*Market Wrap <https://www.iforex.in/news>*:*09/03/2018*
*NSE-NF (March):10219 (-24; -0.24%)*
*NSE-BNF (Jan):24315 (-193; -0.79%)*
*NS: 10227; Q2FY18 EPS: 410; Q2FY18 PE: 24.94; Avg FWD PE: 20; Proj
FY-18 EPS: 418; Proj Fair Value: 8360*
*BNS: 24296; Q3FY18 EPS: 822; Q2FY18 PE: 29.56; Avg FWD PE: 20; Proj
FY-18 EPS: 961; Proj Fair Value: 19220*
*SGX-NF: 10325; (+106 firstname.lastname@example.org%)*
*Expected BNF opening: 24570 (+1.05%)*
*(Gap-up on positive global cues after mixed andGoldilocks US NFP job
data on Friday
which is good for the stocks, although not so much good for the USD amid
subdued wage growth)*
*March-Fut (Key Technical Levels)*
*Support for NF: 10300/10235-10180/10130 and 10095/10040*
*Resistance for NF: 10375/10425-10465/10505 and 10545/10595*
*Support for BNF: 24500/24200-24000/23850 and 23600/23450*
*Resistance for BNF: 24900/25100-25250/25400 and 25600/25800*
*Technical View (Positional):*
*Technically, Nifty Fut-Jan (NF) has to sustain over 10375 areas for a
further rally towards 10425-10465 and 10505-10545/10595 zones in the
short term (under bullish case scenario). ***
*On the flip side, sustaining below 10355 areas, NF may fall towards
10300-10235 and 10180/10130-10095/10040 zones in the short term (under
bear case scenario).***
*Technically, Bank Nifty-Fut (BNF) has to sustain over 24900 areas for a
further rally towards 25100/25250-25400/25600 and 25800-26050 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 on 09/03/2018:*
Fut-March/India-50)closed around 10219 on Friday, slipped by almost
0.24% in last hour of intense selling after news that SFIO has summoned
two former SBI chairmen in connection with the ongoing saga about PNB
“loot” (theft/loan fraud). Nifty future tumbled from the day high of
around 10300 to a low of 10193 as panic gripped the market*despite
supportive global cues on account of North Korean truce*
disruptive metal tax implementation by Trump.
As per reports, two former SBI chairpersons (Bhat and Chaudhari) were
summoned by SFIO (serious fraud investigation office) on the PNB
investigation. SBI, being the largest bank and lender in India, this
news had created some shockwave in the market as market is concerned
that more such summoning in the days ahead not only for the PNB case but
also for other high profile suspected corporate loan fraud cases, which
has turned into an NPA/write-off for the banks, with very little chances
A fewdays ago, SFIO has also summoned India’s two big private banks’
current CEO (ICICI and Axis) in the PNB connection apart from few other
CEOS of PSBS (public sector banks) involved in the PNB-Nirav Modi group
loan fraud issue. SBI’s former CEO Chaudhari was also summoned by SFIO
earlier in another big celebrity loan default (alleged fraud) by KFA
(King Fisher Airlines-Malaya).
As per reports, SFIO summoning to current and former heads of various
banks has started from 4^th March and will continue till 15^th April for
not only the PNB fraud but also for various new and old cases of
suspected frauds and defaults of big amounts. The market is concerned
about the corruption and unholy alliance between Indian banks and the
corporates for the big loan amounts.
Meanwhile, RBI has turned up its gun on the Indian lenders (banks) after
the Rs.12 bln PNB “loot” and various other similar stories across banks.
RBI has asked all the commercial lenders to provide it with details of
all letters of undertaking/credit (LOU/LOC), a form of credit guarantee
at the center of an alleged $2 billion PNB fraud, issued by them in the
past several years since 2011 or earlier.
RBI has asked for details of such LOUs including credit limit
sanctioning mechanism along with collateral securities/margin money.The
Indian regulator (RBI) is also ratcheting up pressure on lenders,
increasing its scrutiny and laying down deadlines for them to fix gaps
in their SWIFT-CBS systems, in the aftermath of the country’s biggest
As per another report on the weekend, all the banks have been asked by
the government/RBI to provide passport details of the borrowers having a
credit limit of above Rs.50 mln (50 crores), so that any big defaulters
could not escape the country after defaulting such as in the PNB, KFA,
Winsome and several other cases.
Althoughall these steps should have been taken by the government/RBI
much earlier, the market is concerned that these will now further create
an atmosphere of trust deficit among lenders as well as the borrowers
and normal lending and borrowing activities of the banks will be
affected severely, which will hamper the economic activity. This had a
negative effect on corporate credit, especially for exporters as bankers
have largely refrained from taking business (lending) decisions.
Also, metal stocks remained under pressure after Trump’s tax tantrum,
although diluted to a great extent at the time of actual implementation.
Indian market may be also under pressure on Trump’s another rhetoric of
“reciprocal taxes”. As par reports, US has already hiked its import
taxes on the Indian shrimps by as much as 300%!!
*Most of the Asian market closed higher on Friday:*
On Friday,Asian stocks closed mostly higher: Japan +0.47%, Hong Kong
+1.11%, China +0.57%, Taiwan +0.38%, Australia +0.34%, Singapore +0.15%,
South Korea +0.92%. Asian markets rallied with China's Shanghai
Composite and Japan's Nikkei Stock Index at 1-week highs after Trump
agreed to meet with North Korean leader Kim.
Asian stocks were higher across the board after the positive lead from
US where on one hand Trump confirmed his 25/10 tax on imported metals
but exempted NAFTA partners and was also said to be open to providing
relief for allies.
In addition, Asia-Pacific risk appetite was further bolstered by
geopolitical developments in which the South Korean National Security
Office chief announced that North Korean Leader Kim is committed to
denuclearization and will refrain from conducting further tests, with
President Trump and North Korea's Kim to meet by May.
ASX 200 and Nikkei 225 were positive but with upside capped by a subdued
commodities sector and weakness across steel names on Trump tariffs,
while KOSPI outperformed on the further appeasement in the Korean
peninsula. Finally, 10Y JGBs were flat with markets focused on riskier
assets and after an uneventful BOJ announcement.
Elsewhere, Hang Seng was underpinned amid the broad positivity in the
region, while China somewhat lagged after PBOC inaction led to a net
weekly drain of CNY 240 bln, while participants also digested US tariffs
alongside mixed Chinese lending and inflation data. The PBOC skipped
open market operations for a net weekly drain of CNY 240bln vs. last
week's CNY 120bln net injection.
Overnight, outgoing PBOC Governor Zhou said China's economy will be less
reliant on quantitative stimulus and that China may reduce reliance on
money supply to boost growth. Responding to Trump's tariffs, China MOF
said it firmly opposes US trade measures and urged the US to withdraw
tariffs on steel and aluminum, while it added it will take strong
measures to safeguard its own interests.
On Friday, overall Indian market was supported by FMCG, techs, media and
consumption stocks to some extent, while it was dragged by banks and
financials, mixed automakers (concern of US duty on Tata motors-JLR),
metals (Trump’s tax rhetoric), pharma, infra and energies, reality to
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