Nifty May Open & Stay Lower Following Negative Global Cues Amid Concerns Of “Hard Brexit”; But Some Fall In USD & Oil And Hopes Of Better Q3 Earnings & Budget Sops May Help

Market Mantra: 16/01/2017 (08:30)

Watch 8380-8350 & 8455-8485 Zone In Nifty Fut (Jan), Which May Open Around 8395 Today

Concerns of capital market & FPIS taxation issues (LTCGT & triple taxation-DDT), any adverse EC decision regarding budget day ahead of state polls and tepid progress of GST may drag the market.

As par early SGX indication, Nifty Fut (Jan) may open around 8395 (-25 points), slightly in negative following tepid global cues amid renewed concerns of “Hard Brexit” talks by UK PM tomorrow. UK is in great pressure from nearly all its stake holder to divulge a clear & specific plan for its “divorce” from the UK. Immigration & access to EZ common market may be the two biggest issues, which may pave the way for a “hard or soft” Brexit; but in any way as par May, “Brexit is a Brexit”.

On Friday, US economic data was mixed; although headline inflation came good, core inflation was still tepid. Overall, trade protection rhetoric by Trump is not being seen as too harsh & serious by the market, as it was largely intended for Mexico so far and not against China, Russia or Canada (NAFTA). But, on close scrutiny, even if, such trade barrier rhetoric may be good for USD, it will be eventually negative for US stock market.

For now, USD is being driven by US bond yields movement, ahead of Trump’s inaugural day on 20^th Jan.

Domestically, apart from Q3 result, progress of GST, budget talks all eyes may be on the political front also as EC may announce its decision on budget day and also on the SP/Akhilesh & Cong equation. Although, as of now, BJP may be ahead in UP election, lack of any credible name for the CM post may also hamper its prospect in the coming days as Akhilesh Yadav is being seen as a “young & dynamic” CM candidate despite intense family drama.

Hints for actionable trading ideas:

Technically, NF has to sustain over 8380-8350* area today; otherwise it may further fall towards 8290*-8250 & 8205*-8155 zone for the day (under bear case scenario).

On the other side, sustaining above 8455-8485* area, NF may further rally towards 8515-8545* & 8585*-8685 zone for the day (under bullish case scenario).

Similarly, BNF (LTP: 18970) has to sustain over 19150 area for any further rally towards 19250-19400* zone (under bullish case scenario).

On the other side, sustaining below 19100-19000 zone, BNF may further fall towards 18700*-18600/18500 area for the day (under bear case scenario).

SGX-NF

BNF