Nifty May Be Under Stress After Opening Flat Following Tepid Global Cues Marked By Fear Of “Hawkish Fed” & PBOC Tightening Amid Ongoing Domestic Headwinds Of Demonetization Led Economic & Political Disruptions

Market Mantra: 13/12/2016 (08:30)

Watch 8225-8325 & 8195-8080 Zone In Nifty Fut (Dec), Which May Open Around 8190 Today

All eyes will be on CPI data today after market hours.

As par early SGX indication, Nifty Fut (Dec) may open around 8190 (+7 points), almost flat amid following tepid Global/Asian cues.

In the morning, China IIP & retail sales data for Nov came above market expectations and the upbeat data may force PBOC for some tightening keeping in line with the impending Fed hike. Also, some regulatory clampdown on some specific institutional clients (insurance companies) in China for restrictive market access is causing some pressure on the risk trade.

After reaching nearly $55, oil is also under some pressure as focus now shifting on implementation of the OPEC cut plan and US Bond yields also dropped towards 2.47% after hitting high of 2.53% yesterday as Fed rate hike of 0.25% is almost discounted by the market. Going forward, Fed’s dot plots & forward guidance (inflation & GDP projection) may matter most on 15^th Dec, rather than the official rate hike announcement.

Back to home, all eyes will be on the CPI data today after market hours in order to assess the immediate impact of demonetization on the core as well as food inflation (estimate : 3.90%; prior: 4.2%).

Headline CPI below 3.90% on a consistent basis may force RBI to consider a 0.25% rate cut in its forthcoming Feb’17 policy meeting.

With all focus on the ongoing economic & political disruptions as a result of the demonetization fiasco, market may also keenly watch the actual progress of remonetization & GST on the ground.

Technically, NF has to sustain above 8225-8265* area for further rebound towards 8300/8325*-8375 zone for the day (under bullish case scenario).

On the other side, sustaining below 8195-8150* area, NF may further fall toward 8125/8080*-8040 & 7980*-7900 zone for the day (under bear case scenario).

Similarly, BNF (LTP: 18425) has to sustain over 18700* area for further rebound towards 18775*-18850 & 18900-19100* zone for the day (under bullish case scenario).

On the down side, sustaining below 18350* area, BNF may further fall towards 18200*-18000 & 17900-17850* zone for the day (under bear case scenario).

SGX-NF

BNF