Market Mantra: 8530-8480 May Be Interim Support For Nifty Fut---Surprise Fall In CPI May Help

As par SGX indication, NF may open around 8590, almost flat following some recovery in overnight US market.

Technically, NF has to sustain over 8565-30* area; otherwise it may fall towards 8485/65*- 8415/8395 zone for the day.

For any meaningful strength, NF need to stay above 8610/55* area for further up move towards 8695/8715*-8750/75 zone for the day.

But, probable weekly close for NF below 8750 area may be still negative for the overall market in the short to mid term.

Similarly, for BNF (LTP: 19022), immediate support may be around 18800* area and sustaining below that, it may further fall towards 18700/650*-18400 zone for the day.

For any strength, BNF need to stay above 19050-150* area for further intra rally towards 19200/250*-19375/600 zone for the day.

Any weekly closing below 19600 for BNF, technical picture may be still bleak for the short to mid term, despite some intra bounce.

Overnight US market recovered to some extent from deep loses as bad China trade data may be an excuse for Fed to be on the sideline in Dec'16. 

But, later better than expected drop in US jobless claims and hawkish scrips by a Fed member again convinced the market for a definitive rate hike by Fed in Dec affected the sentiment and US market closed down by only 0.25%.

Better inventory data also helped the oil & "risk on" sentiment to some extent. For SPF (LTP:2125), immediate support is around 2115-05 and it has to sustain above at least 2140-50* area for any meaningful rebound. Today's US retail sales & Yellen speech may provide some volatility.

Today's morning China CPI data (1.9%) also came above market expectation (1.6%) and PPI also came above zero (+0.1%) after many years. This may be also an indication that Chinese economy is stabilizing and undermine yesterday's tepid trade data, which may be seasonal in nature. Subsequently, again USD is getting some strength as China jitters fear may be waning (a real catch-22 situation indeed !!).

Also, there is still concern about Brexit uncertainty as UK goes to parliament to debate it and there is also a case is going on in the HC there. 

But, as par EU official, there is no scope for any "Soft Brexit" and alternative of any "Hard Brexit" is only "No Brexit". Thus , it may be a double whammy for UK as well as the whole EU concept.

Among all these global headwinds, India has some tailwinds in the form of sudden fall in CPI (4.31%), which may ignite some rate cut hopes in Dec'16 by the RBI again.

But, with 3M average CPI at around 5.15% and transmission issues along with 7-CPC induced probable inflationary impact, Patel/MPC may prefer to watch more data & WPI trend before any real action in Dec'16 and may cut in Feb'17.

As par some reports, Govt may be also planning to boost some extra capex (50000-60000 cr) in H2FY17 for infra spending and this may also help the Indian market sentiment.