Friday 21 October 2016

Nifty May Be Subdued Today On The Back Of Mixed Global Cues Amid Strong USD & Confused ECB; Watch 8615-8755 For NF

Market Mantra: 21/10/2016 (08:00)

As par early SGX indication, NF may open around 8695 (-14 points) following overnight weak closing of US market (-0.22%) and subsequent mixed morning Asian cues.

Technically, NF has to sustain over 8735-8755* zone for any further rally towards 8775/8800*-8840 & 8895-8930 area for the day.

On the other side, sustaining below 8680-8660* zone, NF may further fall towards 8630/8615-8580 & 8545-8490 area as the day proceeds.

Similarly, BNF (LTP:19676) has to sustain over 19800-19850* area, for further rally towards 19950/20000*-20200-20275 zone for the day.

On the flip side, sustaining below 19600* zone, BNF may further fall towards 19500*-19400/19340 & 19200 zone as the day progress.

Yesterday's much awaited ECB meeting and Draghi comments was some how confusing. ECB left rate unchanged as highly expected; but some of the comments made by Draghi, such as ECB did not discuss QE extension, followed by ECB will not end QE in a disruptive manner and an initial comment that QE can't go on fore ever may be self contradictory itself. Although, Draghi was able to keep his dovish stance, market is now expecting that ECB may announce some extension of the current QE, which is scheduled to end by March'17 by a cumulative addition between EUR 500 bln to 1 tln up to March'18. Thus, it may be a tweaking/twisting instead of an earlier report of tapering.

All these ECB drama & yesterday's good sets of US economic data and tepid UK & AU data has made USD stronger across the board and "risk assets" (EQ/OIL/GOLD) is under some pressure today.

Back to home, Indian market may focus more on ongoing Q2 earnings, specially on RIL, which published its numbers after yesterday market closing.

Overall, at a glance standalone PAT is slightly above estimates, but consolidated PAT is below Bloomberg estimates. GRM is almost at par estimate at $10.1; but net debt surged quite significantly, which is making the earlier status of RIL as a "Debt Free" company dubious now, because of huge capex in R-JIO.

Although, at a glance, it may appear that R-JIO is offering the lowest data rate on earth, there are many T&C there and to poach high end data users  like Corporate/Office/SOHO segment, consuming at least 30-50 GB of data, it need to bring down its rate to 30-10 per GB against its current average of 50/- per GB. Airtel, R-COM and also BSNL is now offering data to high end users at around 10/- per GB under some special scheme to counter aggression of R-JIO. So, it may be not a smooth sailing affair for R-JIO despite its so called "Datagiri & Dadagiri" approach in the marketing blitz. Small consumers & FB/WA lovers may not help the huge structure of R-JIO in the long run.

Technically, at a glance RIL need to sustain over 1115/35 & 1150* area for further rally towards 1200-1260 area; otherwise it will come down towards 1050-975 area in the months ahead.




 SGX-NF



 NSE-BNF

 




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