Nifty closed almost flat after struggling most of the session amid muted global cues dragged by Crude Oil & marked by one year anniversary of Chinese Yuan devaluation

Nifty Fut (Aug) closed today almost flat around 8622 (+0.28%), around day high (8630) after recovered quite smartly from the day low of 8565 aided mainly by short covering, after it unable to break the important technical support level of 8560, despite two attempts (double bottoms).

Looking ahead, sustaining below 8605, NF may again test 8560* zone and below that may target 8530-8480*-8380 & 8270*-8200-8110 area in the immediate to short term.

On the other side, for any strength NF need to trade above 8645-8675* area for target of 8725-8785*-8825 & 8875*-8950-9075 in the immediate to short term.

Today's morning Asian session was listless because of Japan holiday, but there was some volatility for Crude oil, which was not able to stand on its feet above $45 because of increasing reality of supply gluts, despite OPEC's jawboning about production cut.

Some volatility was also there after RBNZ cut by 0.25% to 2% as broadly expected, although there were expectation of 0.50% by some of the market participants. South Korea also stands pat today with their rate at 1.25%.

Indian market was able to close slightly positive after a lot of struggle for most of the day. 

The market was mainly dragged by PSBS, as BOB result came much below street estimates with some deterioration of stressed assets. Tomorrow SBI will publish its result and being the largest bank of India, its NPL situation may affect the sentiment of the broader market and can guide us the real picture of stressed corporate India & SMES.

Apart from BOB, today's market was mostly dragged by Grasim ahead of Q1 result and AV Birla restructuring woes, Infratel, ZEEL, Hindalco, SBI and Adani Ports, while it was supported by RIL, BPCL, Asian Paints, Idea, Eicher Motors, ICICI Bank, Axis Bank & TCS.

As par some reports, in the forthcoming MSCI India rejig, weightage of  Axis, Yes, BPCL, Eicher may increase and  Pidilite, Bajaj Fin Services may be the new candidates, while, weightage of DRL may decrease.

Tomorrow the current Parliament session will come to end and then focus will be on the announcement of the name of the next RBI Gov, formation of MPC, July CPI, progress of GST and finalization of GST rates in the months ahead.

For the past few months, since March'16, Indian as well as global market did not correct meaningfully amid power of liquidity (earnings are going to earth, but valuations are jumping to sky !!). 

Thus, at 8700 level, Indian market may be looking quite stretched and expensive, while FPI(s) are pumping continuous money hunted by negative global bond yields, DII(s) are consistent sellers, perhaps preparing themselves for the "rainy day". But in FNO, FPI(s) has massive hedged positions too.

However, rational or irrational, whatever may be the present rally, time & price is the ultimate and in that technical sense, NF need to provide at least 3d consecutive closing above 8675 zone for new highs towards 9000-9200 level or need to close below 8480 on the same basis for new low towards 8000-7800 area. 

The question is which will come first from here (9200 or 7800) ? 

Apart from global cues, Indian market will be dictated by next RBI Gov stance, real progress of GST & ongoing Q1 & Q2 results and by Oct, there may be clear direction.

Analytical Charts:SGX- Nifty Fut