Watch
7920*-7880 & 8040-8080* Zone In NF
Market Mantra: 24/11/2016
(08:30)
As
par early SGX indication Nifty Fut (Nov) may open around 7965 (-60 points) as
USD/DXY is gaining strength after yesterday’s FOMC minutes (Nov; Pre-Trump
victory date) show confidence among Fed members for a near term (Dec’16) rate
hike with some cautious approach for justifying its own credibility.
The
hawkish FOMC minutes along with upbeat/mixed US economic data deluge yesterday
is making USD stronger across the board and Chinese Yuan is now trading below
its June’2008 low around 6.91 and various EM/Asian currencies are also at their
7 years low. As par some reports, Yuan may fall towards 7.20 by next few months
and that may cause significant headwinds for the global financial market (risk
assets) as it was in last year after Fed’s Dec’15 rate hike.
Another
point is that, “Trumponomics” may spar similar fiscal/infra spending among
various others DM, which may prompt for more capital outflow out of EM as days
of easy money policy (QQE) may be over.
Australia just announced a massive infra spending package of around $80 bln.
Mere talk of “Trumpflation” & more fiscal spending rhetoric by “Trumponomics”
caused the Yen significant weakness in a matter of two weeks, which BOJ couldn’t
achieve despite decades of QQE & months of verbal jawboning. Thus, going forward,
we may see less reliance on monetary policy (QQE) and greater thrust on fiscal
spending intended for the “real street” in order to create jobs and also spur
the required inflation or stagflation (??).
India,
being one of the key beneficiaries of the global”easy money” (liquidity) may be
also quite vulnerable for this expected out flow, which is already happening.
One
of the reasons for India being a “sweet spot” in the global economy may be its
appeal of 3-D (democracy, demography & demand). Now, after the current demonetization
led business disruption, which may be temporary in nature as cash supply will
definitely improve in the coming days, the overall collateral damage may be
more than the intended benefit.
After the demonetization & the "war on black money", demand factor may be in serious question.
After the demonetization & the "war on black money", demand factor may be in serious question.
As
Indian consumption story may be much dependent on the so called “black/unaccounted
money”, be it in cash or in some other forms, the sudden “surgical strike” and continuing
“war” stance of the Govt on this “black money” may hurt the overall consumer
demand, GDP and also the earnings of the corporate India in the mid to long
term (at least next five years).
Technically, NF has to
sustain over 8040* zone for further rebound towards 8080*-8160 area for the day
(bullish case scenario).
On the other side, sustaining
below 8020* area, NF may further fall towards 7960-7920* & 7880-7800* zone
for the day (bear case scenario).
Similarly, BNF (18530)
has to sustain above 18750* zone for further up move towards 18850-18950* &
19050*-19250 area for the day (bullish case scenario).
On the other side,
sustaining below 18350* area, it may further fall towards 18200-18100* &
17850*-17540 zone for the day (bear case scenario).
NF
BNF
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