Nifty May Open & Stay Lower Amid Ongoing Domestic Concerns Out Of Demonetization Fall Out & Delay Of GST And Strong USD & Oil

Market Mantra: 19/12/2016 (08:30)

Watch 8090-8040 & 8160-8210 Zone In Nifty Fut (Dec), Which May Open Around 8120 Today

Domestically, all eyes will be on the pace of remonetization, any announcement of “stimulus” by the Govt to reduce the “demonetization pain” of “Aam Admi”, which may be so far deprived of any “gain”.

As par early SGX indication, Nifty Fut (Dec) may open around 8120 (-25 points) amid flat global cues. Although, there may be some relief in late Friday’s geo-political tension, as China is returning a “seized” US underwater drone hovering in the disputed South China sea and Yuan got some strength against USD for upbeat housing price data in China released in the morning today, overall Christmas/Year end holiday mood in the street may kept the market in a range.

Back to home, as winter session of the Parliament got washed out without any meaningful work, specially GST is in the deadlock over demonetization led political disruptions and lack of political & administrative consensus on the dual control issue, all eyes will be now on the budget or any special session of the Parliament for passage of the final GST bill, if any consensus will arrive in the days ahead. 

But, such probability is very thin and Govt may be also virtually admitting that April’17 GST roll out may not be possible at all and it may be implemented “any time” between April-Sep’17 for “constitutional compulsion”. But, in reality, “political compulsion” may drag this vital reform (GST) further towards 2018 and eventually, it may be only implemented after 2019 general election as Indian economy may not take two successive disruptions out of demonetization and GST at a time.

Apart from the Q4FY17 earnings, all eyes may also be on the Govt for any possible announcement of some “fiscal stimulus” in the New Year (Santa Gift) for the “common people” of the nation in order to reduce some “demonetization pains” ahead of UP election, which may likely to be held around March’17. 

Govt may also hint some further reforms in the forthcoming “dream budget” and to promote retail investments in an era of decreasing savings interest, may also scrap the short term capital gain tax in the budget apart from various other expected reforms in direct as well as indirect taxes. But adherence to fiscal math may be also a challenge in FY-18. 

Globally, all eyes may on the USD & US bond yields and bail out effort for the Monte Paschi bank in Italy.

Technically, NF has to stay above 8090 area today; otherwise it may further fall towards 8040*-7980 & 7915* zone for the day (under mild to extreme bear case scenario).

For any strength, NF need to sustain above 8160 area for further rebound towards 8210/8240*-8305 & 8340* zone for the day (under mild to extreme bull case scenario).

Similarly, BNF (LTP: 18337) need to stay above 18285 zone; otherwise it may further fall towards 18200-18150* & 18050-17950* area for the day (under bear case scenario).

For any strength, BNF need to sustain above 18500 area for further bounce back towards 18600-18750* & 18875*-18950 zone for the day (under bull case scenario).

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