Nifty May Open In Positive As "Wall Street" Greeted "Prez" Trump With Over 1000 Points Rally (From The Day Low) For Hopes Of Fiscal Spending--Watch 8480-8545 In NF

Market Mantra: 10/11/2016 (08:15)

As par SGX indication, NF may open around 8500 (+21 points) after overnight rally in US stock Fut (+1.40%) and above 1000 points rally in DOW Fut from the day's low after "impressive" maiden speech by "President" Trump, which is quite different from his earlier rhetoric as "Candidate" Trump.

The market gave "thumbs up" to this "historic" transition of power in White House with absolute control of one party (Republican) and it was "business as usual", departing from the earlier "fear psychosis" of  an "unpredictable" Trump.

But more importantly, Trump's commitments of "doubling the GDP growth" of USA in his victory speech & earlier speeches during election campaign may have also ignited a hope for huge fiscal spending, specially in the rebuilding of ageing American infrastructure and that's propelling the USD.

Moreover, Trump's plan for lower corporate taxes and the higher fiscal spending (structural stimulus) has may prompt for fore US growth. This plan may also increase US fiscal deficit & inflation, which may prompt the Fed for rapid rate hikes in 2017-18 and this may one of the reason for Bond's blood bath yesterday (US TSY) despite so much "uncertainty" is still associated with the "Real Donald Trump" in the Oval office.

For EM(s) as well as Indian market, an incrementally strong USD may not be good at all as there may be significant risk for a huge out flow despite India being one of the "sweet spot" in the global economy. FII (s) may be the main driver of Indian market as too much hot money is chasing too little quality scrips (India's effective market capitalization in dollar terms may not be huge). 

For global market, China jitters may be a bigger risk because of strong USD (weak Yuan) and Trump's election goal of trade & employment barriers in the own interest of US economy.

As Trump "phobia" may be over, domestic market may concentrate on ongoing Q2 earnings, effect of black money war on Indian consumption story, progress of GST implementation on the ground and forthcoming budget, state elections and ongoing tensions at LOC.

Technically, NF has to sustain over 8485-8510* area for further bounce back towards 8545*-8595 & 8620/8655-8705* zone for the day (bull case scenario).

On the other side, sustaining below 8450-8415* area, NF may further fall towards 8365*-8315 & 8260*-8210 zone for the day (bear case scenario).

Similarly, BNF (19624), has to sustain over 19650-19725* area for further rebound towards 19825-19950* & 20050-20200* zone for the day (bullish case scenario).

On the other side of trade, sustaining below 19600-19500* zone, BNF may further fall towards 19400-19300* & 19150-18980* area for the day (bear case scenario).

SGX-NF

BNF