Nifty Fut (Sep) today closed at around 8976
(+0.27%) after making a late day high of 8995 and session low of
8934.
Looking ahead, for tomorrow NF has to sustain
over 9005-9025* zone for 9075*-9125 & 9185/205*-9315 in the
immediate to short term.
On the downside, sustaining below 8975-8925*
area, NF may fall towards 8890-8850 & 8780-8710 zone in the
immediate to short term.
Today's overall global cues was flattish after
overnight flat US market on the back of slightly hawkish Fed Beige
book (modest US economic activity with signs of inflation picking
up), improved Japan GDP (which also underscores any Sep BOJ
"Bazooka" probability) and better than expected Chinese trade data
(better data may deter for any immediate PBOC stimulus).
All eyes will be on the ECB today, in which
Draghi is expected to maintain the QQE at present level without
any rate action, but may lower the growth prospect amid Brexit
related uncertainty and may longer the tenure of bond purchase
with some modifications on the eligible bonds (as ECB is
increasingly find it difficult to buy eligible bonds amid
NRIP/ZRIP environment).
But, Draghi may face some tough questions also on
the inflation outlook as despite so much QQE, inflation is no
where !!.
Back to home, all eyes will be on the progress of
GST on the ground after FM yesterday talked about "stiff timeline"
for April'17 roll out. After market hours today, President cleared
the GST amendment bill, which is now converted into an "Act" and the next
steps will be formation of GST council to finalize the standard
GST rate (RNR), which will be the most vital part as states
will not tolerate any revenue loss and at the same time Govt will
have to provide some relief (direct or indirect) to the people.
Indian market is assuming a RNR of 18% with
April'17 GST roll out. But most of the states are sticking for 22%
RNR. Anything above 20% RNR and delayed implementation beyond
April'17 may be negative for the market in the short to mid term.
Today Nifty was immensely supported by Pharma
counters (safe defensive bet as market is reaching towards life
time high), Tata Steel (above expected Chinese trade data helpful
for metals), Maruti (news of stock split proposal), Hero Motors
(overall growth in Aug 2-W sales and forthcoming festive demand
along with rural consumption uptick expectation).
Nifty was dragged by TCS & other IT stocks
(after TCS guidance/profit warning amid weak BFSI activities in UK
& US-Brext & US election), Yes Bank (proposed $1 bln QIP
may dilute EPS by 10%; however, Yes bank withdrew/defer the QIP after
market hours today as the stock corrected by over 8% in the last
two trading days !!).
All eyes will also be on the CPI data next week
in India after reports that almost 37 districts had received below
normal monsoon this year so far.
Overall, Nifty Fut-I at striking distance from
the all time high of around 9185 one should watch the level of
9075 closely for a probable correction from here or continuation
of the present rally powered by FII liquidity amid supportive
central banks.
Update: ECB Meet & Oil
From the overall statement & subsequent Q&A of Draghi, it seems that ECB is in no hurry to offer any fresh monetary stimulus or announce the extension of the current bond buying programme (EUR 80 bln/pm) beyond March'17. Although accommodative door is open as always and ECB may modify eligible bond criteria as there may be shortage of eligible bonds as early as Nov'17. Instead the "Super Mario" repeatedly argues for some Govt fiscal measures & structural reforms to pop up the sluggish EU economy.
Clearly, Draghi is on the hawkish side as of now and keeping his ammunition ready for any future headwinds (like real Brexit etc) which is not helpful for risk assets also.
The last few days oil rally came on the back sudden US inventory draw down. But a more closer look reveals that it may be primarily because decline in US import and recent disruptive hurricane weather. Technically, Crude has to sustain above $48.65-49 for any further rally from here (CMP: $47.20).
Update: ECB Meet & Oil
From the overall statement & subsequent Q&A of Draghi, it seems that ECB is in no hurry to offer any fresh monetary stimulus or announce the extension of the current bond buying programme (EUR 80 bln/pm) beyond March'17. Although accommodative door is open as always and ECB may modify eligible bond criteria as there may be shortage of eligible bonds as early as Nov'17. Instead the "Super Mario" repeatedly argues for some Govt fiscal measures & structural reforms to pop up the sluggish EU economy.
Clearly, Draghi is on the hawkish side as of now and keeping his ammunition ready for any future headwinds (like real Brexit etc) which is not helpful for risk assets also.
The last few days oil rally came on the back sudden US inventory draw down. But a more closer look reveals that it may be primarily because decline in US import and recent disruptive hurricane weather. Technically, Crude has to sustain above $48.65-49 for any further rally from here (CMP: $47.20).
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