Nifty (Fut) May Open Gap Down Around 8500 Amid US Election Jitters And Refusal Of S&P For Any Immediate Rating Upgrade (India)--Watch 8480-8545 Zone In NF Closely

Market Mantra: 03/11/2016 (08:15)

As par early SGX indication, NF may open around 8500 (-50 points) amid negative global cues on the back of ongoing hangover of US Election outcome anxiety, fall in oil. 

Although, as par the current US stock Fut level, SGX Nifty should trade around 8550 level, the apparent under-performance may be due to the fact that S&P yesterday refused to upgrade Indian rating despite high expectations by the policy makers (Govt). 

S&P basically indicated that there is virtually no probability of any rating upgrade before 2018 and by that time 2019 election momentum will come and eventually, S&P may look for any upgrade only after 2019 election, after full implementation of various reforms policy undertaken by the Govt. 

Also, India lacks labour & land reform and along with that the "pain of twin balance sheets" may be a serious obstacle for any rating upgrade by S&P and some other global rating agency too (Moody's) despite some "green shoots" in the Indian economy.

Technically, NF has to sustain over 8480*-8450 area; otherwise it may further fall towards 8405*-8350 & 8260-8205* zone for the day in the worst case scenario.

On the other side, for any strength, NF need to stay above 8545-8585* area for further intra rebound towards 8610-8670* & 8705-8750* zone in the mild bullish case scenario (dead cat bounce ??).

Similarly, BNF (LTP:19322), need to sustain over 19150-19095* area; otherwise it may further fall towards 19000*-18850 & 18680-18600* zone for the day.

For any strength, BNF need to trade above 18250* area after gap down opening today and in that scenario, may further rally (intra) towards 19400*-19500 & 19625*-19750 zone as the day progress.

Yesterday's Fed meet may be a non-event, considering the US political uncertainty, which is mainly driving the market now. Overall Fed statement may be termed as "Hawkish/Owlish" and barring any "unforeseen"  situation ("Trumpism"), Fed is well prepared for the much anticipated Dec'16 rate hike.

FFR is now indicating around 78% probability of Dec rate hike against 68% yesterday after Fed statement. Despite that USD is under pressure simply because of US Election issues as Trump & Clinton is contesting almost neck to neck.

Apart from US Election issues, all eyes will be also on the BOE today and tomorrow's US NFP job data.

Oil was also under immense pressure after surprise inventory built up report yesterday, which is the highest in the last 34 years (??), but may be due to seasonal factors too.

Domestically, all eyes will be on the GST meet today & tomorrow, where some multiple rates may be finalized with consensus (??).

But ongoing duet between Tata & Mistry and escalation of gun battles on the LOC may also drag the sentiment of the domestic market. Also, all eyes will be on the domestic politics & the forthcoming state elections outcome as political noise become louder day by day with various issues.

 SGX-NF

NSE-BNF