*Market Wrap* <https://www.iforex.in/news>: <https://www.iforex.in/news>
22/12/2017 (17:00)
NSE-NF (Dec):10505 (+43; +0.41%)
(TTM PE: 26.84; Abv 2-SD of 25; TTM Q1FY18 EPS: 391; NS: 10493; Avg PE:
20; Proj FY-18 EPS: 418; Proj Fair Value: 8360)
NSE-BNF (Nov):25676 (+55; +0.21%)
(TTM PE: 29.58; Near 3-SD of 30; TTM Q1FY18 EPS: 867; BNS: 25649; Avg
PE: 20; Proj FY-18 EPS: 961; Proj Fair Value: 19220)
*For 26/12/2017: Dec-Fut*
*Key support for NF: 10425/10375-10315/10250*
*Key resistance for NF: 10525/10550-10600/10640*
*Key support for BNF: 25600/25400-25200/24950*
*Key resistance for BNF: 25775/25875-26050/26200*
*Trading Idea (Positional):*
*Technically,*Nifty Fut-Dec (NF) has to sustain over 10550 area for
further rally towards 10600/10640- 10695 & 10745-10795 zone in the short
term (under bullish case scenario).
*On the flip side,*sustaining below 10525 area, NF may fall towards
10490/10425-10375/10315 & 10250-10190 zone in the short term (under bear
case scenario).
*Technically,*Bank Nifty-Fut (BNF) has to sustain over 25775 area for
further rally towards 25875- 26050 & 26200-26325 zone in the near term
(under bullish case scenario).
*On the flip side,*sustaining below 25725 area, BNF may fall towards
25600/25400-25200/24950 & 24850-24700 area in the near term (under bear
case scenario).
*Indian market*
<https://www.iforex.in/analysis/nifty-jumped-another-milestone-high-imf-optimism-about-indian-economy-47083>(Nifty
Fut-Dec/India-50) today (22^nd Dec) closed around 10505, soared by
almost 43 points (+0.41%) and made an opening session low of 10456 and
late day high of 10515 as “Santa Rally” extended on the X-Mas weekend;
Nifty spot made a fresh life time high of 10501 and made a fresh life
time high today in line with “global trend” of “Goldilocks rally”.
*Indian Market Celebrates X-Mas By Another Milestone High:*
Indian market today opened around 10460, almost flat *on positive
Global/Asian cues*
<https://www.iforex.in/news/europe-set-trade-mixed-positive-global-cues-renewed-catalan-tensions-47023>
and domestic optimism about Govt’s fiscal stimulus to revive the rural
economy after disappointing result in the recent GJ election, where
rural voters has basically shunned the Govt/BJP for un/under employment
issues and DeMo & GST blues.
Market lost some momentum on soft EU market opening today but soon
gained strength on optimistic outlook for the Indian economy in 2018 by
IMF & Govt assurance that there will be no closure of any stressed PSB
and recaps plans are on the track.
As par IMF, “DeMo & GST brought short-term pain but long-term benefits;
Expect growth in India to be 6.7% this year (2017) & 7.4% next year
(2018); India not growing as fast as the rest of world is an aberration;
GST is a work in progress but the economy is adjusting to it; See growth
gradually increasing in the next fiscal year; Costs of DeMo are
temporary; See permanent & substantial benefits due to DeMo; Govt has
taken very important first steps to resolve the NPA problem”.
IMF- “IBC has prompted the world bank to raise the ease of doing biz
score of India; PSU banks need more from the Govt in the form of reform;
India has done a lot wrt opening up of foreign direct investment”.
Although IMF is very optimistic, slow pace of resolution of India’s huge
corporate NPA/NPL may be a big headwind and the economy needs to grow by
over 8%, if not in double digit to generate adequate quality jobs to the
vast pool of educated & skilled young work force.
Market gained further momentum & scaled new high after RBI assured that
“reports of closure of PSBS under corrective action are wrong”; Govt
also came forward and clarified that “no question of closing down any
Bank; Govt is strengthening PSBS by Rs.2.11 tln recapitalization plan;
do not believe rumour mongers; Recap, Reforms roadmap for PSBs firmly on
track”.
But market need to justify its extremely stretched valuation in the
coming days as at 10500, Nifty TTM PE is around 26.85 on reported TTM
EPS of 391; this is far high from historical average PE of 20-18 despite
power of liquidity, especially domestic EQ/MF flows.
Previously, market was assuming FY: 18-19 Nifty EPS around 475-525, but
considering the present trend and macro situation, GST & DeMo
spillovers, FY-18 EPS may come around 418 eventually; all eyes will be
now on FY-19 budget & Q3FY18 earnings,
Market may be also in dilemma of fiscal stimulus & deficit in the coming
days amid talks of rural centric budget for FY-19, keeping an eye on the
forthcoming series of state elections in 2018; it will be the last full
fledged budget by the Govt/BJP before going into the early 2019 general
election, which may be also fought closely after encouraging result from
GJ for INC.
A higher Indian bond yields, now hovering around 7.30% and eyeing for
the 7.50% milestone may be also a headwind for the Indian corporates &
economy, being almost 5% higher than US bond yields; cost of funds may
be significantly higher for the Indian corporates not only domestically,
but also for the foreign fund raising amid stressed B/S.
Moreover, US tax reform and cut in corp tax & tax on foreign
assets/profits/repatriation issues may prompt all the other countries
including India to offer similar corp tax package to prevent outflows
and this may also affect the revenue side significantly in the coming
days. Thus fiscal math may also be in disarray coupled with surging Oil
and GST disruptions despite increasing thrust on disinvestments.
Revenue from telecom may be also in pressure, while Govt is planning
another pay bonanza for its employees. Govt has to spend more on its
capex to keep Indian growth story intact as private capex is still
muted; the same is true for private consumption.
Today Nifty was supported mostly by Infy, TCS (renewal of contract with
its US client Nielson and upbeat earnings from Accenture), RIL (analysts
optimism) Bajaj Fin, ONGC (higher Oil), HDFC Bank, SBI, HDFC, Maruti and
L&T by around 44 points altogether, while it was dragged by Ultratech
Cement, IOC, DRL, Tata Steel, VEDL, Indusind Bank, HCL Tech, Lupin, Hero
Motor & Auro Pharma by almost 8 points cumulatively.
Overall, today Indian market was supported by banks & financials, auto,
techs, media, FMCG, reality, consumptions, energies & infra, while it
was dragged by metals, selected pharma, OMC slightly.
BTCUSD:
<https://www.iforex.in/news/bitcoin-plunged-increasing-short-selling-cme-institutions-47069>
USDJPY:
<https://www.iforex.in/news/usdjpy-almost-flat-after-trump-signs-historic-tax-bill-law-47073>
<https://4.bp.blogspot.com/-gTl0L5n8sO4/Wj33B5erBOI/AAAAAAAAOSM/Rl4pW88ZZd8Tu51-6BCCvTWWhZHg5dY-gCLcBGAs/s1600/SGX-NF-PATTERN-22-12-2017.png>
SGX-NF
<https://3.bp.blogspot.com/-lVkL3rBdAgA/Wj33I36J5mI/AAAAAAAAOSQ/SLGTeIR9UC4lCAvT2S6yezuny2BEVQpOgCLcBGAs/s1600/BNF-PATTERN-22-12-2017.png>
BNF
<https://2.bp.blogspot.com/-Az-m-PMcbl8/Wj38gHRVacI/AAAAAAAAOSg/h58dHfg7jjc6uQZgmpuAV8AKqhiZYtf5ACLcBGAs/s1600/BTCUSD-PATTERN-22-12-2017.png>
BTCUSD
--
Thanks & Regards,
Asis Ghosh
--
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