Market Mantra:
17/11/2016 (08:30)
As
par early SGX indication, Nifty Fut (Nov) may open around 8120 (+21 points)
following flat global cues after weak US economic data overnight, which made a
pause for the surging US bond yields and USD fall slightly from the recent
record high.
USD
is also under some pressure as market may be slowly realizing that despite “President”
Trump sounds quite different than “Candidate” Trump (pre-election rhetoric),
there are still some elements of uncertainty and unless & until Trump
release any specific plan about his fiscal stimulus and funding mechanism
without hurting the US fiscal deficit too much, the overall notion of “Trumponomics”
may be treated as simple jawboning.
But,
growing EU political risk (Brexit & coming referendum and elections in
various EU countries) may be another reason for strength in USD apart from “Trumpflation”
and a strong USD may not be good for EM currencies including India.
Overnight,
volatility in crude oil was remarkable amid unexpected built up in inventories
and various OPEC squabbling. Although, Russia & Saudi are now apparently
trying for an output freeze/cut, Iran & Iraq may not join with this deal at
all. Also, Trump’s policy of pumping more US oil and less reliance on its
import may hurt the sentiment going ahead and in case there will be no formal
OPEC deal by this month, a capitulation of oil may be stared again towards $33-25
level.
Domestically,
along with the ongoing fears of “war on black money” & demonetization
effect on the consumption story, all eyes will be on the political battles and
progress of GST.
Overall,
considering all the scenarios, April’17 roll out of GST may looks quite
difficult at this point of time as Govt as well as the oppositions are too much
pre-occupied with the demonetization politics and real economic activity has
hurt quite remarkably also. Under this circumstances, both Govt & business
community may not be prepared for a countrywide implementation of GST by Aprl’17
as time may be running out.
Moody’s
yesterday kept the rating of India at the same grade with positive outlook.
Although, Indian Govt has perusing various reforms in a great way, lack of
proper implementation and its effect is not yet visible on the real economy. It
has also cautioned the Govt against burgeoning public debt and lack of private
investments (issue of twin balance sheet).
Yesterday,
Indian market sentiment may be affected in the last hour after Nascom slashed
IT earnings for FY-17 by around 3%. There was visible selling pressure for the
IT scrips at the last half an hour of trading, which gave some support to the
overall market sentiment initially.
Technically, NF has sustain
above 8075-8045* zone today; otherwise it may fall further towards 8000/7975
& 7925/7900* area for the day (bear case scenario).
For any strength, NF
need to sustain above 8155-8185* zone for further rebound towards 8230-8270*
& 8330-8385* area for the day (bullish case scenario).
Similarly, BNF (LTP:
19140), need to sustain above 19095-19000* area; otherwise it may further fall
towards 18850-18700* & 18550-18450/340* zone for the day (bear case
scenario).
For any strength, BNF
need to stay above 19250-19350* area for further up move towards 19500-19600
& 19850-19950* zone for the day (bullish case scenario).
For
the last few days, after the demonetization fiasco, Banks were supportive for
the overall market because of greater CASA collection and eventual reduction in
cost of funds. But that perception is now slowly changing as banks may also
face incremental growth in NPA/NPL as cash-flow of the economy may be greatly affected
going forward.
SGX-NF
BNF
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