Nifty May Open Gap Up Following Positive Cues As US Stock Futs Continue To Trade At Record High Levels Amid Better Prospect Of “Trumponomics”; Domestically All Eyes May Be On The Earnings, Inflation & State/UP Polls After Tepid IIP Data & Hawkish RBI

Market Mantra: 10/02/2017 (08:30)

Watch 8855-8755 & 8875-8925 Zone In Nifty Fut (Jan), Which May Open Around 8850 Today

For SPX-500, watch 2325-2350 zone may be a big hurdle for further “Trump rally”.

For SBI, 290-295 & 300-305 may be a big supply zone and 268-260 & 248-238 may be a good demand zone for the time being. Despite demonetization led surge in NPA repayments for some of the other banks, SBI was able to recover only around Rs.1003 cr out of gross NPA of Rs.1.08 lakh cr and this may be an indication that, whatever be the recognition process of the stressed assets, actual resolution may be still tepid and may also be under pressure in Q4 & subsequent quarters amid demonetization uncertainty.

As par early SGX indication, Nifty Fut (Feb) may open around 8850 (+41 points) following positive global cues despite some tension in the weekend over North Korea missile test and tepid GDP data for Japan flashed today. US & global market is quite upbeat following Trump’s commitment to unveil a major tax reform plan in US which has ignited the “Trumpflation” trade again. USD/US bond yields are getting strength across the board. Crude oil is also upbeat after OPEC’s confirmation about production cut deals happening (90%) on the ground despite increasing US shale oil supplies. But Russia may be out of this agreement by June-July’17 and that may spoil the party later on.

Back to home, after digesting FY-18 budget & surprised hawkish hold by RBI, all eyes will be on the ongoing state polls, Q3 results and also on the CPI & WPI data today and tomorrow. Theoretically, although a Neutral RBI may move on either side (cut or hike), considering the limited scope of further transmissions by the banks, RBI may be on hold till late FY-18 or beyond, if we have no nasty uptrend in CPI or core inflation.

Hints for actionable trading ideas:

Technically, NF has to sustain over 8875 zone for further rally towards 8925*-8995 & 9035-9075 area for the day (under bullish case scenario).

On the other side, sustaining below 8855 area, NF may fall towards 8785/8755*-8715 & 8675*-8595 zone for the day (under bear case scenario).

Similarly, BNF (LTP: 20225) has to sustain over 20550 zone for further rally towards 20650*-20800 & 20950*-21350 area for the day (under bullish case scenario).

On the flip side, sustaining below 20500 area, BNF may fall towards 20300-20200* & 20000*-19750 zone for the day (under bear case scenario).

SGX-NF