Sunday, 10 December 2017

Nifty Jumped On Global Santa Rally & Hopes For A Convincing BJP Win In GJ



Market Wrap: 08/12/2017 (17:00)

NSE-NF (Dec):10290 (+87; +0.85%) 

(TTM PE: 26.26; Abv 2-SD of 25; TTM Q1FY18 EPS: 391; NS: 10266; Avg PE: 20; Proj FY-18 EPS: 418; Proj Fair Value: 8360)

NSE-BNF (Nov):25368 (+196; +0.78%) 

(TTM PE: 29.21; Near 3-SD of 30; TTM Q1FY18 EPS: 867; BNS: 25321; Avg PE: 20; Proj FY-18 EPS: 961; Proj Fair Value: 19220)

For 11/12/2017: Dec-Fut

Key support for NF: 10295-10240/10190

Key resistance for NF: 10325/10350-10395/10425

Key support for BNF: 25200-25100/24850

Key resistance for BNF: 25550-25750/25875

Trading Idea (Positional):

Technically, Nifty Fut-Dec (NF) has to sustain over 10350 area for further rally towards 10395/10425-10475 & 10535-10575 zone in the short term (under bullish case scenario). 

On the flip side, sustaining below 10325-10295 area, NF may fall towards 10240-10190 & 10150-10100 zone in the short term (under bear case scenario).

Technically, Bank Nifty-Fut (BNF) has to sustain over 25550 area for further rally towards 25750-25875 & 26050-26200 zone in the near term (under bullish case scenario).

On the flip side, sustaining below 25500 area, BNF may fall towards 25200-25100 & 24850 & 24750-24650 area in the near term (under bear case scenario).

Indian market (Nifty-Fut/India-50) today (8th Dec) closed around 10290, surged by another 87 points (+0.85%) on positive global cues and better prospect of BJP/Modi in GJ after sudden change of stance by the “Patidar” community (Hardik) towards INC and change of sentiment in favour of NAMO/BJP after the “Neech” (low) political comments controversy by Ayer of INC; Nifty-Fut made an opening minutes low of 10211 and closing session high of 10298 today.

Although, BJP may not get the magic number of 150 in GJ this time, but anything above 120 may be good for BJP & the market (political stability & reform agenda/policy continuity), while anything below 100 may prove disastrous on political populism by the Govt/BJP in future, shaky on further structural reform.

An election is an “election”, full of uncertainty and thus nothing is final until the result. As par unofficial betting circle, BJP may get around 100 seats this time vs 115 prior, while INC may win in 70 seats vs 60 prior. By last two day’s smart rally, BJP’s 100 odd seats probability may have also discounted to a large extent and thus anything above 120-150 seats will cause additional market rally & vice-versa.

Fall of Oil from the recent top of $59 (WTI) to $55-56 now may be also helping Indian market sentiment to some extent as the country imports almost 80% of its oil requirement from overseas. Automakers are upbeat on prospect of price hike in 2018 and also helping the overall market.

Meanwhile, Nomura is very upbeat about prospect of Indian economy & market in 2018 (+17%) on story of solid Indian consumption, hopes of pick up in private capex cycle, double digit EPS growth, benefits of GST, IBC and Govt capex/infra spending while concerned on any derailment of current Govt policies (reform agenda on political populism ahead of 2019 general election); Nifty target is 11880 by Dec’2018.

As par Nomura, “Indian Business is on the cusp of an up cycle, which will drive strong earnings growth as corporate earnings-to-GDP ratio is at its lows, with significant contraction in margins and return on equity; This is also supported by stable macro fundamentals and clean-up in the system in terms of stressed assets and unprofitable players”.

Thus, India may be also embarking on Chinese style “mini-deleveraging” and trying to avoid a future “boom & burst” credit fuelled bubble.

Apart from positive Asian markets, an upbeat opening session of EU market because of Basel-III optimism (requirement of less than estimated provisions & capital buffer) may have also helped the Indian market sentiment today.

Domestic Retail Liquidity Support Growing For Indian Market:

Meanwhile as par reports, net investments into equity mutual funds in Nov amounted to almost Rs.0.20 tln the second highest monthly inflow ever; with the help of Nov investment figures, the net inflow into equity schemes of mutual funds for the current fiscal crossed Rs.1 tln for the first time in a financial year.

Power of liquidity by DII/MF may be the one of the primary reasons behind the huge rally in the Indian market, especially after DeMo.Net Direct tax collection also jumped almost 14% in Apr-Nov’17 to Rs.4.8 tln, almost 49% of total budget estimate of FY-18 (Rs.9.8 tln).

After market hours, Indian Bank loan growths came as encouraging at 9.6% vs 8.6% prior; although RBI’s latest report on bank loan growth may have also boosted the sentiment of the market to some extent, Indian household debts, especially unsecured debt is rising quite significantly in lieu of corporate/business loan; on the other side household income is quite stagnated over the last few years.

But various procedural hurdles, lack of sufficient & eligible bidders with various ambiguities over IBC rules may also delay the overall resolution (take over) process of the NPA/NPL.
Also, selective recaps of the PSBS with various caveats coupled with lack of eligible & quality corporate/business borrowers with a viable project, willing to borrow from Indian Banks at high real rate of interest and then face the process of IBC for default (including guarantors) may be also some of the serious headwinds for expected growth corporate lending & revival of private capex.

Today Nifty was helped mostly by ITC, IOC, HDFC Bank, HDFC, ICICI Bank, Tata Motors, HUL, HPCL, Maruti & VEDL by almost 86 points cumulatively.

Nifty was dragged mostly by RIL, Bharti Infratel, SBI, ZEEL, TCS, Gail, Bosch, Asian Paints, Hero Motors & DRL by around 22 points altogether.

Overall, Indian market was today supported by Pvt Banks & Financials, Auto, FMCG, Metals (encouraging China trade data), Pharma, Reality, Consumer Staples, OMC & Infra, while dragged by media, PSBS and energies to some extent.

GOLD:

BTCUSD:  

USDJPY:

GBPUSD:

GBP: 



SGX-NF


BNF


GOLD

Friday, 8 December 2017

Nifty Set To Surge On Positive Global Cues & NAMO Optimism In GJ Election



Market Mantra: 08/12/2017 (09:00)

SGX-NF: 10215 (+8)

For the Day: updated: 13:15

For 08/12/2017: Dec-Fut

Key support for NF: 10205-10150/10100

Key resistance for NF: 10275-10325/10385

Key support for BNF: 25100-24850/24750

Key resistance for BNF: 25250-25500/25750

Trading Idea (Positional):

Technically, Nifty Fut-Dec (NF) has to sustain over 10325 area for further rally towards 10345/10385- 10435 & 10475-10535 zone in the short term (under bullish case scenario). 

On the flip side, sustaining below 10300-10275 area, NF may fall towards 10205-10150 & 10100-10040 zone in the short term (under bear case scenario).

Technically, Bank Nifty-Fut (BNF) has to sustain over 25500 area for further rally towards 25750-25875 & 26050-26200 zone in the near term (under bullish case scenario).

On the flip side, sustaining below 25450-25400 area, BNF may fall towards 25100-24850 & 24750-24600 area in the near term (under bear case scenario).

As par early SGX indication, Nifty Fut (Dec) may open around 10215, almost unchanged on positive Global/Asian Cues & renewed NAMO optimism in GJ election after some setback for RAGA from “Patidar” community & “Neech” Politics.

USD trading higher after US Senate votes to pass the stopgap spending bill to avert a potential shut down drama this week; it will be effective till 22nd Dec and both RNC & DNC will resume their negotiations for a longer term debt shut down solution (two years budget deal); but immigration, tax legislation & Obamacare/Trumpcare issues may also hinder such bipartisan budget deal.

All eyes will be now on today’s US NFP and final version of the tax bill & structure of corp tax cut after reconciliation of Senate & House/RNC version, scheduled to be released on 22nd Dec.

Overnight US market closed in positive after on “no Govt shut down” optimism coupled with hopes of a market friendly final US tax reform version after WH indicated the lowest possible corp tax rate; market was further helped by techs, industrials & materials as AMT may not be in the final tax version as earlier feared; energies also helped on some rebound in oil amid threat of Nigerian strike.

DJ-30 rose 0.29%, S&P-500 also gained 0.29% and closed around 2637, while NQ-100 surged by almost 0.54% on bargain hunting of tech/FANG stocks; consumer discretionary also helped along with earnings/guidance boost from some leading retail names. But City dropped on concern of huge repatriation tax and Lending Club tumbled 15% on muted earnings & guidance.

US index future (SPX-500) is now trading around 2642, edged up further by almost 0.10% on positive Asian cues after an upbeat China trade and JP GDP data and higher USD, positive for Asian exporters.

In China exports for Nov grew at 12.3% vs est 5%; prior: 6.9%; imports grew by 17.7% vs est 11.3%; prior: 17.2%, indicating a robust China economy despite ongoing deleveraging; but overall China export share globally is also steadily decreasing since 2015-16 amid US & global protectionism.

China (SSE) today rebounds by almost 0.59% on better than expected trade data after yesterday’s plunge led by increasing regulatory supervision, higher margins for commodity trading and muted economic outlook and concern of NPL by Fitch & IMF. 

Similarly, HK surged by around 0.90% on China optimism & rebounds in techs & reality. PBOC today was neutral in cash injection and effectively drains out 510 bln Yuan this week vs 408 bln last week China bond yield is now hovering around 3.91% slightly lower than panic level of 4%.

Although JP GDP looks blockbuster at a glance, the sudden surge in GDP may be a result of lower deflator (0.1%) and most importantly private consumption was also tepid (-0.5%); but business spending helped (+1.1%). Thus despite a higher GDP headline, Yen got weaker and in turn helping JP exporters/market. Japan (Nikkei-225) today closed 1.39% higher and was also helped by techs & reality.

Overnight EU market closed almost flat in Stoxx-600 (+0.03%) after a volatile session on mixed EU economic data and a flat EUR; market was helped by telecom, utility, financials, while dragged by healthcare & basic materials (China concern); DAX-30 rose by 0.4% on better prospect of “grand coalition Govt”; CAC-40 edged up by 0.20%.

FTSE-100 slumped by 0.40% on exporters/MNC as GBP gone higher on renewed prospect of Irish border & Brexit deal and muted London property price; it was also dragged by miners on concern of China Bank health/NPL report by IMF. But some M&A news in the betting and media sector helped, while energies dragged.

EU market is poised to open in green (+0.50%) today on higher USD; but FTSE may trade almost flat amid Brexit suspense & GBP volatility and China optimism today.

Back to home, Indian market (Nifty Fut/India-50) is now trading around 10265, surged by another 0.60% on positive global cues and better prospect of BJP in GJ after sudden change of stance by the “Patidar” community (Hardik) towards INC and change of sentiment for the “Neech” political comments by Ayer of INC.

But, BJP may not get the magic number of 150 in GJ this time, but anything above 120 may be good for BJP & the market (political stability & reform agenda), while anything below 100 may prove disastrous on political populism in future. An election is an “election”, full of uncertainty and thus nothing is final until the result.

Automakers are upbeat on prospect of price hike in 2018 and also helping the overall market.

Meanwhile, Nomura is very upbeat about prospect of Indian economy & market in 2018 (+17%) on story of solid Indian consumption, hopes of pick up in private capex cycle, double digit EPS growth, benefits of GST, IBC and Govt capex/infra spending while concerned on any derailment of current Govt policies (reform agenda on political populism ahead of 2019 general election).



SGX-NF


 BTCUSD

Nifty Soared On Positive Global Cues & Better Prospect Of BJP In GJ After “Patidar” Gr Revolts Against INC



Market Wrap: 07/12/2017 (17:00)

NSE-NF (Dec):10207 (+138; +1.37%) 

(TTM PE: 26.00; Abv 2-SD of 25; TTM Q1FY18 EPS: 391; NS: 10167; Avg PE: 20; Proj FY-18 EPS: 418; Proj Fair Value: 8360)

NSE-BNF (Nov):25188 (+261; +1.05%) 

(TTM PE: 28.90; Near 3-SD of 30; TTM Q1FY18 EPS: 867; BNS: 25057; Avg PE: 20; Proj FY-18 EPS: 961; Proj Fair Value: 19220)

For 08/12/2017: Dec-Fut

Key support for NF: 10205-10160/10110

Key resistance for NF: 10270-10345/10385

Key support for BNF: 25100-24850/24750

Key resistance for BNF: 25250-25500/25750

Trading Idea (Positional):

Technically, Nifty Fut-Dec (NF) has to sustain over 10270 area for further rally towards 10345-10385 & 10435-10475 zone in the short term (under bullish case scenario). 

On the flip side, sustaining below 10250 area, NF may fall towards 10205-10160 & 10110-10040 zone in the short term (under bear case scenario).

Technically, Bank Nifty-Fut (BNF) has to sustain over 25300 area for further rally towards 25500-25750 & 25875-26050 zone in the near term (under bullish case scenario).

On the flip side, sustaining below 25250 area, BNF may fall towards 25100-24850 & 24750-24600 area in the near term (under bear case scenario).

Indian market (Nifty-Fut/India-50) today (7th Dec) closed around 10207, soared by almost 138 points (+1.37%) tracking positive Global cues and supported by bargain hunting/short covering after almost 3.5% correction from recent top (an expected hawkish hold by RBI yesterday) coupled with sudden brightening prospect of BJP in GJ; it made closing session high of 10218 & an opening minutes low of 10079.

Market today soared further in late trade on reports that 6 “Patidar” groups (caste) oppose INC’s reservation formula in GJ, terming it as “unconstitutional”. GJ is a highly fragmented state on caste & creed (religion); the party which can gain supports of such groups may benefit most in the coming election. In that sense, market is relieved that INC may not get the supports of all the “Patidar” groups as earlier assumed and thus BJP may gain immensely.

After market hours today, GJ political narrative heats up again with some alleged “Neech” (low) comments by a Senior Cong Leader (Ayer) against NAMO and subsequently INC suspended Ayer. As NAMO is immense popular in GJ and was the CM for almost two terms, any personal campaign against NAMO will be bad for INC and after this incident, INC may lose some support, which was built up in the last few months by RAGA as a result of hard campaigning against real issues of DeMo, GST & unemployment blues.

Election outcome from GJ this time may be looked as a verdict for DeMo & GST issues, which in turn will help to shape the future course of structural reforms in India & political landscape.

Now, RBI event is over, Indian market will be driven by global cues & GJ election outcome, PSBS recaps, various trial-balloons related to FY-19 budget proposals before Q3 earnings season arrives. 

Today Nifty was supported mostly by ICICI Bank, Bharti Airtel, Maruti, L&T, Gail, Bharti Infratel, Asian Paints, Infy, UPL & Bosch by almost 55 points cumulatively.

Nifty was dragged mostly by TCS, Wipro, Cipla, Coal India & Sun Pharma by only around 4 points altogether.

Overall, today Indian market was supported by banks & financials, auto, FMCG, mixed techs, media, metals, reality, energies, infra & telecom (buzz of M&A in South Africa), while dragged by selected techs & pharma.






SGX-NF


BNF


WTI