Markets and News
The first week of the last month of the first half of 2018 kicks off!!! Its as dramatic as I started this post. There are a lot of positives on the global front and some positives on domestic front also. The first piece of good news is the US non-farm jobs data that has come around 25% more than the expected figure. The expected figure was 1.8 lakh and what we got was 2.2 lakh and that has pushed Dow jones around 220 points on Friday. The sentiment seems to have rubbed off for Asia as well and most of the Asian markets are trading in positive with Hongkong up 400 points and Japan 250 points.
Domestic Cues
On the domestic front, the Crude has settled down around 76 dollars now and that would mean that crude prices will settle down a bit now. The petrol price which was 83.08 rupees on 29th May in Hyderabad has gradually come down and settled at 82.74 as on yesterday and slowly it might settle down below 82 rupees. The other news is the interest rate hikes that many banks led by HDFC has undertaken on Saturday and we need to see what impact it will have on the demand for the loans. RBI started its 3 day monetary policy committee meeting starting today and will come up with its report on 6th June where for the first time in 4 years we could see a rate hike of around 25 bps and looks like banks are reacting to it before. The bad news however is ICICI bank and Chanda Kochar who got into more shady deals and ICICI board has started its search for a new Chairman.
Derivatives Action
On the derivatives front, Friday saw a lot of shorting that happened on Friday with the correction that has happened. The long positions went down to 43% and what was important was the reduction in the put call ratio in options market this early. The put call ratio fell to 1.48 from 1.59 happening on a single day that too on the 1st day of the new series is puzzling. Puts were mostly long with 37 long puts for every short put and 2 short call for every long call. This means the series has started on a bearish note. 10100 put added 3.5 lakh contracts 10300 put adds 3.9 lakh contracts and 10700 put added 6.9 lakh contracts while on the call side 10800 call added 5.6 lakh contracts while 10900 call added 7.1 lakh contracts and 11000 call added 6.7 lakh contracts. So its a wide bar ranging from 10100 to 11000 now.
What is the Nifty and bank nifty call for the day?
The green Asia means we will have a positive opening around 10720-10740 range and what happens next is important. any dip around 10720 should be seen as an opportunity to enter with 10780 as the target before RBI credit policy on Wednesday.
Bank Nifty is even more critical and tough and the opening will be around 26750-26800 zone. ICICI might pull it down while HDFC might try to push it up. Take a long around 26750 with 27000 as the target before the credit policy.