Nifty May Open Flat Following Mixed Global Cues After Trump Again Talked About US Tax Cut; Combination Of Hawkish Fed & Trumponomics May Not Be Good For EM & India; But A Defensive Tone From Yellen Yesterday May Also Help Domestic Market Today

Market Mantra: 16/02/2017 (08:30)

Watch 8800-8715 & 8875-8925 Zone In Nifty Fut (Jan), Which May Open Around 8760 Today

As par early SGX indication, Nifty Fut (Feb) may open around 8760 (+10 points), almost flat following another record high US closing; but tepid Asian session. Overnight US economic data (CPI, retail sales etc) was upbeat & above market expectations and coupled with that Trump’s comment in a retail CEO(s) meeting that he is going to unveil a major US tax reform has helped the US stock market sentiment; also overall Q4FY17 earnings in US is quite upbeat this time. 

But, despite these green shoots, Yellen in her 2^nd day testimony with the US senate looked somewhat defensive yesterday after unusual hawkish scrips on the 1^st day. Some comments from Yellen such as “overall US economic performance has been quite disappointing” and coupled with no growth in monthly wages and unexpected decline in US IIP has made the USD to lose some strength. Japan is trading lower as Yen has gained some strength today.

Back to home, some drops in USD may also help the Indian market today after yesterday’s fall and we may see some short covering. But overall higher trajectory of core inflation, tepid IIP & trade balance data coupled with some disappointing result & uncertainty about PSBS recapitalization may also cap any gain. The market may be range bound in the absence of any major triggers so far; all eyes may be on the progress of GST in the forthcoming meeting on 18^th Feb and ongoing state polls.

Hints for actionable trading ideas:

Technically, NF has to sustain over 8800 zone for further rally towards 8855/8875*-8925 & 8995-9035 area for the day (under bullish case scenario).

On the other side, sustaining below 8775 area, NF may fall towards 8745/8715*- 8690 /8665 & 8605*-8585/8551 zone for the day (under bear case scenario).

Similarly, BNF (LTP: 20216) has to sustain over 20450 zone for further rally towards 20550-20650* & 20750- 20950* area for the day (under bullish case scenario).

On the flip side, sustaining below 20400 area, BNF may fall towards 20300-20150* & 19950*-19750 zone for the day (under bear case scenario).

SGX-NF