Start of the new month as well as the new series.
This is the last month of 2017 and the last series of the year. Yesterday saw a mayhem at the markets and it is one of those days when we tend to put things at the back burn and move on. New series starts with a bang. The GDP numbers come at 6.3% vs expectation of 6.4% and GVA comes at 6.1% vs expected 6.3%. This is a very good number convincing us that the growth is back and India is on the growth track again. Trade, Hotels register a 9.9% growth and manufacturing 7% growth and that’s a great news. Govt expenditure comes down and minus that and agriculture GDP is 6.8% which is a great sign. How much markets will digest and support growth needs to be seen.
Globally things look bit worried as US tax reforms are pushed to today and senate did not pass it yesterday. This came after the US markets closed and immediately after that Dow futures started falling and so are some of the Asian markets. India will react to it maybe mildly, but my feeling is GDP will weigh heavily on the minds of the markets. Added to this the November Auto sales numbers will come and that is expected to be between 18 to 25% range growth for all leading companies like Maruti, Ashok leyland, M&M, Bajaj, Hero, TVS etc. Watch out for these numbers and see those stocks going up as the day progresses.
Futures & Options!
On the derivatives front, some interesting figures are emerging. This times rollovers are just at 61% compared to last 3 month average of 63%. Decembers have been mixed months in the past with mixed results. With Gujarat election results coming in that could be something that will move the markets. Yesterday lot of action was seen at 10500 and 10600 call for December series and close to 2 lakh volumes generated at 10500 and 1.2 lakh at 10600. The premium of 26 rupees means immediately markets can look at a roof of 10630. The put call ratio is at 1.01 which is almost flat.
What is the NIFTY strategy for the day?
NIFTY will open flat and a long position at the dip below 10250 will serve you better. Today we could see 10300 touching if the auto sales are positive. I don’t see it going below 10200 levels as there are very strong supports coming. So a long position at the opening of NIFTY at around 10230-10250 will serve you better. Keep a 10300 target initially.