Market Mantra: 21/04/2017
(08:30)
SGX-NF: 9180 (+17
points)
For the Day:
Key support for NF:
9160-9115/9085
Key resistance for NF:
9200-9255
Key support for BNF:
21450-21250
Key resistance for
BNF: 21675-21775
As
par early SGX indication, Nifty Fut (Apr) may open around 9180, slightly in
green following mixed global cues. Overnight US market rallied by around 0.85%
amid better than expected result from American Express and hopes for an
imminent tax cut bill by Trump. Although, yesterday’s US economic data was
tepid, a comment by US TSY Sec about probability of introduction of the much
awaited tax cut bill by Trump has ignited the “risk on” (reflation) trade
sentiment there. As par reports, despite failure of health care bill, Trump may
go ahead with the tax reform bill and will try to persuade any dissidents for
the same by process of due consultations & also some compromises.
But,
despite upbeat US market, morning Asian market sentiment was tepid because of a
terrorist attack in Paris overnight and risks of French election on Sunday.
Although, the market favourite centrist candidate (Macron) is way ahead of the
ultra right & anti EU candidate (Li Pen), such terrorist attack may also
change that perception/opinion poll in this 1st round of French
election.
Back
to home, yesterday’s RBI/MPC minutes may be described as hawkish on inflation
and upbeat on growth; thus in such scenario, further rate cut hopes in FY-18 or
foreseeable future may be equivalent to almost Nil. RBI may focus more on NPA
resolution along with ongoing AQR (reorganization) and previous rate cut
transmissions by the banks. As par RBI, there is still room for rate cuts by
the banks and also interest rate on small savings instruments need to fall in
line with G-SEC 10Y yields. Also, as par RBI, there may not be any concrete new
NPA policy immediately and it may take some more time, especially on the NPA
hair cut policy, where the regulator may need to consult the Govt & the
stakeholders for a more effective & viable mechanism.
After
mixed result from IIB & Yes Bank, market may also focus on the report card
of HDFC Bank & ACC for further cues of Q4FY17 earnings, which is so far
termed as mixed/tepid wrt very high market expectations & subsequent
stretched valuations.
Time & Price
action suggests that, Nifty Fut (Apr) has to sustain over 9240 area for further
rally towards 9275-9310 & 9375-9425 for the day/in the short term (under
bullish case scenario).
On the other side,
sustaining below 9220-9200 area, NF may fall towards 9160-9115 & 9085/60-9025
area for the day/in the short term (under bear case scenario).
Similarly, BNF has to
sustain over 21775 area for further rally towards 21875-21975 & 22050-22150
area in the near term (under bullish case scenario).
On the flip side,
sustaining below 21725-675 area, BNF may fall towards 21550-21450 &
21300-21150 area in the near term (under bear case scenario).
SGX-NF
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