Market Mantra: 26/10/2016 (08:00)
As par early SGX indication, NF may open around 8665 (-38 points) following over night & morning fall in US stock FUT (overall -0.50%) and negative Asian cues.
Looking at the chart, sustaining below 8660-8640* zone, NF may further fall towards 8580-8545* & 8500-8465* area for the day.
For any meaningful strength, NF need to stay above 8705-8720* area for further rally towards 8760*-8800 & 8840-8895* zone as the day may progress.
Similarly, for BNF (LTP:19851), sustaining below 19700-19650* area, it may further fall towards 19450*-19300 & 19100-19000 zone for the day.
On the other side, for any strength, BNF need to stay above 19900-19975* area for further rally towards 20050-20200* & 20300-20350* zone as the day may proceeds.
Overnight US market was weak following mixed earnings and economic data. US consumer sentiment was weak, apparently for lack of suitable job openings just ahead of election. Guidance given by Apple was tepid and that's also dented the early Asian sentiment.
Overall, recent sets of good economic data in EZ/Germany, coupled with some hawkish script by BOE yesterday put the USD in some kind of pressure. Also, as par some reports, gap of approval rating between Clinton & Trump is again narrowing with US election just two weeks away.
But, despite dip in US consumer sentiment in yesterday's data, overall incoming US economic data including the consumer sentiment itself is well above Fed's red line on an average and FFR is now indicating almost 75% probability of Dec'16 rate hike.
Yesterday, dollar index briefly breached 99 and then some profit booking may happen with US yields falling.
Crude oil slipped to around $49 amid various squabbling by OPEC and a private report shows sudden build in inventories, specially gasoline.
Back to home, apart from the ongoing tussles of Tata & continuous cease fire violations in Ind-Pak border just ahead of Diwali Festival, sentiment of Indian market may also be subdued for poor results by Axis/IDBI Bank (well blow consensus) & Bharti (although better than consensus).
The sudden sharp rise in stressed assets for Axis & IDBI bank may be also an indication that NPA cycle may not be over yet for Indian banking system and they are still struggling to cope with the huge burden of stressed assets.
More importantly, there is no taker/buyer for stressed assets, who can replace the existing management with another suitable one, having related professional expertise. So, even if banks acquire those ailing stressed assets, it will be very difficult to rejuvenate it and make an effective resolution of the NPA/NPL for them as the actual issue may be more structural, rather than some specific corporate groups.
NSE-BNF
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