Nifty May Be Under Pressure Amid Tepid Domestic Cues Marked By Probable Delay Of GST, Poor IIP, Strong USD & Surging Oil Despite Positive Global Cues; All Eyes Will Be On Demonetization Led Economic & Political Disruptions And CPI Data

Market Mantra: 12/12/2016 (08:30)

Watch 8225-8175 & 8310-8335 Zone In Nifty Fut (Dec), Which May Open Around 8240 Today

Will domestic market “celebrate” the possible delay of GST to Sep’17(??) as economy can’t withstand two successive disruptions due to demonetization & GST? 

It may be “yes or “no”, but FII(s) may not be “amused” at all for successive delays of GST.

As par early SGX indication, Nifty Fut (Dec) may open around 8240 (-35 points), slightly in negative note despite positive global cues.

Domestic market may be under pressure ahead of Fed, strong USD, surging oil and domestic headwinds of demonetization led economic & political disruptions.

Apart from tepid projections of GDP data, which may slump around 2% or more along with 50-10% downgrade of corporate earnings in the coming quarters, market may also take note of statement of various state FM(s) that they may suffer almost 40-50% hit in their indirect tax revenues as an immediate fall out of the demonetization.

Demonetization is fast turning into a political rhetoric now and GST may be one of the victims of that. As par yesterday’s GST council meeting indication and statements of various state FM(s) and the FM of the country, GST may be not possible to implement by April’17 for lack of consensus on dual control. Also, state FM(s) are wary of demonetization led economic disruptions in the states, which also vitiated the whole political atmosphere of consensus and spirit of the Parliament in passage of the GST bill wholeheartedly.

Although, delay in implementation of GST may be also seen as non-disruptive for the short term by the market, its successive failure may be also an indication that Govt as well as the opposition political parties may also be pre-occupied by its political rhetoric rather than economic reform agenda and in that scenario, FII(s) may not be “amused” at all in the coming days.

Technically, NF has to sustain over 8225-8205* zone today; otherwise it may further fall towards 8175-8125* & 8080-8040* area today (bear case scenario).

On the other side, for any strength, NF need to sustain above 8285-8310* area for further rebound towards 8335-8385* & 8435*-8485 zone for the day (bullish case scenario).

Similarly, BNF (LTP: 18720) need to stay above 18775-18850* area; otherwise it may further fall towards 18650-18450* & 18350-18200* zone for the day (bear case scenario).

For any strength, BNF needs to trade above 18900-18950* area for further rebound towards 19050*-19100 & 19250-19350* zone for the day (bullish case scenario).

 SGX-NF