Monday 7 December 2015

Market Mantra : Nifty Fut (Dec)

NF need to trade above at least 7900-7925 for any Pre-Santa Rally

GST debate & "Dog" (intolerance) controversy can still rock the Parliament this week


SGX NF: 7855 (CMP)

NSE-NF: 7829 (LTP)

As par morning SGX indication NSE-NF may open gap up around 7855-7885 zone.

Technically NF need to sustain above 7900-7925 for targets of 7985-8015-8055 in the near term.

On the downside, sustain below 7850, NF may find some support around 7805-7785 area, below that 7725-7680 may be the immediate target.


Friday's CCEA report about GST may strengthen the Cong's points/demands about overall cap of 18% rate. But there are also many other points and the proposal has to be passed through the empowered committee of LS/state finance ministers. The time allotted for debate on GST in RS is only four hours and there is also another crucial Real Estate Bill. 

Cong also want one single rate on pan-India basis rather than multiple rates & State GSTS. So, there may be further debates in GST and also "Dog" remark controversy will be there in the LS. Thus we may see an excited debate-full Parliament  this week and basically Cong will not let pass the GST so easily until the last moment of current Parliament session. They will try to extract all the political mileage as possible for the sake of this GST passage and will not let NAMO (BJP) to get the full credit for it under any circumstances.

Incidentally, when UPA was in power and tried to pass this same GST, then BJP also blocked the Parliament & its passage. We are truly a victim of our shabby political system !!

Globally, although Draghi was supposed to come with a "Bazooka", he came with a "Water Pistol"; but don't "fade" the man ("Mario whatever required Draghi") !!

After last Friday's block buster NFP data in US, FFR is now projecting above 78% of Fed lift- off on Fed day (Dec-16). Now all the attention is shifted towards future Fed plan (path) of Fed Fund Rate. Will it be only one & off (0.25-0.50%) or rapid @0.25% in every alternate Fed meet ?

Apart from poor inflation, some geo-political/economic risk, Fed may also look into tepid MFG data in recent ISM surveys, coupled with very strong dollar and together with that, the Dec year end factor may also prevent it for immediate hike in Dec. But one thing is clear that, if Fed failed to deliver this time (by not hiking), it will have to "pay hell in dollars" (i.e. dollar will be sold heavily). 

From the overall stance of ECB, it appears that they will prefer for EUR/USD range of 1.15-1.05 for the time being (before Fed) to balance everything. If  Draghi came with a "Bazooka" (more QE), EUR may be pushed towards parity (1.00) with USD immediately and there after if Fed really act this time, EUR may drift further towards 0.90-0.85, making the USD more strong. So the whole affair may be a co-ordinated central banks action (Fed/ECB) to prevent any dis-orderly financial market in the event of any real Fed action (because of policy divergence between Fed & ECB).     

As all the above possibilities are being discounted by the market, it may be in a range even after Fed day with some temporary whipsaw movements.

Analytical Charts:




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