As par early SGX indication, Nifty Fut (Oct) may open around 8660, almost flat.
Technically NF need to sustain above 8675
zone for further rally up to 8705/25-8755/85-8825/75* area
in the immediate to short term.
NF need to sustain over 8825 area in the short term to regain its upwards momentum towards 9000 zone.
On the other side, sustaining
below 8625 area, NF may fall towards
8560/30*-8470/40-8380/50 in the immediate to short term.
Below 8530-8470, NF will be weak further and may target 8000 area in the coming days.
On Friday, overnight US market rallied by almost 1% amid speculation of Deutsche Bank settlement by US-DOJ by much more lower amount of $5.4 bln against original fine of $14 bln. But, later as par some other reports, this is not confirmed and negotiation is still going on.
But, it was not so much unexpected considering the status of DB ("too big to fall") and overall systemic impact of a failure for EU as well as for the global financial market. Apart from the DB, some other prominent banks of EU like Credit Suisse, Barclay are also in the dock for this 2008-09 US mortgage related fines by the DOJ. Eventually, DB may be bailed out, but there may be some serious lack of confidence in the minds on the investors also.
Yesterday, UK PM confirmed about invoking Article-50, which will kick start the official "divorce" process from the EU. Although, this is also expected & GBP already reacted for the last few weeks, we may see some volatility after EU spot market opens in the noon.
Overall, global market is not fully discounted yet for a "Real Brexit", considering the widespread possible contagion effect of it on some other EU nations and uncertainty in the UK itself. Few corporates will invest fresh and expand in UK, until it reaches fresh trade agreement and the overall environment of uncertainty clears. All eyes will be on the forthcoming Italy referendum in the coming days. ECB & other central banks may not have any "real bazooka" for this probable contagion effect of "Real Brexit".
Yesterday, there was another serious attack on the Indian BSF post in J&K (Baramulla) by Pak sponsored terrorists in a series of such recent attempts and several cease fire violations. The fact that Pak Army/Govt has denied officially India's "surgical operations" on the POK terror hubs, it may be an indication that Pak Army will not prefer an "official retaliation" (direct war) for the time being.; instead it may take the path of terrorist attacks more vigorously in the days ahead. As par some reports, they are activating its sleeper terrorist cells at various locations of India and may be planning some targeted attacks in the festive times of India (Oct).
Another point is that, to be very decisive, India may need to destroy the whole "terror machines" in POK and for that one "surgical strike" may not be enough. India need to take control of the POK and has to destroy all the "terror hubs" systematically (like US did in Afghanistan/Laden after 9/11 attack). But, under the present geo-political scenario and considering the lack of hi-tech warfare by India (unlike US), it may not be possible in the foreseeable future.
So Pak sponsored terror hubs may continue their hilarious attacks at time & place in India of their chosen in response to the "surgical strike" and that may be some of the bigger headwinds for our market and confidence of FPIS.
All eyes will be on the RBI/MPC policy announcement tomorrow. Although, there are strong market talks about 0.25% "Diwali Gift" (rate cut) this time, RBI may also be on hold with a "dovish/owlish" outlook simply because of divergence between the Aug CPI & WPI.
RBI may prefer to watch more evidences on the ground about actual inflation trajectory in the Oct-Nov and depending upon that, may cut by 0.25% in Dec'16.
Also, RBI may prefer to give more focus on existing rate cut transmissions by the banks & effective resolutions of the overall NPA/NPL situations of the Indian Banking system, specially for the PSBS. Any disappointment by the RBI tomorrow may trigger some volatility, specially for the rate sensitive stocks.
SGX-NF
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