Nifty May Be Under Some Stress After Yesterday’s “No Shocker” Budget Day Rally As Market May Continue To Analyze More Fine Prints Of The Budget & Its Implications On Overall Growth & Earnings Recovery; Tepid Global Cues & Trump Tantrum May Also Drag; 8765-8800 May Be Big Hurdle For The NF In The Coming Days

Market Mantra: 02/02/2017 (08:30)

Watch 8745-8690 & 8765-8825 Zone In Nifty Fut (Jan), Which May Open Around 8710 Today

Budget proposal of SME tax cut by 5% for turnover less than 50 cr may be beneficial for almost 90% of the unlisted companies; but for listed big corporates, there is no corporate tax cut and that may also hurt the sentiment despite the budget is fiscally very prudent and have restrained YOY growth in overall expenditure/capex & revenue collection; fiscal deficit estimate of 3.2% of GDP may be at risk in FY-18 because of uncertainty about revenue trajectory amid disruption of demonetization & actual GST implementation.

As par early SGX indication, Nifty Fut (Feb) may open around 8710 (-26 points) following tepid global cues. Although yesterday’s US economic data (ADP/ISM Mfg PMI) was upbeat & better than expected, FOMC statement comes little on the dovish side and together with Trump’s jawboning effort to talk down the USD may be causing an overall weakness for the same. All eyes will be on the US NFP Job data report tomorrow and as of now, FFR is indicating only 2 rate hikes (June & Dec) this year. It also seems that Fed may be also concerned about Trump uncertainty and trajectory of US politics more than US economics.

Hints for actionable trading ideas:

Back to home, Indian market may look to the reality of some of the fine prints of the FY-18 budget and may also consolidate after yesterday’s super B-DAY rally.

Technically, NF has to sustain over 8765-8800* area for further rally towards 8855-8895* * 8935*-8995 zone for the day (under mild to extreme bullish case scenario).

On the other side, sustaining below 8745-8690* area, NF may further fall towards 8660/8605*-8545 & 8480-8415* zone for the day (under mild to extreme bear case scenario).

Similarly, BNF (LTP: 20106) has to sustain over 20200 area for further rally towards 20350*-20600 zone for the day (under bullish case scenario).

On the flip side, sustaining below 20150-20075* area , BNF may further fall towards 19850*-19700 & 19450*-19300 zone for the day (under bear case scenario).

 SGX-NF

 BNF