Market Mantra: 02/11/2016 (08:15)
As par early SGX indication, Nifty Fut (NOV) may open around 8565 (-90 points) following negative global cues amid US election uncertainty and pressure on oil.
Looking at the chart, NF has to sustain over 8540 zone; otherwise it may further fall towards 8500-8465* & 8440-8400* area for the day.
For any intra rebound, NF need to stay over 8600 area for further up move towards 8640-8675* & 8705/8730*-8790 zone as the day may progress.
Similarly for BNF (LTP:19480), immediate support may be around 19230 area and sustain below that it may further fall towards 19125*-19000 & 18950-18850 zone for the day.
On the other side, for any strength, BNF need to trade above 19375 zone for further up move towards 19500*-19630 & 19700-19900 zone as the day may proceeds.
Overnight US market closed lower (-0.58%) and more over US stock Fut is also trading in negative zone (-0.40%) on lingering concern about US election outcome as the latest poll (ABC/WP) indicates yesterday that Trump is slightly ahead of Clinton.
Although, overall, Clinton still is the favorite as par various other polls, there is still significant uncertainty after FBI decided to probe the latest mail saga of Clinton amid daily doses of Wikileaks revelation. Wiki also promised something more damaging for Clinton just ahead of the crucial election date (08/11/2016). As market does not like such uncertainty, smart money may be flying to the safety of Yen & Swiss Franc and USD & "risk trade" is being doomed. All eyes will be on another poll from ABC/WP today. This 2016 US election may be quite different from earlier "routine" election.
Thus, market sentiment is now driven purely by US politics rather than economics and Fed meet. Yesterday's US economic data was better except construction and PMI/ISM MFG data was good. Overall, for the last few months, US economy may be improved a bit on the back of better retail sales, MFG activity, US corporate earnings and inflation.
But, US job growth was below expected and consumer confidence was also tepid for lack of stable jobs having decent income and ongoing US election jitters. Still, if Fed goes by the text book, its bound to hike in Dec'16 or should have hiked earlier. But various geo-political events (China jitters, Brexit, US election risk) has kept the Fed in sidelines.
Now, even if Clinton wins this time, there will be still some uncertainty about the ongoing FBI probe into the latest series of Clinton mails. The market will give relief rally before US election day, only if FBI "finished" its so called investigation and "cleared" Clinton from all types of doubts.
Thus, Nov-Dec period may be double whammy for the market as "Trumpism" may itself cause significant melt down of the "risk on" trade and on the other side, a Clinton win may bring the stability, but market may also doomed as Fed rate hike will be almost certain by Dec'16 then.
All eyes will be also on the Fed's official statement tonight for an assessment of the high probability Dec rate hike (if there is no US political shock).
Technically, SPF (LTP:2097) need to sustain over 2080-2110; otherwise it may fall more.
Among all these global jitters, Indian market may open lower today, which was already under some pressure for increasing tension at LOC/Border with Pak and Tata-Mistry fiasco.
Domestically, all eyes will be on the ongoing Q2FY17 earnings & guidance and progress of GST on the ground (dual control & rate fixation).
SGX-NF
NSE-BNF
S&P-500 FUT(SPF)
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