Global & Indian Market Update : Can G-20 Meet Help A Bit ?

Trading Idea: NSE NF (Mar)

SGX NF: 7080 (CMP)

NSE-NF: 7001 (LIP-ADJ)

Either sell below 7115 or on rise around 7150;

TGT: 7050-7025*-6960*-6925-6900-6860 (1-5 days)

TSL> 7170-7195

Note: Consecutive closing above 7195 zone, NF may further rally towards 7225-7295 & 7315-7375 area in the near term (alternative bullish case scenario from the present trading level).

In the near term, NF has to sustain over 7375-7410 zone for further rally up to 7580-7655 zone. On the downside, consecutive closing below 6860, NF may further fall towards 6775-6565 & 6480-6335 zone in the days ahead, depending upon the budget news flow.

Yesterday's railway budget may be indicating that Govt may present a rural economy oriented budget on Monday aiming at the forthcoming state elections. With little hope of any "dream budget" this time, all eyes will be on fiscal deficit road map, Govt's capex & borrowings to stimulate our economy and tax/LTCG treatment. Going by the current global & local/domestic market turmoil, Govt may not choose to tinker with LTCG this time as this may cause more market meltdown at our end. Unless and until, global sentiment improves and there are some visible structural improvement, nothing will work for our market. Also, our market may likely to see some actual earnings improvement and policy reform (GST etc) and an road map for the PSBS recapitalization amid the ongoing NPA mess.

Yesterday's announcement in the SDR mechanism by the RBI may help some PSBS in the short term, but huge capital and interest rate policy reform may be required for a long term solution. India's real rate of interest is too high & its an expensive economy & cost of doing business is also high (as incremental benefit of lower oil prices was not transmitted to the consumers/economy and there are various high regulatory charges). Also, political landscape is fast changing and people are loosing faith in NAMO/Modinomics amid various socio political issues. Recent, Jat vandalism in Haryana may caused significant loss of confidence among investors of doing business in India.

After yesterday's late oil rally ($0.82~2.5%) amid speculation of yet another production cut meeting between OPEC & Non-OPEC members in March as told by Russian Oil minister, SPF reversed the direction and now trading around 1950.

Technically, SPF has to now sustain over 1950-1960 zone for any strength and in that scenario, it may rally up to 1975-2000 & 2035-2075 and 2095-2110 zone. On the flip side, unable to sustain over 1960 area, it may again fall towards 1910-1867 & 1824-1804 zone in the near term.

For Crude (CMP: $33), formidable technical hurdle is 34-35.50 zone and only consecutive closing above that it may further rally up to 38-41. On the flip side, sustain below 30.40, it may again fall towards 26-25 zone in the near term.

Globally all eyes will be on the G-20 meet currently going on in China and comments by various Central bankers/FM(s). There are some market talk that, after this summit, China may announce significant Yuan devaluation road map as a part of co-ordinated policy action by the major global CB(s).

Apart from China, Oil, probable EU/US recession, there will be also Brexit issues and all this may be an ideal landscape for the Fed to take an wait & watch stance in 2016, with out any rate hike and probability of an US NIRP will also be there.

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