Market Mantra: Watch 8835-8755 In Nifty Fut Amid Talk Of ECB Tapering & Positive Domestic Cues Led By IMF GDP Guidance

As par early SGX indication, NF may open around 8800 area almost flat.

Technically, NF need to sustain above 8835-55* zone for further rally up to 8875-8900* area today.

On the downside, sustaining below 8795-60* zone, NF may fall further towards 8715/8665* area today.

 

BNF (CMP:19808) need to sustain above 19950-20000* area for further rally towards 20280-20350* & 20450 zone.

 

On the downside, sustaining below 19725, BNF may fall towards 19550-19450 & 19300 area today.

Overnight US market closed lower by 0.47% amid talks of early ECB bond buying tapering. As par some unconfirmed reports, ECB may begun its tapering from Dec'16 to March'17 instead of extending the time period of it. 

Although, Draghi/ECB later denied about such plan being discussed in the Gov Council, there is "no smoke without a fire" and some section of the market participants do believe that due to increasing non-availability of eligible bonds, ECB may have no other effective option either. 

But, its also hard to believe that with so much geo-political risks as hand (Real Brexit, US Election etc), ECB is going to taper in Dec'16. May be they will wait for further cues till March'17.

Among all these talks of ECB early tapering, contagion fear of "Real Brexit" coupled with good sets of US economic data/theme of Dec hike by Fed, USD is getting stronger and there is some sense of  "risk aversion" and Gold is also being doomed.

Back to home, after RBI's "Diwali Gift" yesterday, Indian banks has promised to transmit the overall rate cuts in a phased manner as par evolving liquidity scenario. ICICI has cut its MCLR by a mere 0.05% yesterday; hopefully more banks will follow shortly.

Indian market sentiment may got some boost after IMF projected better GDP growth for 2016-17 at 7.6% from previous guidance of 7.4%; although it has painted a tepid global growth scenario including US & China. IMF banked on India's trade volume, effective policy actions, stronger external buffers and tax reforms (GST). But it also warned about India's subsidy wastage towards unproductive areas of the economy and instead advised the policy makers to give more focus on basic needs of the country like drinking water, education, health care and infrastructure.

Today steel counters may be in focus because of last minute extension of the MIP for another two months, but it may be another indication that, Govt is still not confident enough for the overall outlook of the sector and its effect of the stressed assets scenario for the banks.

Analytical Charts:

 SGX-NF

NSE-BNF