Nifty May Open Higher After “Not So Hawkish” FOMC Minutes; All Eyes May Be On The EC For Any Decision Of Postponement Of Budget Day After State Elections

Market Mantra: 05/01/2017 (08:30)

Watch 8195-8150 & 8265-8310 Zone In Nifty Fut (Jan), Which May Open Around 8240 Today

Some fall in USD may help Indian market today; but tepid PMI data and uncertainty about GST & Budget day may also drag.

As par early SGX indication, Nifty Fut (Jan) may open around 8240 (+32 points) after FOMC minutes reveals “less hawkish” tone of the Fed regarding rate hikes in 2017. 

Basically, Fed will be data & Trump dependent and may “gradually” hike in 2017-18. Thus going forward, US incoming economic data and actual plan & implementation of Trump’s fiscal & trade policies may matter most for Fed and depending upon that Fed may either hike twice or thrice in 2017. 

So, in that sense, Fed will be “owlish” rather than “dovish” or extremely “hawkish”. Market may be still assuming that Fed will hike twice in 2017 regardless of “Trumpism”, if Fed’s own mandate of maximum employment and reasonable inflation/growth is visible in the forthcoming data.

Thus, today’s ISM Non-Mfg PMI & tomorrow’s NFP job data, specially wage growth may be vital for USD before Trump actually take charge of the White House on 20^th Jan.

Back to home, Govt may also shortly announce officially that GST implementation is “practically” not possible from April’17, given the present lack of political consensus and various other administrative hurdles (time is running out).

Politics may take centre stage in lieu of economics for the domestic market in the days ahead amid series of state elections, which may also be seen as a referendum for “Modinomics” & demonetization.

As, budget presentation day (1^st Feb) falls just before election start day of 4^th Feb, EC/Govt may be obliged to postpone it to a later day after election process (11^th March) and in that scenario, FY-18 budget may be presented around 31^st March.

Hints for actionable trading ideas at index level:

Technically, NF has to stay above 8265 area for further rally towards 8310/8335*-8365/8410 zone for the day (under bullish case scenario).

On the other side, sustaining below 8245 zone, NF may fall towards 8195-8150* & 8100*-8040 area for the day (under bear case scenario).

Similarly, BNF (LTP: 17952) has to sustain over 18250 zone for further rebound towards 18400*-18600 & 18675*-18800 area for the day (under bullish case scenario).

On the other side, sustaining below 18200 area, BNF may further fall towards 18000-17900* & 17800-17600* zone for the day (under bear case scenario).

SGX-NF

 BNF