"Mint Street" Welcomed The New RBI Gov As Nifty Soared By Almost 1.5% Helped By Blockbuster India Service PMI & "Bad" US NFP Data

Nifty Fut (Sep) today rallied by almost 130 points after long weekend and closed around 8966, just tad below session high (8969) after making an opening low of 8886.

Looking forward, for tomorrow, NF has to sustain above 8875-9025* area, for target of 9075*-9125-9185 & 9205-9260-9315 zone in the immediate to short term.

On the flip side, sustaining below 8945-8905* area, NF may fall towards 8875/50*-8790-8740 & 8690-8640*-8540 zone in the immediate to short term.

Indian market took cues from the Friday's tepid US NFP job data (as bad US economic data is now good for risk assets) and the notion that Fed will not act in Sep'16. So, liquidity tap will be open at least till Dec'16, when Fed may act depending upon the US presidential outcome in Nov'16. 

Going by the overall Fed stance & US economic data trend, Fed may hike by 0.25% in Dec'16, provided Trump does not win the presidency this time. 

As of now, Trump is being seen as "disruptions" for global economic market (risk assets) and if he wins, then Fed may be on hold till at least 2017 or even forever but there may be turmoil in the risk assets as well. 

Till few days ago, Trump was lagging Clinton by over 10% margin, but the latest CNN poll projecting 2% lead for him as of now. The sudden change in trend may be influenced by Trump's latest strategy to stuck with only US economics issues with a slight "patriotic" stance, leaving aside unnecessary controversies.

Indian market got further support from yesterday's service PMI data for Aug which came at 54.7 (highest since mid-2013; consensus: 52.2; prior: 51.7) and some progress of the GST on the ground. As par reports, GST council will be formed as soon as the bill get Presidential assent for setting of final rate-RNR and other formalities.

USDINR "crashed" today by almost 0.50% as new RBI Gov took charge today and bond rallied (yields fall), which in turn helped the banks to a great extent today (Bank Nifty soared by almost 550 points or around 3% today, thus helped the overall market sentiment significantly).

Apart from banks, Nifty was significantly supported today by Tata Motors (positive management commentary about effect of weak GBP, news of local/India JLR production plan, fresh orders for around 5000 buses from the states/SUT), Maruti (increase in production to cope up with forthcoming festival demand coupled with 7-CPC), Tata Steel, Infy (Saudi Arab project).

Nifty today dragged by TCS (renewed real Brexit woes ?) and Coal India (proposal of excess coal export to Bangladesh).

Globally, G-20 reaffirmed about continuing monetary & fiscal stimulus along with some structural reforms and "innovations" (but these are nothing new and already known by the market).

Some Japanese Govt official/advisor also indicated that Japan/BOJ will not jump into any types of "Helicopter Money" or not go for any tapering in its forthcoming review meet. Rather than, they will wait for Fed cues for their further policy action in their Sep meet.

Overall, Sep is a month of central bankers meet (ECB/BOJ/Fed) and together with the forthcoming US presidential debate from Oct-1st week, it may drive the global as well as the Indian market apart from India CPI next week.

SGX-NIFTY