Market Wrap: 09/03/2017
(19:00)
Time & Price action suggests that,
Nifty Fut (March @8956) has to sustain over 9020-9035 area for further rally
towards 9075-9125 & 9195-9275 in the short term (under bullish case
scenario).
On the other side, sustaining below 8995
zone, NF may fall towards 8945-8900 & 8865-8795 area in the near term
(under bear case scenario).
Similarly, BNF (LTP: 20795) 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 area, BNF may fall towards 20750-20600 & 20490-20250 zone in the near
term (under bear case scenario).
Nifty
Fut (March) today closed around 8956 (+4 points), almost flat after gyrating
most of the days in a range with an opening minutes low of 8913 and a day high
of 8978 as market turned cautious ahead of exit polls later in the day and the
actual result on 11th March, Saturday, despite predictable wins for
BJP/NAMO in all of the states including UP, but except in Punjab. As election
is an election, full of uncertainty, market/investors may not believe the
exit/opinion poll results anymore; recent Indian examples were Bihar &
Delhi election; global example may be Brexit & Trumpism.
Indian
market today opened in negative tone following tepid Global/Asian cues, but
recovered almost instantly, may be due to some panic short covering after
yesterday’s fall. Overnight, US market fall amid slump in Crude Oil and
concerns of an impending rate hike by Fed next week after block buster ADP job
data.
Apart
from increasing concerns of supply glut due to more US shale oil productions,
lack of adequate & corresponding demand may also undermine the global
growth recovery. Also, there were some talks of cut in unproductive spending in
US by Trump administration to plug the burgeoning budget deficit to fund the
planned $1 tln infra package in PPP mode. As par some estimates, contrary to
earlier perception, US shale oil now break evens at around $30-40, thanks to
their superior tech and in that scenario, despite OPEC & Non-OPEC
production cut, it may be very tough for Oil to sustain above $55 in the near
term. Also, on deeper thinking, the present OPEC cut agreement may be more of
seasonal maintenance nature, which is bound to happen in this period of time,
even if there was no agreement. This agreement may also end officially by June’17
itself.
Technically,
Crude Oil (LTP: 49) need to sustain above 47; otherwise it may fall more and
consistent closing below 43, may also fall to 39-25 zone in the near to midterm.
On the other side, it need to sustain above 53-56 zone for any further rally
towards 63-68 area in 2017.
Back
to home, all attention of the market is now hovering on the politics rather
than the economics. As exit polls are coming now, it’s projecting a thumping
win for BJP/NAMO in all of the states including UP, but Punjab as expected.
As
par polls of various exit polls for UP, which matters most to the market (Total
seats: 403; Majority: 202 ;)
BJP/NDA:
179
SP/CONG:
136
BSP:
77
OTH:
11
Although
market may wait for actual result on Saturday and if BJP/NDA got anything less
than 200 seats, market may not celebrate at all and anything less than 180,
market may also take it as fractured mandate for NAMO. Depending upon the
actual result SP may also shape some post poll alliance with BSP to be in the
power. In that scenario, market may also disappoint, because of so much effort
from NAMO/BJP, there is “NAMO WAVE” this time unlike 2014 and it may dampen the
incremental reform initiative by the Govt in the months ahead. India’s
political risk may also accelerate due to various regional parties.
Overall,
from the market perspective, anything above 200 to 245 for BJP/NDA in UP,
market will rejoice NAMO and Nifty may also rally towards 9125-9195 zone,
keeping in mind the high probable Fed rate hike next week, depending upon
tomorrow’s NFP job data. On the other side, anything below 180-140 for NAMO in
UP, market may also slump towards 8795-8450, depending upon the actual Fed
action on 15th March.
SGX-NF
BNF
CRUDE OIL
CRUDE OIL
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