Nifty May Open Lower & May Be Under Stress Amid Tepid Global & Domestic Cues

Market Mantra: 23/12/2016 (08:30)

Watch 7980-7940 & 8035-8075 Zone In Nifty Fut (Dec), Which May Open Around 7975 Today

As par early SGX indication, Nifty Fut (Dec) may open around 7975 (-30 points) following tepid global/Asian cues, strong USD and ongoing domestic concerns about slower economic activity & political disruptions as a result of demonetization.

Overnight US market closed in negative after mixed US economic data yesterday amid holiday thinned trade. Although revised Q3 GDP & durable goods order came above expectations, jobless claims jumped and personal income & spending growth was also tepid, which may be an indication of adverse effect of a stronger currency (USD) in US economy.

EURUSD gained some strength after upbeat comments by ECB about EU inflation & growth as a result of recent depreciation of EUR. Also, some hawkish comments by German Fin Min Weidmann that ECB may be behind the curve in normalizing its monetary policy and should not afraid to hike or normalize has prompted some bids in EUR.

Thus, era of incremental easy money policy may be gradually over in the next few quarters, considering a hawkish Fed and even neutral ECB & BOJ. Although, there are significant geo-political and banking risks in EU, ECB may be forced to adapt neutral policy in the days ahead keeping in mind about hawkish Fed (divergent monetary policy). A strong USD is itself acting as “stimulus” for EUR and also for JPY (BOJ).

EM and also Indian market may be the biggest looser for this strong USD and neutral stance of ECB/BOJ in the days ahead.

Back to home, all eyes may be on the 2^nd day of GST meeting today for any further clue about its progress and implementation and also on the pace of remonetization & ongoing political battle.

Actionable trading idea hints:

Technically, NF has to sustain over 7940 area today; otherwise it may further fall towards 7915/7900*-7840 & 7790*-7700 for the day (under bear case scenario).

On the other side, sustaining above 7980 zone, NF may further rebound towards 8015/8035-8075* & 8105-8145/8170* area for the day (under bullish case scenario).

Similarly, BNF (LTP: 17946), has to sustain above 18000 area; otherwise it may further fall towards 17900-17800* & 17725-17650* zone for the day (under bear case scenario).

On the other side, sustaining above 18100 zone, BNF may further rebound towards 18250*-18375 & 18450-18600* area for the day (under bullish case scenario).

SGX-NF

 BNF