Market Wrap: 27/03/2017
(19:00)
NSE-NF: 9067 (-51 points;
-0.56%)
NSE-BNF: 21094 (-47
points; -0.22%)
For 28/03/2017:
Key support for NF: 9015-8960
Key resistance for NF: 9100-9175
Key support for BNF: 21000-20900
Vital resistance for
BNF: 21250-21350
Time & Price action suggests that,
Nifty Fut (March) has to sustain over 9140 area for further rally towards
9175/9195-9215 & 9235-9275 for tomorrow/ in the short term (under bullish
case scenario).
On the other side, sustaining below 9120-9100
area, NF may fall towards 9060-9015 & 8980/8960-8895/8865 area by for
tomorrow/ in the short term (under bear case scenario).
Similarly, BNF has to sustain over 21350
area for further rally towards 21500-21675 area by tomorrow/ in the near term
(under bullish case scenario).
On the other side, sustaining below
21300-21250 area, BNF may fall towards 21000-20900 & 20700-20600 zone by
tomorrow/ in the near term (under bear case scenario).
Nifty
Fut (March) today closed around 9067 and sheds 51 points after making an
opening minutes high of 9111 and day low of 9035. Indian market today opened in
a depressed note following tepid global cues after an unexpected failure by
Trump to repel the Obamacare bill on Friday amid firm oppositions by some of
his own RNC members (known as Freedom Caucus). Although, Trump has majority in
both houses of the US senate, the fact that his so called affordable healthcare
plan is being vigorously opposed by some of his own members, has raised serious
doubts over his plan of Trumponomics in the days ahead. It’s the Trump’s
rhetoric of tax cuts & incremental infra/fiscal spending, which was mainly responsible
for the huge rally in risk assets post Trumpism contrary to earlier perception
of a prolonged “dooms day”; now Trump’s own credibility for passage of such
plans may be in at stake and we have a global “risk off” environment as
perception of Trump trade (reflation trade) is fading.
Considering
that some of Trump’s own RNC members are dead against border tax & other
types of trade barriers, it may be very tough for Trump to pass his US Tax
reform plan. Also, there are some market buzz that amid such political war of
Obamacare/Trumpcare, US house speaker Ryan may resign, who is also a key
architect of Trump’s team, responsible for the Trumpcare & new tax reforms,
although in the election days, Ryan has opposed Trump for various
controversies.
Still,
some of the analysts do also feel that, Trump may not face such vigorous
oppositions from his own RNC members at the time of tax reform bill passage,
because the two issues are quite different. Anyway, whatever be the narratives, USDJPY (LTP: 110.20) has to sustain
over now 111-112 zone for any rebound; otherwise there is not so much support
until 108.80-108.30 and sustain below that expect more bloodbath towards
107-105 & even 99 levels in the coming days.
Looking
ahead, apart from US political risks, global market may also focus on host of
Fed speakers in this week, especially for Yellen tomorrow. Also, invocation of
Article-50 will be on focus on 29th March by UK and as par current
trends, it may be tough for UK to have a “Soft Brexit”.
Among
all these ongoing global jitters, Indian private metrological organization
(Skymet) today predicted a 5% below normal monsoon this year amid concern of an
El-Nino. Although, concern of El-Nino was already known by the market, it was
not supposed to disturb the main monsoon season (June-Sep’17) this time and
thus the sentiment of the domestic market was affected by some extent today.
Looking ahead, all eyes may be on the IMD’s official monsoon projection this
year, which is expected to be almost normal. But, if IMD also agrees with
Skymet, then one can expect some knee jerk reaction by the market as India
growth story may face some hurdles in that scenario after DeMo led economic
disruptions, especially for the rural cash economy.
As
expected, today Govt presented the final GST bill (?) to the Parliament as a money
bill. The bill will be debated on 29th March and will be subsequently
passed by the LS as it will not go through the RS, being a “money bill”. Although
the Govt is trying its best to implement the GST from 1st July’17,
it seems that various stakeholders including industry & traders are not so
much confident about its timely implementation with so many regulations,
multiple rates of taxes and time & IT network preparation constraint. Even If
GST is implemented in a hurry from July’17 after finalization of all the rules &
regulation by May’17, it may do more disruption to the economy than any
meaningful contribution, at least for the short to midterm.
The
present design of GST may be far cry from the original theme of “one tax one
nation” and being “revenue neutral” it may not serve any big difference over
the present system of VAT & CENVAT (ED). Both the Central & State Govts
are not ready for any sacrifice of the net tax revenue and at the same time
looking for less burden of taxes on the people (consumers) and also on the
producers/service providers by way of input tax credit.; combination of these
two may be quite difficult in the present system of GST.
Domestic
market was supported today by PSBS (SBI/BOB) and some private banks (Indusind
& HDFC). Apart from hopes of NPA reform by the Govt (bad bank/super ARC in
PPP mode for top 40-50 stressed accounts), SBI was in the news for its
insurance arm stake sale by way of an IPO. There were also some renewed talks
of Indusind Bank & Bharat Fin merger.
Indian
market was under pressure today from RIL (SEBI fine), Idea (renewed concern
about telecom business stress), metals space (Tata Steel/Hindalco) for China
& reflation trade concern and IT (weak USD and H1B visa issues).
BNF
USDJPY
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