Market Mantra: 18/11/2016
(08:30)
As
par early SGX indication, Nifty Fut (Nov) may open around 8080 (-20 points)
following negative global cues after Yellen “almost confirmed” about Dec’16
rate hike by Fed and also hinted about gradual rate hike next year (most
probably 2 rate hikes in 2017) in order to ensure that Fed does not fall behind
the curve. But, she also cautioned about excessive fiscal stimulus by “Trumponomics”,
which may cause excessive “heat” (inflation) in the economy.
Thus,
overall stance of Yellen in yesterday’s testimony is quite hawkish and USD is
gaining strength across the board coupled with EU political risk, dovish stance
of ECB & BOJ. Only GBP is showing decent strength against USD as a result
of UK’s upbeat retail sales data yesterday.
Another
factor is that yesterday’s US economic data was quite good beating the
consensus and coupled with that China’s effort to control the “hot” property
market and restructuring the steel production overcapacity has resulted in some
dips in commodity currencies. Oil is also under pressure after OPEC squabbling
and report that the proposed cut/freeze in production may be valid for only six
months.
As
a result, dollar index (DXY) is now at multiyear high around 101.35 eyeing
101.75-102.50 levels in the days ahead and in that scenario, USDINR may also
target 69-71 levels, which may also cause some panic among FPI(s) and fund out
flow may accelerate.
Domestically,
after plunge in market sentiment as a result of NAMO’s “war on black money”,
demonetization and ongoing political battle; Govt is perusing various incremental
reforms in an effort to stabilize the market.
Indian
Govt yesterday eased the corporate bond investments rules by the FPI(s) in an
effort to attract more investments in the country. But, this may be also
interpreted as a “panic reaction” from the Govt and the sentiment is so gloomy
on the concern of India’s great story of consumption because of sudden “surgical
strike” on the “black/unaccounted money”, this initiative at this juncture
which was a part of FY-17 budget may be too late & too little.
Technically, NF need to
sustain above 8035 zone today; otherwise it may further fall towards
8000/7975-7925/7890* & 7755-7675 area for the day (bear case scenario).
For any strength, NF
need to stay above 8125 area for further bounce towards 8155/8175*-8210/8225
& 8265*/8300-8355/8395 zone for the day (bullish case scenario).
Similarly, BNF (LTP:
19213), need to sustain above 19150 zone; otherwise it may fall towards
19040-18950* & 18850*-18700 area for the day (bear case scenario).
For any strength, NF need
to stay above 19400 area for further rally towards 19500-19650 &
19850-19950* zone for the day (bullish case scenario).
SGX-NF
BNF
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