Today is the first trading day of the December month but the first day of the series has been a bit soft as it lost nearly 100 points on the anticipation of a bad GDP number and now that the numbers are here, this should become history now. GDP came at 4.5% which is almost as per the market expectations but the contraction in manufacturing is something that will worry about everyone. The nominal GDP grew at 6.1% which is the lowest in the last 60 years!!! This is a very very bad data point and by how much market reacts to it needs to be seen.
On the global front, Dow Jones also ended red on Friday losing nearly 120 points but Asian markets today are singing a different tune as Hong Kong is up 120 points and Japan is up more than 200 points. Brent crude is also down today near to 61 dollars, trading at 61.1 dollars.
On the domestic front, apart from the GDP news we also had the core sector data for the month of October that came at -5.8% with 6 out of 8 sectors showing contraction. Coal, crude, natural gas, cement, steel and electricity have shown contraction while refined products remained at 0 levels and fertilizers is the only sector that showed growth.
Now for the good news, the GST collections for November after a while crossed 1 lakh crore, while the auto sector data for November is showing some signs of recovery with Maruti coming up with good numbers, Tata Motors with average numbers while M&M disappointed a bit. Another piece of good news for the market is the hike in Telecom prices by over 40% by Airtel, Jio and Vodafone and that will push the telecom stocks up. So, 11970 which is the 20dma will hold for the day even if there is any negativity in the market.
On the derivatives front, Friday was a horrible and forgettable day for the derivative markets as both Futures and options saw a lot of bearishness. There was a selling of nearly 1500 Cr in Nifty futures and that brought the Nifty long positions for December from 60% at the beginning of the day to 53%. In the option market the Nifty PCR remained constant at 1.54 as there was put buying and call selling happening simultaneously, indicating bearishness.
For the Thursday expiry, 11800 put added 2.8 lakh positions while 12050 put added 2.4 lakh positions and 12000 has the highest open interest on put side. On the call side, 12100 call added 12 lakh positions while 12200 call added 6.9 lakh positions and 12100 call has the highest open interest making it a 12000-12100 range which can broaden to 11800-12200 if these levels are broken.
What is the Nifty call for the day?
After a disappointing Friday, we are going to start the first trading day of the month on mixed signals with average GDP, bad core sector data and a good GST numbers and telecom price hike. The start is likely to be flat around 12040-12060 mark and 12010-12030 should act as a support and if that is broken then 11970 is the 20dma support that should hold.
On the upside 12100 will act as a resistance and so, the trade for the day is to look for a support at 12030 mark and go long with 12080-12100 as the target. Apart from this I dont see any other trade possible. Shorting should be strictly avoided till the time 11970 level is decisively broken.