Market Wrap: 18/04/2017
(19:00)
NSE-NF (April): 9116
(-52 points; -0.57%)
NSE-BNF (April): 21710
(+8 points; +0.04%)
IN 10Y G-SEC: 6.862
(+0.22%)
USDINR (Apr): 64.70
(+0.19%)
For 19/04/2017:
Key support for NF: 9085-9025
Key resistance for NF: 9200-9275
Key support for BNF: 21675-21500
Key resistance for BNF:
21775-21875
Time & Price action suggests that,
Nifty Fut (Apr) has to sustain over 9200 area for further rally towards 9255-9310
& 9375-9425 in the short term (under bullish case scenario).
On the other side, sustaining below 9175
area, NF may fall towards 9115-9085 & 9025-8970 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 21675-21615 & 21550-21425 and further to
21325-21150 area in the near term (under bear case scenario).
Nifty
Fut (Apr) today closed around 9116, down by 0.57% after making a day high of
9247 & low of 9115 and slipped quite dramatically from the day high zone in
the afternoon session, on the back of market rumour of a snap election in UK and
tepid monsoon forecast by IMD, which later came true.
Indian
market today opened almost flat amid mixed global cues following lingering
geopolitical tensions over NK-US and a slump in iron ore prices in China. But,
domestic market recovered quickly after opening flat, may be on the optimistic GDP
projections by the World Bank yesterday. Banks, especially PSBS were in demand
on the hopes of an earnings recovery and reports of more PSBS consolidations
after SBI merger; though it’s still at very preliminary discussion stage.
Market is expecting an effective resolution of stressed assets &
consolidation of PSBS in the coming days and along with that, hopes of a good
Q4FY17 report card may be the prime reasons for such strength in Bank Nifty,
although looking quite stretched valuation.
IMD
today forecasted 96% of LPA for June-Sep’17 monsoon (normal range 96-104% of
LPA-89 cms) with 50% probability of El-Nino in Aug’17 and termed it as “normal”.
But, the prediction is itself at the lower end of the LPA and may be also
termed as tepid/cautious and thus the market was not convinced. Although, IMD
predicted a probability of increased Indian Dipole event to precipitate any
El-Nino in June-Sep’17 time period, market may be apprehending a deficient
rainfall this year as predicted by the private weather forecaster (Skymet).
Going forward, actual distribution of the monsoon rain may be more important than
the overall quantum.
Meanwhile,
towards the closing of Indian market hours, UK announced an unexpected snap
election to be held on 8th June’17. The announcement of the sudden
general election by UK PM may be influenced by the recent surge in approval
rating (opinion polls) and is basically designed on the “Brexit” issue. After
Brexit referendum and subsequent invocation of Article-50 & uncertainties
of a hard or soft Brexit, this election may also add further uncertainties on the
overall geopolitical risks for UK & EU.
But,
this election may be also used as a confirmation of Brexit referendum as there
are still significant decent among general public & various policymakers of
UK regarding this Brexit episode. If there is any unfavorable verdict against
Brexit & the conservative party led by UK PM (May), the same may be used as
an excuse for no Brexit at all !! Thus, GBPUSD is gaining strength after
initial fall and now trading around 1.2730. Technically, GBPUSD has to sustain over 1.28-1.30 level for further
rally towards 1.36-1.45 zone; otherwise it may again fall and sustaining below
1.25-1.23 area, may again target 1.20-1.18 in the short to medium term.
Sudden
strength in GBP has made the FTSE lower, which is so far a beneficiary of a
weak currency. Also, the increasing political risks & uncertainty across
the EU (Brexit, UK election, France election next week, favourable referendum
for Turkey’s current Prez, who is being seen as “anti EU”) has made the global
sentiment as “risk off”.
Also,
geopolitical tensions over NK-US may be dragged on further amid “war of words”
between the two countries despite various efforts are being made by China for a
peaceful solution. As par some reports, NK may be gearing itself for a Nuke war
and Russia may be also deploying missiles at NK border in anticipation of an
imminent US attack on NK !!
Today
Fed VP (Fischer) also downplayed any “taper tantrum” like in 2013 for Fed’s
balance sheet (QE bonds unwinding) and that may be also responsible for some weakness
in the USD at EU session, which is another reason for “risk off”. Contrary to
earlier perception of a safe heaven, now USD is being seen as a risk or
reflationary currency. But various geopolitical tensions involving US with
Syria, NK, Afghanistan and legislative chaos within Trump’s administration may
be now diverting the perception of “Trumponomics” and USD is under great
pressure. Also, Trump’s effort to talk down the USD and recent spate of
disappointing US economic data (tepid core CPI & consumer spending) may be
also responsible for USD/US BOND YIELD weakness.
After
market hours today, RBI announced some policy measures for increased
provisioning (PCR) even for standard assets and increasing monitoring for
telecom loans, which may be negative for PSBS. Overall Q4 TCS result may be
also termed as very tepid and below/at par market expectations.
IMF
also predicted tepid GDP growth for India in FY-18 as 7.2% on the back of
DeMo/full ReMo concerns, stressed banking assets (NPA), PSBS recapitalization issues,
tepid loan growth, issues of stressed corporates, and lack of vital policy / reforms
implementations in a time bound manner (GST/Land & Labour bill). IMF sees
FY-17 GDP at 6.8% and FY-19 GDP at around 7.7% as DeMo effect will gradually
subsidize.
Tomorrow,
all eyes may be on the IIB & Yes Bank result after poor show by the IT
bigwigs (Infy & TCS). An upbeat report card from Gruh Finance yesterday may
have also raised a great hope for financials & banks for their Q4 earnings.
Some of the real estate shares were in good demand today amid reports of
deleveraging and subsequent investment by angel investors in the commercial segment.
Metals were also strong initially after reports of close down of some aluminum
plants in China as a part of consolidation & environment concern.
SGX-NF
BNF
GBPUSD
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