Nifty May Open In Positive Tone Following Similar Global Cues; All Eyes May Be On The Service PMI & EC Announcement Of State Poll Dates And Progress Of GST

Market Mantra: 04/01/2017 (08:30)

Watch 8150-8100 & 8265-8310 Zone In Nifty Fut (Jan), Which May Open Around 8200 Today

Strength of USD may be a concern; but overnight fall in oil may also help; Market may also watch political developments & consensus for GST as a result of demonetization ahead of series of state elections.

As par early SGX indication, Nifty Fut (Jan) may open around 8200, almost flat following positive global/Asian cues.

Overnight, US market, although closed around 0.60% higher; it came of the highs amid sudden fall in oil and retracements of USD/US bond yields.

Although, yesterday’s US economic data (ISM MFG PMI, Construction spending) was upbeat and came above market estimates, USD/US bond yields fall from the high, may be market is somehow skeptical about Friday’s NFP job data and wage growth. Thus, there may be some profit booking in long USD ahead of FOMC minutes today and also ISM Non-MFG PMI and NFP data in the coming days.

Although, Oil was initially higher yesterday as Kuwait & Oman confirmed about their part of production cut, Kurdish region (Iraq) and Libya are reportedly pumping (exporting) more oil and as market is always very skeptical about OPEC’s ability to implement & maintain any production accord, oil fall from the 14 months high. Also, forecast of unusual warm weather in US in the coming months may hamper its demand as one of the source of heating oil (like Natural Gas).

Technically, Crude oil, which is now trading around 52.65, has to sustain over 55 area consistently for any further rally towards 62-70; otherwise it may again fall towards 49-45 zone.

Oil above $60 may not be good for overall Indian economy & the market.

Back to home, after tepid MFG PMI data, market may watch keenly the service PMI data for Dec to gauze the actual extent of damage for the Indian economy after unprecedented & surprised decision of demonetization in Nov.

Hints for actionable trading ideas at index level:

Technically, NF has to sustain over 8180-8150* zone; otherwise it may fall towards 8100/8080*-8040 & 7980*-7940 area for the day (under bear case scenario).

On the other side, for any strength, NF need to stay over 8245-8265* zone for further rally towards 8310*-8365 & 8410*-8485 area for the day (under bullish case scenario).

Similarly, BNF (LTP: 18071) has to sustain over 18000 area; otherwise it may fall towards 17900-17850* & 17750-17600* zone for the day (under bear case scenario).

On the other side, for any strength, BNF need to sustain over 18200 area for any further up move towards 18400*-18600 & 18700*-18800 zone for the day (under bullish case scenario).

SGX-NF

BNF