Market Wrap <https://www.iforex.in/news>: 05/02/2018 (17:00)
NSE-NF (Feb):10705 (-51; -0.47%)
(NS: 10666; Q2FY18 EPS: 391; Q2FY18 PE: 27.28; Abv 2-SD of 25; Avg FWD
PE: 20; Proj FY-18 EPS: 418; Proj Fair Value: 8360)
NSE-BNF (Jan):26214 (-290; -1.09%)
(BNS: 26099; Q2FY18 EPS: 867; Q2FY18 PE: 30.10; Abv 3-SD of 30; Avg FWD
PE: 20; Proj FY-18 EPS: 961; Proj Fair Value: 19220)
*For 05/02/2018: Feb-Fut (Key Technical Levels)*
*Updated: 07:15 (SGX-NF: 10350); -355 points*
Support for NF: 10280/10240-10150/10115
Resistance for NF: 10450/10480-10530/10585
Support for BNF: 25250/25100-24800/24500
Resistance for BNF: 25400/25500-25650/25950
*Trading Idea (Positional):*
Technically, Nifty Fut-Jan (NF) has to sustain over 10480 area for
further rally towards 10530/10585-10625/10665 & 10755-10815 zone in the
short term (under bullish case scenario).
On the flip side, sustaining below 10450-10415 area, NF may fall towards
10340/10280-10240/1050 & 10115-10035 zone in the short term (under bear
case scenario).
Technically, Bank Nifty-Fut (BNF) has to sustain over 25500 area for
further rally towards 25650/25950-26100/26250 & 26400-26650 zone in the
near term (under bullish case scenario).
On the flip side, sustaining below 25450-25400 area, BNF may fall
towards 25250/25100-24800/24500 & 24350-23850 area in the near term
(under bear case scenario).
Indian market
<https://www.iforex.in/analysis/nifty-skids-negative-global-cues-amid-routs-bonds-and-worries-about-indian-macros-ltcgt-48761>(Nifty
Fut-Feb/India-50) today (5^th Feb)closed around 10705, skids almost 51
points (-0.47%) onnegative global cues
<https://www.iforex.in/news/europe-may-be-stress-negative-global-cues-higher-bond-yields-48713>and
domestic worries about Indian macros & impact of LTCGT (long term
capital gain tax) on the overall market.
But Indian market also made a smarty recovery after making an opening
minutes low of 10606 amid clarification of LTCGT by the CBDT (central
board of direct taxes) and improvement in Service PMI, coupled withsome
rebound in regional China & Hong-Kong market
<https://www.iforex.in/news/asia-plunged-amid-ongoing-bond-routs-china-bucked-trend-rumour-state-support-48739>and
made a high of 10722; it opened around 10629 today, gap down by almost
112 points on subdued global cues; mid/small caps also rebounded and
closed almost flat on bargain hunting. Indian Service PMI (Jan) came as
51.7 vs 50.9 (prior): Composite PMI at 52.5 vs 53 (prior).
Regarding LTCGT, it now seems that unavailability of inflation
indexation benefit has shocked the Indian market coupled with STT and
government is also in no mood to relent as it would be eventually
applicable to the HNI & institutions (DII/FII/corporates) and not on the
“Aam Admi” (common people/small retail investors), who matters most in
the vote politics for any political party in India, including BJP.
Overall, market sentiment today was also supported by reports that RBI
may transfer additional Rs.0.13 tln more by way of dividend by March’18
contrary to earlier report; RBI may also hike FPI limits in Gilt
investment from April’18.
Some fall in oil also helped the market:
But market was also anxious about oil;althoughoil is now also correcting
<https://www.iforex.in/news/oil-stress-irans-dovish-jawboning-nfp-recovery-usd-48745>and
there is fall in the physical crude oil market, government may be
compelled to cut excise duties if Brent prices breach comfort level (say
$75).
Also, Indian 10YGSEC bond yield is still hovering above 7.60% on concern
of fiscal deficit breach, inflation & a hawkish hold by RBI tomorrow;
government is likely to sell additional bonds of Rs.0.11 tln at this
week’s auctions.
Government is also trying its best by assuring market repeatedly about
its commitment to bring down the fiscal deficit to 3% by FY: 20-21 & &
debt to GDP ratio to 40% by FY: 24-25; but market is still not convinced.
Today, market sentiment was also supported by Moody’s positive
commentaries about India: “FY19 Budget Balances Growth, Fiscal
Consolidation; FY19 Budget Measures Credit Positive for Most Indian Cos;
India Insurance Market to Benefit from Launch of Health Plan; Merger of
3 PSU Insurers to Benefit Indian Insurance Market”.
Although, “Modicare” is a long pending aspiration for Indian “Aam Admi”
and it’s great, but implementation may be also a big challenge for India.
Market may be also concerned about MSME NPA after the fiasco about
corporate NPA; government may be also planning a bailout packages for
the MESE which will be fiscally imprudent.
Today Nifty was supported by Tata Motors (upbeat earnings from domestic
operations), ITC (no fresh cess/tax on cigarettes in the budget), Bharti
Airtel, Bosch (upbeat guidance & improvement in EBITDA margin), HPCL,
Maruti, Power Grid, Bharti Infratel, Tech-M & Sun Pharma by almost 40
points altogether.
Nifty was dragged by HDFC, HDFC Bank, L&T, ICICI Bank, TCS, Indusind
Bank, Kotak Bank, VEDL, Adani Ports & Bajaj Fin by around 107 points
cumulatively.
Overall, today Indian market was helped by auto makers (mixed sales for
Jan & decent report card and thrust on rural economy in the budget),
pharma, mixed techs (higher USDINR), PSBS, while dragged by private
banks & financials, metals, reality, energies, infra & consumption stocks.
Sugar stocks were upbeat today on reports of 100% import duty by the
government to support the sector from falling prices and ensure timely
payment to the cane farmers; but these are all helping food inflation also.
BTCUSD View
<https://www.iforex.in/news/bitcoin-plummeted-below-8k-renewed-concern-china-regulatory-crackdown-ban-credit-cards-various-banks-crypto-transactions-48731>:
<https://1.bp.blogspot.com/-qeL_ShRwV1E/WnknIhjCYhI/AAAAAAAAOvU/LoR-sHsfixESclMc46isxFTRuP7u-21OwCLcBGAs/s1600/SGX-NF-PATTERN-05-02-2018.png>
SGX-NF
<https://1.bp.blogspot.com/-50ogmEJkB4M/WnknaBG5GzI/AAAAAAAAOvY/fohXtmuT1lUc544bJrwLSrkjMk5cXvjvwCLcBGAs/s1600/BNF-PATTERN-05-02-2018.png>
BNF
<https://4.bp.blogspot.com/-5Bmul3l5U1w/WnkndNd93cI/AAAAAAAAOvc/V86yuFHgSX4oY6LoXYYKv6T5pzsv_t5RwCLcBGAs/s1600/SPX-500-PATTERN-05-02-2018.png>
SPX-500
--
Thanks & Regards,
Asis Ghosh
--
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