Nifty Fut (Sep) today closed
around 8630 (-0.17%) after making an opening session high of
8665 and day low of 8596.
Looking ahead, technically
sustaining below 8610-8575* area, NF may fall towards
8540-8470*-8370 and 8300-8240*-8125 zone in the immediate to
short term.
On the other side, for
any strength, NF need to sustain above 8680-8715* area for
further rally up to 8765/85*-8825-8875 and 8905-8975-9075*
zone in the immediate to short term.
Global markets was
continuously trading in a sideways manner today ahead of the
much awaited & over hyped (?) Yellen speech today at Jackson
Hole symposium.
Although there is much hope
that Yellen may be too "hawkish" this time after a series of
recent hawkish statements from various Fed members, Yellen may
only take the "dovish hike" script and may not guide/talk too
much ahead of US election in Nov, thereby causing a "market
turmoil" just before the election.
Going by various
geo-political factors (like Brexit), China jitters and apparent
strength of US economy, Fed may opt for a Dec'16 "Dovish Hike"
(one & off), if Clinton is elected as next US President.
Trump is now viewing as
"severe risk" for global as well as US economy for his anti
trade & China rhetoric (pro US stance) and if he is elected
(very low probability as of now), then it may force the Fed to
be in hold until Dec'17.
Barring any unforeseen
situation (like real Brexit, China jitters, slump in Crude oil
towards $25, EU/Italian banking NPL crisis etc), Fed may opt for
the annual hike of 0.25% (only one hike in a year against Dec'15
dot-plots of four hikes in a year), just to keep the credibility
of its own and co-ordinate the FX market (USDJPY-Yen will loose
the strength and that will help Japan/BOJ).
As par some reports, BOJ may
announce some types of tapering (Yen 10 tln/PM) in the next policy review date
(21-st Sep) from its Yen 80 tln/PM bond purchase programme as its increasingly difficult for them to
find eligible bonds and will gradually decrease its balance
sheet to bring the next round of new QQE (like 50 years perpetual infra funding bond at 50 yrs perpetual).
In that scenario, USDJPY may fall more and to
balance the USD, Fed will have to hike by at least 0.25% in
Dec'16 (Possible Co-ordinated action between Fed & BOJ)
Indian market was under
pressure today as banks lagged the broader market. As par new corporate
bond lending proposal by the RBI, a NBFC can lend from the market
against eligible corporate bond from the bond market directly,
rather than through a bank (as par present norm).
Though, the
corporate & "masala" bond rejig may be also helpful for
bank's liquidity as they can also borrow from the LAF/overnight RBI
repo & overseas window against eligible corporate bond in lieu of
present norm of only Govt bond, such benefits of more liquidity
will be visible only in the mid to long term. As a result, banks
were sold, but NBFC(s) gain today.
Today, IT scrips were dragged
after Infy concall, in which they had basically given a guidance warning
amid weak UK & US markets ( Brexit uncertainty and US election).
Tata Motors was very
volatile today and had wild swing after the Q1 result, which is
below street estimates, but top line (sales) growth was
encouraging. The co is also in the process of further fund
raising and closed today by around 4% up.
Market sentiment was also dragged
today, after IMD said that Aug rainfall is around 21% below
normal rain fall and overall cumulative figure is 3% below LPA.
Tata steel fall today after
reports of UK asset sales at much lower consideration than
previous estimates and news of quitting from Chhattisgarh
project.
Overall, for the week, Nifty
closed lower around 1% as there was no fresh drivers for the
market after GST & RBI Gov appointment events in Aug.
Update:
Yellen's
statement at Jackson Hole today is basically a "Whole lot of nothing"
and it seems that Fed has no idea about future rate path. This may be also termed as talk of "dovish hike".
But, shortly
after Yellen statement ("The rate hike case has strengthened in
recent months, but ultimately it depends on various incoming data---") ,
Fischer commented that Yellen's statements are consistent with possible
Sep rate hike or even US could have two rate hikes in 2016 (??) has spooked the brief global market "risk on" rally.
Basically,
the present Fed drama (verbal intervention) may be designed to help out
the BOJ and most probably Fed will hike by 0.25% in Dec'16 in an effort
to just regain its lost credibility, everything being equal, provided Trump will loss the US
Presidential election.
But
one thing may be sure that by Dec'16, we could see some global market
turmoil, because it will be a catch-22 situation. If Trump loose, Fed
may hike or if Trump win , Fed may be on hold at lest till 2017.
In both the above scenario, market (risk assets) will be sold off.
SGX-NIFTY
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