Market Wrap: 17/04/2017
(19:00)
NSE-NF (April): 9166
(-16 points; -0.17%)
NSE-BNF (April): 21708
(-25 points; -0.12%)
IN 10Y G-SEC: 6.847
(+0.40%)
USDINR (Apr): 64.60
(+0.16%)
For 18/04/2017:
Key support for NF: 9115-9035
Key resistance for NF: 9200-9280
Key support for BNF: 21675-21500
Key resistance for BNF:
21775-21875
Time & Price action suggests that,
Nifty Fut (Apr) has to sustain over 9235 area for further rally towards 9280-9310
& 9375-9425 in the short term (under bullish case scenario).
On the other side, sustaining below 9215-9200
area, NF may fall towards 9160-9115 & 9085-9035 area in the short term
(under bear case scenario).
Similarly, BNF has to sustain over
21825 area for further rally towards 21875-21975 & 22050-22150 area in the
near term (under bullish case scenario).
On the other side, sustaining below
21775 area, BNF may fall towards 21600-21500 & 21340-21200 area in the near
term (under bear case scenario).
Nifty
Fut (Apr) today closed around 9166, slightly down after making an opening
session high of 9182 and day low of 9142 in a lacklustre day of trading as
majority of the EU markets were closed due to Easter Monday. Indian market
today opened almost flat following tepid Global/Asian cues after US bombed a
suspected ISIS hideout with a MOAB on Friday in an apparent signal to NK on
last Friday. In the weekend, there was worry about possible HK nuke test and retaliation
of US; but NK tried for a missile test yesterday, which failed instantly.
Although China is trying to pacify both US & NK, there are still serious
concerns and among all these lingering geopolitical tensions, USD is being sold
across the board and risk trade is off.
On
Friday, US economic data (core CPI & retail sales) also flashed downbeat,
which raised some concerns for Fed’s plan for a June hike. Overall, although US
consumer confidence is at record high with moderate increase in wages but
consumer spending (retail sales) are on the decline for the last two months,
which may also affect the US GDP by some extent and thus Fed may be on the side
line for the next few months also (June & Sep).
Also,
as par some reports, there may be some change in Trump’s core economic team in
the coming days in which the aggressive pro-infra spending person (Bannon) may
be replaced with more conservative aide (Cohn). Thus, reflation trade may be
now in question as Trump may not go for an aggressive tax cuts & infra
spending spree for fiscal deficit concerns. All these are making the USD &
US Bond Yields lower.
In
the morning today, Chinese Q1 GDP (YOY) data flashed slightly higher than
estimate at 6.9% (estimate/prior: 6.8%); but retail sales & industrial
production came way above expectations at 10.9% & 7.6% for March. Overall
Chinese data was supported by a buoyant real estate market & consumer spending
helped by credit growth in Q1. But, despite that, China market was down today
for geopolitical concern with NK and also for the perception that an upbeat
economic data may help PBOC for more tightening in the coming days.
Among
all these ongoing global jitters, Indian market also turned cautious ahead of
TCS earning tomorrow and host of others (IIB/Yes Bank) in the next few days
after Infy’s poor report card & guidance last week. Also, RBI’s new norms
for NPA risks, weak credit growth (below 5%) may have affected the sentiment
today. IMD may also announce officially their first monsoon forecast later this
week and market may be also concerned that it may be a deficient rain forecast this
year after last year’s near normal rain fall (El-Nino effect in line with
Skymet forecasts).
Indian
WPI (March) today flashed as 5.70% against estimate of 5.98% (prior: 6.55%).
Although, headline WPI declined in March after last few month’s upper
trajectory, WPI or even CPI headline data may be of little relevance for RBI
now as Patel/MPC may wait for actual monsoon, implementation of GST, 7-CPC
spillover effects on inflation & actual Fed stance in the coming months
before any rate action. There is no requirement of a rate cut in FY-18 as
nearly all the economic data/GDP & projections are quite upbeat. Going
forward, previous full rate cut transmissions to the base rate (not MCLR) is
more important for the credit flow/growth of the Indian economy. Today’s MFG
WPI came as 2.99% against prior 3.66%, which may also indicate some lack of
pricing power for the manufacturers.
Today
midcaps outperformed the broader market helped by the real estate sectors after
IBREALEST surged by over 40% amid news of restructuring into separate commercial
real estate. This move may unlock value and may also attract REIT funding. As a
result of such deleveraging, all the other real estate scrips such as DLF also
surged. Going by the price action, the move may be exaggerated because such separation
of units may also limit the earning potential for the original entity.
Most
of the leading Pharma scrips were also under pressure today because of renewed
US FDA concerns. For TCS, Q4FY17 expectations are muted tomorrow (PAT: -2%; USD
revenue: +2% on QOQ basis).
Technically, TCS (LTP: 2315), has to
sustain over 2365-2400 zone for any rally towards 2465-2525 area; otherwise it
may fall and sustaining below 2315 area may further fall towards 2275-2255
& 2150-2105 zone in the short to mid-term.
SGX-NF
BNF
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