overall, Indian market today was supported by Private Banks
(disappointed recaps for large PSBS will help private banks to capture
more corporate lending share), financials, metals (higher metal prices
on slump in USD), while dragged by PSBS, auto makers, FMCG, techs,
media, pharma, reality, infra, energies & consumption stocks.
Overall Q4 report card till day may be also mixed and not a great
surprise to justify the lofty valuation.
GBPUSD View
<https://www.iforex.in/analysis/gbpusd-edged-hopes-soft-brexit-plunge-dollar-48331>:
EURUSD View
<https://www.iforex.in/news/eurusd-surged-draghi-sounds-less-dovish-expected-48339>:
BTCUSD View
<https://www.iforex.in/news/bitcoin-almost-flat-world-listens-leaders-davos-about-crypto-48341>:
USDJPY View
<https://www.iforex.in/news/usdjpy-back-foot-amid-concern-currency-war-48351>:
<https://3.bp.blogspot.com/-lnLGQtR-4nU/WmqpWAMW96I/AAAAAAAAOow/EVJpv_qNBkcibyk-5FFLKPXurMXR8fLKgCLcBGAs/s1600/SGX-NF-PATTERN-25-01-2018.png>
SGX-NF
<https://1.bp.blogspot.com/-islR371D1AU/WmqpZJea-pI/AAAAAAAAOo0/mjRT_ijFhIU2Jl4lM0P9Hun3P31QgyQ1gCLcBGAs/s1600/BNF-PATTERN-25-01-2018.png>
BNF
<https://1.bp.blogspot.com/-2MVnO8nFtoA/WmqpdLgHifI/AAAAAAAAOo4/kiv-BWU5DfYrA2kdMxFC4Ugds35A7RzrwCLcBGAs/s1600/USDJPY-PATTERN-25-01-2018.png>
USDJPY
--
Thanks & Regards,
Asis Ghosh
--
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