RepleteBell Market Update

Market Update 25th October,2017

Indian equity benchmarks surged to record highs powered by a rally in government-owned banks which came in high demand a day after government announced Rs 2.11 lakh crore recapitalisation package to strengthen the NPA-hit public sector banks.

The S&P BSE Sensex rose 1.33 percent or 435 points to 33,042 and the NSE Nifty 50 Index advanced 0.86 percent or 88 points to 10,295.

Nine out of 11 sector gauges compiled by the National Stock Exchange ended higher led by the Nifty PSU Bank Index’s 30 percent surge, its biggest single day gain since inception. On the other hand, Nifty Pharma Index was the top sectoral loser, down 1.5 percent.

PSU Bank Index Gains Most Since Inception

Shares of the government-owned lenders were witnessing strong buying interest after the government on Tuesday unveiled an unprecedented Rs 2.11 lakh crore two-year road map for strengthening NPA-hit public sector banks, which includes re-capitalisation bonds, budgetary support, and equity dilution.

The Nifty PSU Bank Index gained as much as 24 percent, the most since inception, to 3,836.

The capital infusion, Finance Minister Arun Jaitley said, will be accompanied by reforms to enable the state-owned banks to play major role in the financial system and give a strong push to the job-creating MSME sector.

State Bank Of India Adds Over Rs 50,000 Crore In Market Cap

Shares of the country’s biggest lender rose as much as 24.56 percent, the most in over eight years, to Rs 316.95, also its highest level in over two years.

In today’s session alone, the bank added more than Rs 50,000 crore in its market capitalisation.

Reliance Nippon Life AMC IPO Fully Subscribed Within Hours Of Opening

Reliance Nippon Life AMC’s Rs 1,542-crore three-day initial public offer which opened today was fully subscribed within hours on the first day of subscription. The IPO was subscribed 1.72 times as of 10:01 a.m.

  • Portion reserved for qualified institutional buyers was subscribed 1.66 times
  • Portion set aside for non-institutional bidders was subscribed 5.75 times
  • Retail portion was subscribed 0.02 times

NBFCs Fall On Worries Of Market Share Loss

Shares of the non-banking finance companies fell after the government pledged to inject Rs 2.11 lakh crore in PSU banks on worries of loss of market share.

“Now the government has infused unprecedented amount to recapitalise PSU banks, it will lead to a re-rating of state-run lenders,” AK Prabhakar, head of research at IDBI Capital Market told BloombergQuint by phone.

PSU Banks were ignored for a long time and now there will be a shift of market share to PSU banks from NBFCs and private sector lenders as they already have a well-established branch and franchise network, added Prabhakar.

  • Edelweiss Financial Services fell 6.2 percent
  • Cholamandalam Investment and Finance declines 6.15 percent
  • CSL Finance declines 5 percent
  • Indiabulls Housing Finance drops 4.6 percent
  • Satin Creditcare down 3.2 percent
  • MAS Financial Services declines 3 percent

*Source-Bloomberg

Technical Summary for 25th October,2017

Nifty

NSENIFTY open Gap up and made a all time high of 10340.55 . No sign of weekness neither on hourly or daily chart. We revise our stoploss at 10150.

NSENIFTY is long term Bullish as the 144 days moving average of 9,674.18 is increasing. The Relative Strength Index is at 67.56 in the neutral territory. The Relative Momentum Index is at 70.44 in the overbought territory. An important indicator for Elliott waves, the Elliott oscillator is at 196.10, in positive territory; this is a bullish sign. An equally important indicator, the STORSI is at 64.98. This value is in the neutral territory.

We have detected a Gann Swing or Pullback that is usually a bullish pattern! It should be used with other indicators.

Additional information:-

Tomorrow’s projected High: 10,317.95, the projected Low:10,218.30. The top 21-day Bollinger band is at: 10,433.49 while the bottom 21-day Bollinger band is at: 9,753.04.

DISCLAIMER: – we are not a SEBI research analyst. Views posted here only for educational purposes. There is no liability whatsoever for any loss arising from the use of this product or its contents. This product is not a recommendation to buy or sell, but rather a guideline to interpreting specified analysis methods.  This information should only be used by investors and traders who are aware of the risk inherent in securities trading

 

 

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