Tuesday, 18 April 2017

Nifty May Open Almost Flat Following Mixed Global Cues Amid Lingering US-NK Tensions & Upbeat Comments By US TSY Sec; All Eyes May Be Now On IMD Today For Its Monsoon Forecast & On TCS Report Card



Market Mantra: 18/04/2017 (08:30)



SGX-NF: 9155 (-11 points)



Key support for NF: 9115-9035



Key resistance for NF: 9200-9280



Key support for BNF: 21675-21500



Key resistance for BNF: 21775-21875



As par early SGX indication, Nifty Fut (Apr) may open around 9155, almost flat following mixed global cues. US market yesterday made some recovery (+0.90%) on the back of upbeat earnings expectations from financials & banks and defence related stocks. Also, some comments by US TSY Sec underplaying Trump’s recent rhetoric about strength of USD has helped the USDJPY to bounce back from the vital 108 level triggering some “risk on” trade late yesterday. Us TSY Sec (Mnuchin) made a comment in an FT interview that although strength of USD may be bad for US exports in the short term, it may be good for overall US economy in the long term and Trump’s effort to talk down the USD is different from any real action; it was just a view of Prez Trump. Mnuchin also emphasized for US tax reform (cut), but at the same time also acknowledged about hurdle of passage of the same in the US Cong/senate just like the fate of the health care bill.



It now seems that US politics (Trump & Co) is driving the USD rather than Fed and Trump is using the present geopolitical tensions over Syria/NK to devalue the USD, just by dropping some missiles/bombs!!



But despite upbeat comments by US TSY Sec, market is concerned that NK may be again trying for a nuke test shortly despite China’s effort to pacify both the sides (US & NK). US on the other hand is trying to install some missile defence system in SK, which China is vigorously opposing. Thus, the overall lingering geopolitical issues involving NK & US has dented the sentiment of the Asian market.



Among all these ongoing global jitters, Indian market so far was steady overall and trading in a defined range for the last few weeks. All eyes may be on TCS (Q4 result) and also on the other IT outsourcing cos as Trump may review & sign some bills later in the day today for further restrictions of H1B Visa.



Market may also look into IMD’s 1st official forecast (around 15:00 hrs today) about trajectory of monsoon this year. Any forecast of deficient rainfall because of looming threat for El-Nino may also spoil the bull party in the coming days.



PNB & BOB may be also in focus today after repots of small PSBS merger (like SBI) with them. Also, IIB & Yes Bank will be in focus for their result tomorrow. As par some reports, NIM of IIB may fall slightly to 3.80-3.60% this time, although it’s poised to report another “bumper” quarter.



Hints for actionable trading idea: Nifty & Bank Nifty Fut



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 9160/40-9115 & 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).




SGX-NF

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