Market Mantra: 28/10/2016 (08:30)
As par early SGX indication NF may open around 8600 (-65 points) following fall in US stock fut and tepid global/Asian cues.
Technically, sustaining below 8630*-8590 zone, NF may fall towards 8560/40*-8500/8480-8450 & 8425/05* area for the day in the moderate bear case scenario.
For any strength, NF need stay above 8665-8705* area for further rally towards 8750-8790-8815 & 8850/75* zone as the day may progress under extreme bullish case scenario.
Similarly for BNF (LTP: 19593), immediate support is around 19500-19450* zone and sustaining below that it may fall towards 19350-19200* & 19150-19050*-18950 area for the day.
For any meaningful strength today, BNF has to trade above 19600-19650* area for further rally towards 19700/19800*-19950 & 20050* zone as the day may proceeds.
Overnight US market was weak amid theme of strong USD supported by upbeat economic data and bond yields & mixed earnings.
Early morning Asian sentiment was further subdued today as BOJ-Kuroda preferred some hawkish script in his testimony before Japan parliament and emphasized for structural reform rather than too much dependence on monetary stimulus. As par some reports, Kuroda may not get extension after his terms ends this year.
Overall, apart from the high probability of Dec rate hike by Fed, USD is getting stronger across G-10 currencies because of divergent monetary policy and various geo-political risks in EU (Brexit, French/German/Denmark election, Scottish referendum, EU/Italian banking crisis and don't forget about Grexit also). This may be one of the primary reason for increasing spreads between German & US bond yields despite recent set of upbeat economic data in EU/Germany.
Globally, all eyes will be on the US GDP today for further assessment of the underlying strength of the world's largest economy to handle the likely Fed rate hike in Dec'16 and further 1/2 hikes in 2017.
Apart from ongoing Q2 result & Tata fiasco, Indian market may also take cues from the increasing tensions at the Ind-Pak border, where an virtual "mini war" may be happening right now, just before Diwali Festival, which may take a serious turn with US elections just two weeks left.
After 'Cyexit" debacle, there is some positive news for Tata Steel (Qubec will take its 18% stake in Canada mine) and it also reaffirmed about its strategic restructuring plan in UK/EU. Though these news are noting new, it will be very interesting to see, how the market react to the news.
SGX-NF
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