Nifty May Open Slightly Higher Tracking Positive Global Cues As Trump Promised For a “Phenomenal” Infra Spending Plan In His 1st Congressional Speech Today; Domestically Concern For Tepid GDP In Q3 & A Strong USD Ahead Of Trump May Also Drag The Market

Market Mantra: 28/02/2017 (08:30)

Watch 8975-8875 & 8995-9075 Zone In Nifty Fut (March), Which May Open Around 8930 Today

As par early SGX indication, Nifty Fut (March) may open around 8930 (+11 points), almost flat following positive Global/Asian cues as USD/US bond yields are getting some bids ahead of “key” congressional speech from Trump today. Overall US economic data was mixed yesterday and Trump also confirmed that it will be very difficult for him/his administration to divulge details of any tax reform plan unless they have an replacement of the “Obamacare” (US healthcare social security policy). Subsequently USD was dipped to some extent; but later in the day, Trump again popped up to say that he will spend $54 bln for US defence & security under Pentagon to eliminate ISIS from the earth; but at the same time he also indicated that he will cut the same $54 bln budget from other “unproductive” areas of the USA like external grant, too much funding for environmental issues, excessive NATO funding etc.

So, in effect, the net budget gap will be the same, but due to incremental defence spending, there may be some real stimulus for the US economy. Thus, USD/US bond yields are getting some strength after last few days fall and market is also looking for Trump’s “Phenomenal speech” to the US congress (joint session) later in the day with great hope of more specifics. Any disappointment may also trigger some volatility in the global market.

Japan is trading higher because Yen lost some strength and thus Asian cues are positive.

Back to home, a stronger USD may not be good for the domestic market today. Also, all eyes will be on the Q3FY17 GDP data after the market hours today. Although median estimate is 6.4% against Q2 figure of 7.3%; as par some previous estimates, due to adverse effect of demonetization in Q3, GDP may decrease by around 0.50% per month, which translates a Q3 figure of around 5.8-6.00%. Today’s GDP figure, being preliminary and incomplete, we may have the final true figure (revised) in May after CSO gets more incoming data out of corporate performance and informal economy.

Hints for actionable trading idea:

Looking at the chart, Nifty Fut (March @8940) has to sustain over 8995 area for 9015/9035 & 9075-9125 area for the day (under bullish case scenario).

On the other side, sustaining below 8975 zone, NF may fall towards 8890/8875-8840 & 8800-8715 for the day (under bear case scenario).

Similarly, BNF (LTP: 20678) has to sustain over 20950 area for further rally towards 21050-21150 & 21350-21500 area in the near term (under bullish case scenario).

On the other side, sustaining below 20900-20750 area, BNF may fall towards 20600-20500 & 20250-20000 zone in the near term (under bear case scenario).

SGX-NF