Tuesday, 31 January 2017

Nifty May Come Under Stress Ahead Of Budget/Economic Survey & Hosts Of Monthly Data Tomorrow Amid Tepid Global Cues Following Trump’s Tantrum



Market Mantra: 31/01/2017 (08:30)

Watch 8665-8580 & 8685-8745 Zone In Nifty Fut (Jan), Which May Open Around 8610 Today

As par reports, budget may redefine LTCGT from one to two years, which may be negative for the Indian market sentiment, apart from Trump’s plan to restructure/ban H1B visa in US.

As par early SGX indication, Nifty Fut (Feb) may open around 8610 (-48 points) following tepid global cues amid ongoing chaos in US for the controversial immigration/travel ban from the seven specified Muslim countries. Just few hours ago, Trump sacked his AG for not obeying his “executive” decisions. Although, market may be well aware of Trump’s election rhetoric & promises, the manner, in which its being executed and the overall chaos of the US administration is making the investors extremely nervous. At this rate, US may be heading towards a constitutional crisis in the days ahead, if not handled properly.

Although, a falling USD/US bond yields may be good for EM, including India, a “risk off” sentiment may also affect the overall market.

Apart from US politics, Indian market may also keenly watch economic survey, revised GDP figure for FY-16 and Q3 result from ICICI Bank & Bajaj Auto. As par some reports, budget may redefine LTCGT application from one to two year; i.e. buying & selling within two years will be taxed as short term gain rate, which may also be negative for the market.

Market may be obsessed with cut in direct tax; but on deeper thinking, this may have very limited impact on the consumption side as very few people is actually paying any direct tax. Reduction in indirect tax including abnormally high tax component on the petro products & service tax may be more beneficial for the Indian consumer to save & spend. On an average, we are paying probably more than 30% indirect taxes and the proposed GST structure will be of little help to reduce such huge burden.

Hints for actionable trading ideas:

Technically, NF has to sustain over 8685-8705* area for further rally towards 8745*-8795 & 8855*-8895 zone for the day (under bullish case scenario).

On the other side, sustaining below 8665-8615* area, NF may further fall towards 8580*-8520 & 8480-8455/8405* zone for the day (under bear case scenario).

Similarly, BNF (LTP: 19642) has to sustain over 19925 area for any further rally towards 20000*-20350 zone for the day (under bullish case scenario).

On the other side, sustaining below 19850 zone, BNF may further fall towards 19600-19400* & 19200*-19000 area for the day (under bear case scenario).




SGX-NF



BNF

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