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LKP Securities

Published on 1/04/2020 5:35:49 PM

Closing Bell

Indian Benchmarks End First Day Of FY21 On Gloomy Note

A day after logging healthy gains, Indian equity benchmarks were back in the negative territory and ended with losses of over four percent on Wednesday, as the number of domestic coronavirus cases increased even as a 21-day lockdown remained in force. Domestic stocks started the first day of the fiscal year 2020-21 on lower note, tracking bearish trend from global indices. Traders turned wary with report that the government has missed the collection target for the current financial year from CPSE disinvestment set in the Revised Estimates of Budget by about Rs 14,700 crore. Sentiments also remained dampened with a report showing that the government's fiscal deficit touched 135.2% of the full-year target at February-end mainly due to slower pace of revenue collections.

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ICICI Securities

Published on 1/04/2020 3:25:27 PM

FIIs & DII Action the

*  FIIs sold 3045 crore while DIIs bought 3576 crore in the cash segment. FIIs bought index futures worth 1506 crore while in index options they bought 311 crore. In the stock futures segment, they bought 1256 crore.

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ICICI Securities

Published on 1/04/2020 3:24:03 PM

F&O Highlights

* Front line Indices had a smart pullback after selling pressure was seen in previous sessions. The rally in energy, metals, FMCG and technology lifted the Nifty above 8500 levels. Meanwhile India VIX fell by 11%. We feel upside move likely to continue if its ends above 8700 levels.

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ICICI Securities

Published on 1/04/2020 3:23:29 PM

Index Outlook

Nifty Future:

The Nifty is expected to trade between 8400-8700 levels amid high volatility.

Bank Nifty Future

* On Tuesday, the Bank Nifty relatively underperformed the Nifty. It witnessed upside and moved up 700 points during the session and ended with a gain of 200 points. Recovery was seen in PSU banks as well as HDFC bank whereas selling witnessed in midcap private banks. From the option space, major Put OI at 18500 strike and major Call OI at 20000 strike suggesting it may largely consolidate between these levels. Buy Bank Nifty in the range of 19000-19150, Target: 19400- 19500, Stop loss: 18800

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ICICI Securities

Published on 1/04/2020 3:15:15 PM

Bank Nifty: Strong support for index at 16000

* The Bank Nifty remained significantly volatile and witnessed more than 45% correction during the month on the back of continued selling from FIIs in line with the global markets amid signs of a recession due to the rise in Covid-19 cases across the world. It ended the series down more than 35%. It fell to its three-year lows as selling got exaggerated in leading private banks like HDFC Bank, Axis Bank, IndusInd Bank and Kotak Mahindra Bank

* Despite crude oil prices falling below $25, the rupee depreciated further and moved towards 76 levels against the US dollar, which also triggered negative sentiments

* The Bank Nifty has not only broken down the broadening formation, it has also moved below its long term support. Currently, it is showing sign of exhaustion in the selling pressure as it is trading in the oversold territory

* The recent fall is one of the steepest correction for the Bank Nifty and option writers do not have any significant open interest present in any strike. However, looking at weekly and monthly options data, the major Put base is placed at the 16000, 17000 strikes while the Call OI is distributed from 21000 to 23000 strike. Thus, a move above 21000 is crucial for any meaningful recovery

* The roll activity in the banking index remains low as the new series is starting with just 0.7 million shares and select private sector banks like IndusInd Bank and Bandhan Bank continue to hold high OI in the April series

* The negative stance of FIIs was also visible in their outflows from primary and secondary equity. In March so far, FIIs sold equities worth over | 57000 crore. However, DIIs have bought worth over | 48000 crore so far

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ICICI Securities

Published on 1/04/2020 3:14:40 PM

Nifty witnesses almost 25% decline in March series…

Nifty, broader market indices witness sharp decline in March series

* In the March series, headline indices remained under pressure, tracking a collapse in global equities amid growing concern about the Covid-19 virus impact on the global economy

* The sell-off in the market continued for a sixth consecutive week that ended on March 27. However, losses were shortened, to a large extent, due to short covering seen in the last four days in a row in the expiry week, after the | 1.7 lakh crore package was announced by the FM along with liquidity stimulus package from the RBI, which soothed sentiments

* Global sentiments remained very weak as more cases of Coronavirus are being reported outside China, especially in Europe and the US

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ICICI Securities

Published on 1/04/2020 2:30:09 PM

NSE (Nifty): 8598

Technical Outlook

• The price action formed a bull candle carrying higher high-low, indicating positive bias as buying demand emerged in the vicinity of 50% retracement of last weeks sharp up move (7511 -9039), at 8280

• Going ahead, we expect index to undergo healthy consolidation in the last week’s broad range of 7800-9000 amid stock specific action. We believe ongoing consolidation would help index to form a base and bring some stability in the market. Thereby we advise investors to capitalise any dip from hereon as an incremental buying opportunity, paving the way to challenge the upper band of consolidation of 9000 in coming weeks. Meanwhile, 7800 would continue to act as key support as it is 80% of last weeks sharp up move (7511 -9039), at 7800

• Going ahead key thing to monitor would be progression in containment of the virus (Covid-19) across the global markets which will set the market direction.

• In the coming session, Nifty futures is likely to open on a subdued note tracking mixed global cues. We expect volatility to remain elevated owing to weekly derivative expiry session. However, despite rise in volatility we expect Nifty futures to hold current week’s low (8250) and trade with a positive bias. Hence post gap down opening we advise traders to utilise dip towards 8455 - 8488 should be used to create long position for target of 8575 .

Among market breadth indicators, the net of advance/ declines ratio of the Nifty 500 universe approached its multi year low of - 497 during current corrective phase, indicating extreme oversold condition. Historically, such extremes typically have coincided with significant market bottoms. Therefore, we recommend investors to utilise ongoing volatility to construct long term portfolio of quality stocks in a staggered manner with at least one year time horizon, as Nifty has generated minimum 30% returns in subsequent one year period.

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ICICI Securities

Published on 1/04/2020 2:27:17 PM

Bank Nifty: 19144

Technical Outlook

The Bank Nifty rebounded after previous session decline and closed higher by~2% on Tuesday on back of positive global cues. PSU banking stocks outperformed as the PSU bank index closed higher by 2.3%. The Bank Nifty ended the session at 19144, up by 361 points or 1.9%

Technical Outlook

• The daily price action formed a high wave candle which remained contained inside previous session bear candle signalling consolidation on expected lines. The index on Tuesday session rebounded from the 50% retracement area of the previous four session up move from 16116 to 21462 placed at 18790 levels

• Going ahead in the coming sessions we expect the index to continue with its current consolidation in the broad range of 21000-17000 amid stock specific action with elevated global volatility aiding the index to bring some stability in the market. We believe a retracement towards 17500-17000 (80% retracement of last week’s gains (16116-21445)) should be utilised as an incremental buying opportunity

• Going ahead key thing to monitor would be progression in containment of the virus (Covid 19) which will set the market direction

• In the coming session, the index is likely to open on a negative note on back of weak global cues. We expect the index to sustain above Monday’s low (18676). Hence use intraday dips towards 18750-18800 to create intraday long position for target of 18980 and maintain a stoploss of 18665 for intraday.

Bank Nifty after the sharp decline of the last three months is seen forming base around the major support area of 17000-16000 being the 80% retracement of the entire rally of CY 2016-2019 (13407- 32613)

Among the oscillators the daily 14 periods RSI is sustaining above its nine periods average and is seen consolidating in a range thus supports the overall consolidation trend in the index in the coming sessions

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ICICI Securities

Published on 1/04/2020 2:23:43 PM

Technical Outlook

Equity benchmarks regained upward momentum as Nifty pared Monday’s losses and closed at 8598, up 3.8%. In the coming session, Nifty futures is likely to open on a subdued note tracking mixed global cues. We expect we expect Nifty futures to hold current week’s low (8250) and trade with a positive bias despite elevated volatility owing to weekly derivative expiry session. Hence we advise traders to utilise dip towards 8455 - 8488 to create long position for target of 8575.Going ahead, we expect index to undergo healthy consolidation in the 7800-9000 range amid stock specific action which help index to form a base and bring some stability in the market. Thereby we advise investors to capitalise any dip from hereon as an incremental buying opportunity, paving the way to challenge the upper band of consolidation of 9000 in coming weeks. Meanwhile, 7800 would continue to act as key support as it is 80% of last week’s sharp up move (7511 -9039), at 7800.

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LKP Securities

Published on 1/04/2020 1:50:14 PM

MIDDAY REVIEW

Bourses Remain Weak On First Day Of New Fiscal Year 

Indian equity benchmarks remained weak on the first day of new fiscal year. Domestic sentiments were cautious, as the RBI’s data report showed that Non-food bank credit growth decelerated to 7.3 per cent in February 2020 from 13.2 per cent in the year-ago month due to a sharp decline in loans to the services sector. Some concerns also came after the Reserve Bank released data relating to India's International Investment Position (IIP) for December, which showed a marginal improvement in the ratio of foreign assets to foreign liabilities. The ratio of India's international financial assets to international financial liabilities improved to 62.1 per cent at the end of December 2019, up from 60.5 per cent in September.

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