*Market Wrap <https://www.iforex.in/news>*:*08/03/2018*
*
*
*NSE-NF (March):10234 (+62; +0.61%)*
*
*
*NSE-BNF (Jan):24499 (+285; +1.18%)*
*
*
*Valuation metrics:*
*
*
*NS: 10243; Q2FY18 EPS: 407; Q2FY18 PE: 25.17; Avg FWD PE: 20; Proj
FY-18 EPS: 418; Proj Fair Value: 8360*
*
*
*BNS: 24478; Q3FY18 EPS: 821; Q2FY18 PE: 29.81; Avg FWD PE: 20; Proj
FY-18 EPS: 961; Proj Fair Value: 19220*
*
*
*For 09/03/2018:*
*
*
*Updated: 07:25*
*
*
*SGX-NF: 10280; (+46 points@0.45%)*
*
*
*Expected BNF opening: 24610*
*
*
*(Gap-up on positive global cues after symbolic metal tax announcement
by Trump which is seen as less disruptive than earlier thought and an
acceptance of North Korean olive branch by the US for a face to face
dialogue between Trump & Kim by May’18)*
*
*
*March-Fut (Key Technical Levels)*
*Support for NF: 10240/10200-10170/10130 and 10095/10040*
*Resistance for NF: 10310/10350-10395/10435 and 10485/10535*
*Support for BNF: 24500/24200-24000/23850 and 23600/23450*
*Resistance for BNF: 24850/25000-25200/25400 and 25600/25850*
*Technical View (Positional):*
*Technically, Nifty Fut-Jan (NF) has to sustain over 10310 areas for a
further rally towards 10350-10395 and 10435-10485/10535 zones in the
short term (under bullish case scenario). ***
*On the flip side, sustaining below 10295 areas, NF may fall towards
10240-10200 and 10170/10130-10095/10040 zones in the short term (under
bear case scenario).***
*Technically, Bank Nifty-Fut (BNF) has to sustain over 24850 areas for a
further rally towards 25000-25200 and 25400-25600/25850 zones in the
near term (under bullish case scenario).***
*On the flip side, sustaining below 24800 areas, BNF may fall towards
24500-24200 and 24000/23850-23600/23450 zones in the near term (under
bear case scenario).***
*
***
*The Indian market story
<https://www.iforex.in/analysis/nifty-jumped-after-6-day-slumps-hopes-rating-upgrade-fitch-and-rbi-help-banks-their-loosing-bond-portfolio-49847>:*
The Indian market (Nifty Fut-March/India-50)closed around 10234 on
Thursday, jumped by almost 0.61% and well off the day low of 10156 in
late day short covering on hopes of rating upgrade by Fitch and talk of
bond market intervention by the government/RBI.*Overall, global cues
were also
supportive<https://www.iforex.in/analysis/us-stocks-set-open-green-hopes-metal-tariffs-compromise-trump-49821>*in
hopes of less disruptive metal tax plan by Trump.
On Thursday, the Indian market opened around 10217, gap-up on positive
global cues and soon came under selling pressure and succumbed to the
day low amid concern of the widening impact of PNB loan fraud on the
overall banking and lending & borrowing system. The market sentiment was
also affected by increasing legal hurdles in the Bhushan steel auction
at NCLT and tussles between various bidders, secured & unsecured creditors.
Also there was report that the Indian government is again seeking
Parliamentary nod for the unprecedented 4^th time in this financial year
for an additional capex/spending to the tune of Rs.0.85 tln for GST
compensation to the states (Rs.0.63 tln), defense pension (Rs.0.09 tln),
interest payments on CMBS/T-Bills (Rs.0.10 tln). The additional spending
by the government amid muted revenue collection has raised the concern
of fiscal discipline again and the market came into selling pressure.
But the Indian market jumped quite smartly in the last hour of trade and
made the day high of 10277 on comments by the DEA secretary Garg that
they have a “good” meeting with Fitch and expecting a rating upgrade
soon. Garg is also expecting another interim dividend from the RBI in
this month of March (FY-18).
As par finance ministry official, the Indian government is also likely
to buyback/switch GSEC/Govt bonds worth Rs.0.30-0.40 tln in the next
8-10 days, which are due to April redemption. The government is also
aiming to close the FY-18 with a cash balance of around Rs.1.40 tln and
is also looking for more deleverage (monetization of PSU assets) with a
sustainable GDP growth around 7-8% in the coming years.
*RBI may help PSBS by altering the bond category:*
*
*
Also there was another market speculation that the RBI might provide one
time opportunity to the banks to shift their bonds holding from AFS
(available for sale) category to HTM (held to maturity) to avoid huge
MTM provisions (loss) in Q4, especially for the PSBS, which are now
reeling under huge MTM loss due to carnage in the Indian bond market.
Almost 50% of EBITDA came from the bond portfolio and as per some
reports, SBI alone is on huge MTM loss of around Rs.0.04 tln for this
account alone.
This is a great news for the banks, especially for the PSBS (public
sector banks) and they jumped and helped the overall market sentiment on
Thursday late market hours, although it may be a temporary relief
(window dressing of accounts). Indian 10Y bond yield also dropped to
almost 7.655% on this unconfirmed bond market story, which may not solve
the basic headwind of higher bond yields for the economy, banks, and the
stock market.
As par DEA secretary Garg, the Indian government is also exploring ways
to do away differential tax treatment for the FPIs/DIIs and angel
investors in AIF investment (unlisted companies), so that they can raise
funds without going to the bank or bond market, borrowing at exorbitant
rates.
On Thursday, Indian market was helped by banks & financials (bond new
boost up) automakers, media, reality, energies, infra and consumption
stocks while dragged by FMCG, mixed techs (lower USD and renewed analyst
optimism) metals (Trump tax tantrum) and pharma (ongoing US FDA jitters).
*EURUSD
<https://www.iforex.in/news/eurusd-tumbled-draghi-applied-brake-eur-bullet-train-raising-concern-about-ez-inflation-us-protectionism-49835>Story:
<https://www.iforex.in/news/eurusd-spiked-after-ecb-drops-pledge-increase-qe-if-needed-its-policy-statement-49825>*
*USDJPY
<https://www.iforex.in/news/usdjpy-almost-flat-amid-ongoing-trade-war-rhetoric-and-upbeat-gdp-japan-49809>Story:
<https://www.iforex.in/news/usd-got-boost-upbeat-fed-beige-book-wednesday-49811>*
*GBPUSD Story:
<https://www.iforex.in/news/gbpusd-plunged-renewed-concern-trade-war-and-hard-brexit-talk-eus-tusk-49837>*
<https://3.bp.blogspot.com/-vzUXE9Ve-AY/WqIPVMy9O7I/AAAAAAAAPMo/vYlNgFF1MsMEA3aLZgZsn3r2h1GdzCpqgCLcBGAs/s1600/SGX-NF-PATTERN-08-03-2018.png>
*SGX-NF*
<https://2.bp.blogspot.com/-PhdfxoSk9XU/WqIPh-Vf1uI/AAAAAAAAPMs/lImyvKmC91ENVSyVE1GgUYzxmrKAw5E0wCLcBGAs/s1600/BNF-PATTERN-08-03-2018.png>
*BNF*
<https://1.bp.blogspot.com/-vI8XQGiYyKM/WqIPsftokNI/AAAAAAAAPMw/mSxHhGhXQWMfhh2MWtY5MRKnycxqyPZZACLcBGAs/s1600/USDJPY-PATTERN-08-03-2018.png>
*USDJPY*
--
Thanks & Regards,
Asis Ghosh
--
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