Market Mantra: 09/01/2017 (08:30)
Watch 8295-8240
& 8335-8375 Zone In Nifty Fut (Jan), Which May Open Around 8265 Today
Apart from
start of earning season from tomorrow, all eyes may be on the Govt/Opposition
& EC Stance For Budget Day; Reports That LIC May Trim Its Equity Investment
Target By Rs.10000 cr In FY-17 Due To Adverse Market Conditions May Also Affect
the Sentiment.
As par early SGX indication, Nifty Fut (Jan) may
open around 8265 (-3 points), almost flat despite positive global cues
supported by Friday’s upbeat US NFP job data.
Although, headline NFP numbers were not good and
below estimates, the hourly wage grew by 0.4% against estimate of 0.3%
(prior:-0.1%); on YOY basis, wage grew by almost 2.9%, which may be a record
after June’2009. This, along with greater participation rate and significant
upward revision of Nov’16 pay roll numbers may be an indication that US economy
is gradually moving towards Fed’s goal of full employment and reasonable
inflation/wage inflation. Thus, Fed may have no alternative, but to go ahead of
its dot plots projection of 2/3 hikes in 2017, depending upon the actual shape
& implementation of “Trumponomics” and as a result, USD/US bond yields has
again resumed its upward journey after brief pause last week.
Crude oil, which is trading around $54 is also
getting stronger as market is more & more OPEC & Non-OPEC producers are
confirming their part of production cut, despite some usual squabbling and
probability of higher US shale production on the back of better price.
A combination of stronger USD & Oil may not be
good for overall Indian economy and the market.
Domestically, all eyes may be on the duet of Govt,
Oppositions & the EC for any change in budget day ahead of state elections.
A “dream budget” probability this year may be one of the tailwinds of the
Indian market for the near term and any postponement in this regard, may also
dampen the market sentiment.
For UP election, although BJP is now in clear
advantage thanks to the family feud & excellent election strategy by Amit
Shah & Co, it may be too early till now and there are various other factors
for a state like UP (caste & religion based vote bank politics), appeal of
a “young & dynamic” CM candidate like Akhilesh Yadav (BJP has no CM face)
and last of all, demonetization related real pains & unemployment issues
among the “Aam Admi”, especially in the lower end of the pyramid. Thus, it may
not be a smooth affair for BJP also this time despite attempt of creation for a
“NAMO Wave” by demonetization & “war on black money/corruption” (unlike in
2014). All may be dependent, how SP/Akhilesh camp quickly recovers from the “family
feud” shock and get its act together for an election fight; otherwise it may be
a clean BJP sweep eventually (positive for the market).
Apart from, demonetization related concerns;
earnings may be significantly affected in Q3 & Q4FY16 for shifting towards
Ind-AS accounting standards (especially for banks as provision related norms
may be severely affected).
Hints for
actionable trading ideas at index level:
Technically,
NF has to sustain over 8295 zone today for any strength; otherwise it may fall
towards 8240*-8200 & 8140/8120*-8040 area for the day (under bear case
scenario).
On the
other side, NF has to sustain over 8335 area for further rally towards 8375-8425*
& 8485*-8545 zone for the day (under bullish case scenario).
Similarly,
BNF (LTP: 18317) has to sustain over 18400 zone for any further strength;
otherwise it may fall towards 18250-18100* & 18000*-17800/17600 area for
the day (under bear case scenario).
On the
other side, BNF has to sustain over 18550 area for further rally towards
18650*-18800 & 19075*-19150 zone for the day (under bullish case scenario).
SGX-NF
BNF
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