Nifty May Open Almost Flat Following Mixed Global Cues & Some Rebound Of China/HSI Market; Cautious Tone Of IMF About India’s Growth Prospect As A Fall Out Of DeMo May Also Limit Any Significant Upside Despite Optimism About NPA Reform

Watch 570-550 zone as vital support for Auro Pharma (LTP: 605) amid concerns of US FDA observations

Market Mantra: 09/05/2017 (08:30)

SGX-NF: 9355 (+10 points)

For the Day:

Key support for NF: 9320/9305-9295/9265

Key resistance for NF: 9385/9400-9425/9475            

Key support for BNF: 22625-22500

Key resistance for BNF: 22875-22950

As par early SGX indication, Nifty Fut-I may open around 9355 following mixed global cues. Overnight US market also closed almost flat; but in the morning China & Hong Kong market rebounds from their key technical support area after some days of intense selling. USD/US bond yields is gaining strength as smart money may be again entering risk assets after the emphatic win of Macron in the French election, which reduced the EU political risks to a great extent; although there are still significant uncertainty about hard or soft Brexit. In addition to upbeat NFP job data on last Friday, USD may also got some support from positive US employment index data yesterday; but tepid trend of wage inflation/growth and subdued consumer spending may also limit any significant USD (risk on) rally from here; one may watch 113.50-114.50 zone in USDJPY for any decisive movement.

Back to home, Indian market may also look into progress of GST as Govt is committed to implement it from July’17, which may be seen as another short term economic disruption after the DeMo. All eyes may be also on the banks/PSBS, more details of NPA reforms/resolution mechanism and also on the IMF’s cautious tone about India’s growth potential in FY-18 & FY-19. IMF projected India’s GDP as 7.2% & 7.9% in FY-18 & 19, slightly below their earlier forecast due to DeMo related economic disruptions & spillover effect, tepid private investments and issues of twin balance sheets (huge banking NPA & stressed corporate balance sheets).

Hints for actionable trading ideas for NF & BNF:

Time & Price action suggests that, Nifty Fut (May) has to sustain over 9425 area for further rally towards 9475-9510 & 9550-9600 in the short term (under bullish case scenario).

On flip side, sustaining below 9405-9385 area, NF may fall towards 9320/9305-9295/9265 & 9215-9170 area in the short term (under bear case scenario).

Similarly, BNF has to sustain over 22875 area for further rally towards 22950-23075 & 23200-23475 area in the near term (under bullish case scenario).

On the flip side, sustaining below 22825 area, BNF may fall towards 22625-22500 & 22400-22225 area in the near term (under bear case scenario).

SGX-NF