Nifty Fut (June) closed
around 8239 after making low of 8163 and high of 8254. Nifty
traded most of the day in a choppy market below 8200 ahead of
ECB & OPEC meet and NFP numbers tomorrow and took some
support from the 8160 zone in the last hour of trading after IMD
reiterated again about good monsoon this year.
Today Wipro, HCL Tech, Infratel, Sun Pharma and Lupin dragged the index, while Yes Bank, Coal India, Hindalco, Tata Steel, Axis Bank and BOB supported it to some extent.
Possibility of a good monsoon, passage of GST in the forthcoming Parliament session, decent Q4FY16 earnings & "blockbuster" GDP numbers are tailwinds for our market, while some "controversy" about tenure of RBI Gov (Rajan), hawkish talks by the Fed, confused BOJ, Brexit fears and China debt & Yuan devaluation concerns are some of the headwinds.
Looking ahead, Nifty Fut has to sustain over 8295-8350 for further up move up to 8405-8520 & 8685 area in the short term.
On the other side, failure to sustain over 8250 area, some selling pressure may creep in and it will again fall towards 8160-8125 area, which is acting as immediate support for it. Further, sustain below 8125 zone, Nifty may fall towards 8070-7980 territory in next few trading sessions.
All eyes will be on the NFP data tomorrow and Yellen speech on 6-th June for a clue about June-July rate hike possibility. BOJ seems to be in some confusion as it is delaying sales tax hike in Japan to 2019 and there is some talk about monetization of its Govt debt, which is supporting Yen to some extent and making "risk trade" off.
S&P Fut (SPF) is now trading around 2095 and it need to sustain above 2105-2115 area for further rally towards 2135 area; otherwise it will come down and below 2090-2085, may target 2055-2020 zone again.
Ironically, at around 2100 level of SPF, Fed hiked after a decade in Dec'15 and consequently SPF suffered around 15% correction in Jan-Feb'16 amid China jitters (Yuan devaluation as a result of strong USD). Thus, this time Fed has to act more cautiously amid Brexit fears just after Fed meet in June and Fed may talk more hawkish about July meet in order to keep the USD/FX market in control rather than any real action in June.
RBI may wait for real Fed move and actual progress & distribution of monsoon/inflation and may be on hold on 7-th June. It may keep more thrust on liquidity & previous rate cut transmissions in June meet and wait for Aug for any rate cut (0.25%). On the other hand GDP figure of 7.9% (GVA @7.2%)
is creating some sort of confusion as it is in discontent with other high frequency economic indicators and an economy growing at 7.9%, does not need any further rate cut !!!.
Also, controversy about Rajan extension as RBI Gov is creating some uncertainty among the institutional investors who trusted the RBI Gov for its "hawkish" stance and disapproval of the so called "helicopter money" (QQE by G-3 central banks).
Thus, in this kind of volatile news flow, we should concentrate more on technical levels of the market as time & price is the ultimate.
Today Wipro, HCL Tech, Infratel, Sun Pharma and Lupin dragged the index, while Yes Bank, Coal India, Hindalco, Tata Steel, Axis Bank and BOB supported it to some extent.
Possibility of a good monsoon, passage of GST in the forthcoming Parliament session, decent Q4FY16 earnings & "blockbuster" GDP numbers are tailwinds for our market, while some "controversy" about tenure of RBI Gov (Rajan), hawkish talks by the Fed, confused BOJ, Brexit fears and China debt & Yuan devaluation concerns are some of the headwinds.
Looking ahead, Nifty Fut has to sustain over 8295-8350 for further up move up to 8405-8520 & 8685 area in the short term.
On the other side, failure to sustain over 8250 area, some selling pressure may creep in and it will again fall towards 8160-8125 area, which is acting as immediate support for it. Further, sustain below 8125 zone, Nifty may fall towards 8070-7980 territory in next few trading sessions.
All eyes will be on the NFP data tomorrow and Yellen speech on 6-th June for a clue about June-July rate hike possibility. BOJ seems to be in some confusion as it is delaying sales tax hike in Japan to 2019 and there is some talk about monetization of its Govt debt, which is supporting Yen to some extent and making "risk trade" off.
S&P Fut (SPF) is now trading around 2095 and it need to sustain above 2105-2115 area for further rally towards 2135 area; otherwise it will come down and below 2090-2085, may target 2055-2020 zone again.
Ironically, at around 2100 level of SPF, Fed hiked after a decade in Dec'15 and consequently SPF suffered around 15% correction in Jan-Feb'16 amid China jitters (Yuan devaluation as a result of strong USD). Thus, this time Fed has to act more cautiously amid Brexit fears just after Fed meet in June and Fed may talk more hawkish about July meet in order to keep the USD/FX market in control rather than any real action in June.
RBI may wait for real Fed move and actual progress & distribution of monsoon/inflation and may be on hold on 7-th June. It may keep more thrust on liquidity & previous rate cut transmissions in June meet and wait for Aug for any rate cut (0.25%). On the other hand GDP figure of 7.9% (GVA @7.2%)
is creating some sort of confusion as it is in discontent with other high frequency economic indicators and an economy growing at 7.9%, does not need any further rate cut !!!.
Also, controversy about Rajan extension as RBI Gov is creating some uncertainty among the institutional investors who trusted the RBI Gov for its "hawkish" stance and disapproval of the so called "helicopter money" (QQE by G-3 central banks).
Thus, in this kind of volatile news flow, we should concentrate more on technical levels of the market as time & price is the ultimate.
Analytical Charts:
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