Market Wrap: 17/03/2017
(18:00)
NSE-NF: 9168 (-8
points; -0.09%)
NSE-BNF: 21238 (-73
points; -0.34%)
Time & Price action suggests that,
Nifty Fut (March) has to sustain over 9235 area for further rally towards 9275-9350
& 9425-9550 and 9605-9685 by next week/ in the short term (under bullish
case scenario).
On the other side, sustaining below 9215-9195
zone, NF may fall towards 9145-9075 & 9035-8995 and 8955-8865 area by next
week/ in the short term (under bear case scenario).
Similarly, BNF has to sustain over
21400 area for further rally towards 21500-21675 & 21855-21950 and
22050-22150 area by next week/ in the near term (under bullish case scenario).
On the other side, sustaining below
21350 area, BNF may fall towards 21140-21000 & 20900-2070 and 20450-20300
zone by next week/ in the near term (under bear case scenario).
Nifty
Fut (March) today closed around 9168, almost flat after hitting a new life time
high of 9213 in the opening minutes (gap up) and subsequent day low of 9165; it’s
a new record closing high for the index today primarily supported by ITC
(+4.77%) after Govt kept neutral rate of GST for the cigarette products.
Analysts are quite optimistic that it will eventually help for more consumption
of cigarettes as low earners (“poor people”) may shift to cigarettes from “Beddi”,
where GST rate has been not decided as of now. But, considering the huge cottage
industry of “Beddi” and significant employment attached with it, Govt may not
apply any “sin tax” on that tobacco product.
Yesterday’s
approval of various GST bills are on the expected direction, but some GST “sin
tax” was applied as 15% on some “sin goods” like aerated beverages (cold
drinks) and some models of expensive cars, which was less than market
expectation and together with that, a real probability of a July’17 launch of
GST has boosted the sentiment of Indian market today and Nifty opened at a
record high of above 9200. Apart from ITC, market was also supported by IT
counters today as USD rebounded after last few days fall.
But,
domestic market sentiment was turned slight depressed today after some market
buzz that overall figure of Q4FY17 advance tax may not be encouraging as its up
only by 6% (??); we may hear some DeMo blues again, if this unconfirmed report
is turned true.
Globally,
after Fed hike market rallied as Yellen sounded less than hawkish in her stance
for future path of rate hikes in 2017. Although, another 2-3 hikes to bring the
Fed rate from present 1% to 1.5-1.75% by next 12 months (March’18) may be
normal for US economy & Fed, it may not be good for EM & also for the
Indian market. Post Fed hike, which was also highly expected, the USD fall as
if Fed has not hiked rate, but cut the same; it was just a counter reaction
from a overcrowded long USD trade (fade the trade or buy the rumour & sale
the fact). USD is bound to rally again, simply because of divergent monetary
policy action between Fed & other major G-20 central bankers (BOJ/ECB).
If
Fed goes on its scheduled 2-3 hikes in next 12 months, then other central banks,
including RBI is bound to react to keep the interest rate & bond yield
differential at present optimum level. EM central bankers may have also to
respond fast to prevent outflow. Yesterday, after Fed hike, PBOC responded by
some hike in its reverse repo/OMO/MLF/SLF facilities and some members of BOE
& ECB were also sounded somewhat hawkish. ECB may hike its deposit rate and
also the main refinance rate before Dec’17 end of QE. BOJ may also not
introduce any fresh QQE, but will maintain the present accommodative/neutral
stance to keep its YCC at around 0%, till CPI goes around 2% (??).
All
eyes may be now on G-20 meeting official draft, where US is expected to put
some pressure on its EU partners, Japan, China to desist from “currency manipulation”
, whereas all the other nations are expected to question Trump’s “America Only”
trade policy and border tax. Also, tax co-operation between different countries
may be on the high priority agenda. Also, meeting between Trump & Merkel in the weekend may be interesting to watch.
Development of Brexit may be also watched as UK will go for official A-50 invocation by this month. On the other side, EU imay not be agree to start official negotiations till June'17 and till UK pays its "seperation fees" (??).
For the Indian market, after the highest ever closing in this "historic" week, market may try to find some fresh drivers; otherwise some time & price correction may come as alsmost all the "good news" may have been discounted/digested by the market for the near term.
Watch 9275-9035/8995 zone in NF closely for any breakup or breakdown for next week.
SGX-NF
BNF
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