Nifty Fut Has To Sustain Above 8720-8755 For Any "Diwali Rally"; Slow Progress Of GST May Hurt Despite Positive Global Cues Inspired By Higher Probability Of Clinton Win

Market Mantra : 20/10/2016 (08:00)

As par early SGX indication, NF may open around 8690 (+30 points), following overnight positive US market (+0.22%) and morning Asian session.

Technically, NF has to sustain over 8720-8755* zone for further rally towards 8800*-8840 & 8900-8925* area for the day.

On the other side, sustaining below 8660-8620* area, NF may fall further towards 8580-8545 & 8500*-8465 zone as the day progress.

Similarly, for BNF (LTP: 19447), it has to sustain over 19580-19630* area for any further rally towards 19850*-19950 & 20000-20200* zone for the day.

On the flip side, sustaining be;low 19425-19330* area, BNF may further fall towards 19200*-19150 & 19040-18950 zone as the day proceeds.

Overnight US market closed in positive tone yesterday after mixed housing reports, better earnings momentum, rally in oil and some optimistic/mixed tone in the Fed Beige book.

Oil was supported by surprise US inventory draw down and some Saudi comments about OPEC production cut/freeze. But, the unexpected inventory data may be helped by some seasonal factors like demand of heating oil for the forthcoming winter season and the recent cyclone. 

In any way, technicals suggest that Crude Oil (LTP: 51.65) has to sustain over 53 for an near term target of around 58; otherwise it may come down towards 50-47 zone as reality of any OPEC production cut may hurt in the coming days.

Also, SPF (LTP: 2142) has to sustain over 2150-2160 area for any meaningful strength from here.

Globally, all eyes will be on the ECB & Draghi today. Although there is virtually no probability for any real policy action today, market will keenly watch Draghi press conference and Q&A session amid various speculation about probable ECB action in the coming months (Tapering/Twisting/Extension of QE). 

In any way, both ECB & BOJ are not expected to take any real policy action before Dec'16 (Fed action).

Back to home, Indian market sentiment may hurt to some extent as there was no consensus for GST rates yesterday and GST council will again meet in 1-st & 2-nd Week of Nov to finalize it just before Winter session of Parliament (time may be running out fast for smooth April'17 roll out schedule as there will be Budget preparations & state elections).

All eyes will be also on the earnings today (RIL/LICHSGFIN/Yes Bank) for a clue about hopes of overall double digit growth in Nifty EPS.

 SGX-NF

NSE-BNF