Wednesday, 12 April 2017

Nifty May Open Lower Amid Tepid Global Cues After Renewed Geopolitical Tensions & Strength Of Yen/Safe Heaven Assets; All Eyes May Be On Domestic Macro & Infy Result Tomorrow



Market Mantra: 12/04/2017 (08:30)

SGX-NF: 9140 (-27 points)

Key support for NF: 9215-9175

Key resistance for NF: 9275-9315

Key support for BNF: 21775-21650

Key resistance for BNF: 21875-21975

As par early SGX indication, Nifty Fut (Apr) may open around 9140, slightly in red following tepid global cues after renewed geopolitical concerns regarding US, NK, Syria, Russia and even China & Japan. US Prez Trump is basically pressurizing China & Russia to take action against NK & Syria to bring them on line; otherwise US may take of its own action. Market may be also concerned that in the event of any real attack on NK by US, the former may also use some of its Nuke capable missile to Japan as the same is within their range. 

Thus, there is flow of smart money towards safety of Yen, Gold, USTSY bonds and USD/EQ is being doomed. But, yesterday US EQ market almost recovered from the day low after renewed hope about the health care bill, now Trump is apparently being able to unite all the warring RNC & DNC members on the back of his “surgical strike on Syria”, warning against Russia & indication of any suitable action against NK; Trump is now in better political position in comparison to few weeks ago.

Oil was strong amid chatters of OPEC led production cut extension for another 6 months after June’17 and surprised  US inventory drawdown report yesterday and geopolitical tensions in Syria.

In the morning, Chinese CPI data came slightly below expectations; but more or less on the line; China also trading slightly higher after recent slump amid PBOC tightening and glut of iron ore.

Back to home, after yesterday’s Govt proposal to set up a NPA panel & commitments no let up in recapitalization for the PSBS as par real requirement even after Indradhanush, market may keenly watch the Q4FY17 earnings season, which will officially start with Infy tomorrow. Yesterday, Rel Defence Q4 result although was a loss at a glance, it may be better than expected at EBITDA level because there was an exceptional item of “tax write back”.

All eyes may be on the CPI for March today (estimate 3.98%; prior: 3.65%) and IIP for Feb (estimate 1.3%; prior: 2.7%).

Hints for actionable trading idea: Nifty & Bank Nifty Fut

Time & Price action suggests that, Nifty Fut (Apr) has to sustain over 9315/9330 area for further rally towards 9375-9425 & 9465-9505 in the short term (under bullish case scenario).

On the other side, sustaining below 9295/9275 area, NF may fall towards 9215-9175 & 9115-9040 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 21650-21550 & 21450-21340 area in the near term (under bear case scenario).




 SGX-NF

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