Nifty Fut (Sep) today closed
around 8803 (-0.33%) in a range bound trade after opening gap
down. Today's day high & low was around 8820 & 8786.
Looking ahead, for
tomorrow (21/09/2016), sustaining below 8785 area, NF may fall
towards 8735/8705-8665/35*-8570/40 zone immediately.
On the other side,
sustaining above 8825 area, NF may further rally towards 8875*-8905/25-8975/95
zone for the day.
Yesterday, US market fall in the late trade and closed almost flat despite trading higher earlier in the Asian & European session as market participants choose to curtail positions ahead of Fed & BOJ.
Oil got some support early yesterday as there was
some renewed optimism about OPEC/Non-OPEC production freeze and
geo-political tension in Libya and Nigeria.
In the absence of any meaningful cues
domestically, Indian mkt may also dancing with the global tunes as
of now.
Any definitive indication of Dec hike by Fed tomorrow;
i.e. extreme "hawkish hold" stance and along with that hawkish or
even neutral BOJ may make global as well as Indian market extremely volatile in the coming
days.
Rather than Fed, BOJ announcement tomorrow
morning around the Indian market opening time may be more important as
its almost certain that Fed is not going to hike immediately leaving
the door open for the Dec with a bit hawkish guidance in order to
make everything in balance just before US presidential election in
Nov. FFR is now indicating probability of Sep hike as around 22% and Dec hike around 59%.
BOJ, on the other hand is expected to slash rate
further to (-)0.2% from the present (-)0.1% with some reverse
twist to steepen the yields of JGB bond in the long end, keeping
the short end bond unchanged; i.e BOJ may take the NIRP route more
proactively instead of its present strategy of bond buying @80 tln
Yen per year as it is increasingly difficult to buy eligible bonds and ETF
buying is also causing some stock market bubble. BOJ may thus
announce some type of tapering to the tune of 10 tln Yen per month
in the present bond buying programme.
Alternately, due to time difference with the Fed
meet, BOJ may simply be in the sideline with a message for some
action in the coming months as it want to see some result for the
previous/ongoing QQE.
Overall global market is worried by some extent
as central bankers seems to be increasingly out of ammunition and
basically pleading for more Govt fiscal & structural measures.
After all, with so much monetary stimulus for
more than decades, although Wall Street (stock market) has
significant "inflation" (elevated asset price), inflation is
virtually no where in the "Real Street" (real economy) as all the
liquidity may be finding its way to the wall street rather than
the real street.
In that sense, QQE (easy money) has so far failed
to create any meaningful consumer demand and in contrast helped to
create substantial supplies by creating overnight zombie companies
which are responsible for the present mismatch in supply
& demand (e.g. for Oil, Steel etc).
Domestically, all eyes will be on the
progress of GST and Indo- Pak geo-political tension, Q2FY17 result
and FY-18 budget talks in the coming days apart from the global
event (Fed/BOJ/China credit concern etc).
There was also a report yesterday that
at present our PM enjoying nearly 80% approval rate despite some
pessimism about slow progress of vital reform and some other
issues.
Although the approval level of NAMO was
around 87% last year, this may support the positive sentiment
about Indian mkt having political stability and appeal of
demography, democracy & development in the long run.
As par some report, PM has given final
authority to the army for an appropriate response to Pak for the
URI terrorist incident. Although, Indian Army indicated that they
are not in a hurry and will response at an appropriate time &
place, market is worried to some extent for the ongoing Indo-Pak
geo-political tension ahead of UP state election. At present, Govt
is apparently taking some diplomatic steps to isolate Pak with the
rest of the world and testing some mid-range missile frequently to put pressure on the US to persuade Pak not to allow any terrorist organization to use its soil. Being in the election year, US will never allow an immediate or even future conflict between the two nuclear nations.
Today, although Moody's has praised various
incremental reform in India, it may be in no hurry to upgrade the
rating in the near future owing to the problem of twin balance
sheets & tepid private investments in the country.
Also as par some reports, Q1FY17 direct
tax collection growth was below estimate primarily because of PSBS
& ONGC (one time). Incidentally, Moody's also expressed some
concern over the current fiscal deficit figure as it is already
reached around 74% last month. As such, we may see some slowdown
in the Govt capex for the H2FY17.
Quite surprisingly, Jubilant Food CEO
& CFO resigned from the company after selling substantial
stake in the last few months. As its an expensive scrip in the
mid-cap category, this may also affect the "mid-cap frenzy"
sentiment in the coming days.
Today Nifty was supported by ONGC
(better GRM out look), Metals (Tata Steel/Hindalco for Govt plan
of additional import duty), Infratel, Pharma scrips (Cipla/Lupin
etc as US FDA fiasco may be bottoming out), Yes Bank (short
covering ??).
Nifty was mainly dragged by RIL, ITC,
SBI, Hero Motors, Adani Ports (Australian coal mine buy), Infy,
Tata Motors (JLR recall in US) and cement scrips.
SGX-NF
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