Market Mantra: 09/12/2016
(08:30)
Watch 8335-8385 & 8280-8225 Zone In
Nifty Fut (Dec), Which May Open Around 8280 Today
Extension of hybrid QE by Draghi may be
more beneficial for US fiscal spending plan rather than EM; US bond yields
& USD may be stronger in the coming days
As
par early SGX indication, Nifty Fut (Dec) may open around 8280 (+27 points)
following another record close of US market amid further rallies of transportation,
industrials & financial sectors after Draghi’s “Santa Gift” of QE-Hybrid
extension.
Although,
yesterday’s ECB “bombshell” of buying bonds at the reduced rate of EUR 60
bln/pm was apparently felt as a “beginning of a partial tapering”, on closer
scrutiny, it came as 60 bln/pm for 9 months (till Dec’17) against market expectations
of 80 bln/pm for 6 months after March’17. Thus ECB is actually buying more
bonds of 540 bln against earlier perception of 480 bln. Some section of the
market was also expecting an average 500 bln EUR total bond buying extension
for 2017.
Thus,
ECB decision yesterday may not be a significant surprise in the back drop of
increasing EU political & banking risks and some improvements in overall macroeconomic
situations there. ECB is also ready to buy bonds below its deposit rates at
negative rate (?), if such situation occurs and overall tone of Draghi was
quite “dovish” and clearly it intends to keep EURUSD in a range of 1.10-1.00
(parity) in the months ahead to take benefit of an weaker currency for the sake
of EU/EZ economic/export advantage.
Thus,
going ahead, due to policy divergence between ECB/BOJ & Fed and also for
the other G-10 economies including RBI, USD may gain more strength and USDINR
may hover around 70-72 in FY-18.
Back
to home, all eyes will be on the ongoing demonetization & political
disruptions, various efforts of the Govt for a quick remonetization & digitization
of the economy, progress of GST and forthcoming budget. Market may be also
assuming a “big bang” spending budget from this time (incremental Govt capex),
with nearly all the “idle & black money” now in the banking (formal
system). But, in reality, it may not be so easy.
Technically, NF has to sustain over
8310-8335* area for further rally towards 8385*-8415 & 8485*-8545 zone for
the day (bullish case scenario).
On the other side, sustaining below
8280-8255* area, NF may further fall towards 8225/8210-8170* &
8155/8125*-8060 zone for the day.
Similarly, BNF (LTP: 18535) has to
sustain over 18700-18775* area for further rally towards 18900-19050* &
19100-19300* zone for the day (bullish case scenario).
On the down side, sustaining below
18600-18550* area, BNF may further fall towards 18400-18350* & 18200-18100
zone for the day (bear case scenario).
SGX-NF
BNF
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