SGX NF:7926
NSE NF: 7904
As par early morning SGX indication, NSE NF may open around 7925 area after steady overnight US market amid initial China & oil woes. There were some market buzz of Chinese corporate debt defaults yesterday and Chinese as well as global market dipped initially amid low volumes.
Technically, NF need to sustain over 7950-7980 zone for an immediate target of 8005-8055.
On the downside, sustain below 7915-7880 it may fall towards 7855-7820 and 7780-7725 in the next few trading days.
It appears that absence of FII selling is helping a lot in the "Santa" rally for our market along with year end NAV window dressing; still we are down around 7% YOY in Nifty.
Going forward, Oil may be the one the biggest headwinds for global markets as well as EM for 2016. Some analysts believe that although lower oil prices are beneficial for major oil importing economies (such as India/China/EU), it has its darker side too. Not only that, lower oil prices already shelving projects worth billion of dollars, but it may also accelerate out flow of surplus cash from EM equities, bonds portfolio by the oil producing economies.
In the past, these oil producing economies has invested huge amount of their surplus cash into EM countries for better yield and and that has helped to finance the current account deficit of may EM countries too. In short, oil producing economies are provider of trillion dollar liquidity in the global financial system and if oil goes down to $30-25 for any reason and stay there for prolonged time (demand supply mismatch and increasing global green initiatives), we may see serious outflow of petro dollar and panic in the global as well as EM financial system in 2016. Already various OPEC countries including Saudi Arabia are in some turmoil. Also, due to lower oil prices, Canada's (G6 country) economy was not in great shape in 2015 and 2016 is also not looking brighter at this moment.
For our market, investors may wait for another three months up to March budget session to see the outcome of GST passage and possibility of any "dream" budget apart from Q3 results in Jan-Feb. Till then, 7500-8000 may be the broad Nifty range.
Analytical Charts:
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