Nifty Fut (Sep) today closed
around 8759 after making an opening session low of 8706 and session high of
8784.
In the last hour of trading
NF retraced to some extent as global sentiment was somehow affected again for
the Deutsche Bank (DB) news flow (German Govt may take stake of DB in extreme
situation; but it was not officially confirmed and both Germany & the DB CEO denied it).
Technically, for tomorrow
(29/06/2016), NF/NS has to sustain over 8785-8805* zone for target of
8825-8885*-8905/25 area.
On the
downside, sustain below 8755-15* area, NF may fall towards
8685/65*-8635-8585/35 zone.
Global cues were somehow
supportive today after market digested yesterday’s 1-st round duet of Clinton
& Trump. It was also supported by some rebound in oil (above expected/favourable API inventory data &
hopes of production freeze in the OPEC meet) and news of DB; although USDJPY
was under pressure because of falling JGB yields despite BOJ’s jawboning. It
seems that BOJ is now looking desperately for the Fed’s Dec rate hike
probability and may not intervene too much until USDJPY fall around 95 levels.
A stronger USD because of rate hike notion can prevent the JPY for getting more
strength as of now.
In the absence of any
meaningful economic data, all eyes will be on the Yellen & Draghi testimony
today. Yellen may be under great pressure from the ongoing US presidential
debate as Trump described Fed as "political" and kept the interest ultra low for
political benefit rather than any economic rationale. So, Yellen may face some
tough questions about monetary policy and that may affect USD and the “risk
trade”. There are also a slew of Fed speakers (jokers ??), scheduled to speak today (ongoing verbal intervention script by Fed until Dec'16).
Although, Clinton is much
ahead in the 1-st debates as a much more prepared & composed speaker than
Trump, it may not affect the core support base of the later because of
various reasons.
Thus, the debate rally may not last long in this ongoing US
political war.
Back to the Indian market,
it saw some short covering after 3 days of fall ahead of FNO expiry tomorrow.
Going ahead, apart from the
global cues, market may focus on the RBI meet on 4-th Oct (although rate cut
chance may be very this time, all eyes will be on the tone of the new RBI
Gov and any chance of Dec rate cut), progress of GST on the ground (as par FM’s
statement yesterday, April’17 roll out probability is still alive) and Q2FY17
result season.
Looking forward, Indian market
may be supported by lower trajectory of inflation, hopes of revival of earnings
in Q2 (in Q1, Nifty EPS YOY growth was only around 3%), incremental reforms by
the Govt, better consumer spending by both urban & rural economy as a
result of 7-CPC and good monsoon this year.
But pain of twin balance sheet issues & demographic dividends may also be one of the biggest headwinds for Indian economy. As par some estimates, nearly 1 lac people are entering job market now in India every month (huge population & demographic issues); but very few appropriate jobs are being created either by the Govt or Private sector despite GDP is growing around 7-8%. So, lack of proper employment and stable income may be one of the issues in the coming 2019 general election, until Govt is able to do something decent about it.
Also, global jitters (US
election, Fed rate hike, China & EU credit concern etc) may be a risk in
the near term. As par some reports, in H2FY17, Govt may spend less capex
(by around 35%) for infra as a result of 7-CPC related budget constraint.
Today Nifty was supported by
Tata Steel (extension of MIP buzz on some steel products), Bharti Airtel
(report of affordable international roaming pack and some relief from the
ongoing tussle with R-JIO), SBI and Bhel.
Nifty was dragged by RIL,
Coal India (buy back offer rate below market expectation at 335), HUL &
Wipro.
NSE-NIFTY FUT
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