Nifty May Open & Stay Lower Amid Tepid Asian Cues And Renewed Domestic Concerns Of Taxation Issues On Capital Market & FII And Ongoing Economical & Political Disruptions Because Of Demonetization

Market Mantra: 26/12/2016 (08:30)

Watch 7940-7900 & 8075-8155 Zone In Nifty Fut (Dec), Which May Open Around 7960 Today

Despite FM’s clarification yesterday about PM’s comments in a weekend SEBI event that there is no active proposal for LTCGT for domestic EQ market, some apprehension may be there that definition of LTCGT may be revised above 3 years from the present 1 year (i.e. there is “no smoke without fire”).

Apart from a probable “surgical strike” on the capital market backed by “Benami Property Act”, FPI(s) double taxation issues may spook the domestic market in the coming days.

As par early SGX indication, Nifty Fut may open around 7960 (-40 points), following tepid Asian cues in a low volume market as almost all the major global EQ markets is shut today for Christmas holidays.

USDJPY fall to some extent despite upbeat US economic data on Friday as it was largely expected in line. As a result of strong Yen, Japanese market dropped also to some extent.

China market is also under pressure as a result of weaker Yuan & concern of capital outflow and some regulatory tightening by the PBOC.

Back to home, domestic market may be under renewed pressure on the back of some confusion regarding FPI(s) double taxation issues and some comments by NAMO in a weekend SEBI meet on Saturday regarding overall tax contribution by the Indian capital market participants in the “development” of the nation. 

The overall comments may be indicating some “harsh” taxation plans by the Govt in the forthcoming Budget and may also emphasize Govt’s stance of “war on black/unaccounted money & corruption” not only for the “physical cash/bank deposits”, but also for any angle in EQ/Comm market “money laundering” issues. 

For the last few weeks, NAMO is indicating repeated warnings about more action against “black money” after 31^st Dec’16 and demonetization may be only the start of this larger action plan. Govt may strike against property or any other financial assets acquired with unexplained source of money and may declare it as illegal and freeze it after implementation of ‘Benami Property Act” and DEMAT account may also be one of the target for suspected money laundering.

Technical hints for actionable trading ideas:

Technically, NF has to sustain over 7940-7915/7900* area; otherwise it may further fall towards 7840*-7790 & 7750-7705* zone for the day (under bearish case scenario).

On the other side, for any strength, NF has to sustain over 7985-8015* zone for further rebound (NAV rally) towards 8055/8075*-8130 & 8180-8225* area for the day.

Similarly, BNF (LTP: 17919) has to sustain above 17800 area; otherwise it may further fall towards 17650-17550* & 17450-17300* zone for the day (under bearish case scenario).

For any strength, BNF need to stay above 18000 area for further rebound towards 18150-18275* & 18400*-18550 zone for the day (under bullish case scenario).

SGX-NF

BNF