Nifty May Open In Green Following Mixed Global Cues & Favourable GST Rates (?); All Eyes May Be On The SBI Report Card Today To Assess The NPL Situation After BOB’s Mixed Q4 Numbers

Market Mantra: 19/05/2017 (08:30)

SGX-NF: 9455 (+19 points)

For the Day:

Key support for NF: 9415/9395-9360

Key resistance for NF: 9470/9500-9535

Key support for BNF: 22625-22450

Key resistance for BNF: 22725-22900

As par early SGX indication, Nifty Fut-I may open around 9455, gap up by around 19 points following mixed global cues. Overnight, US market closed in slight positive (+0.27%) amid better than expected economic data (Phy Mfg index & initial jobless claims). But more than economics, what has helped the USD/risk trade yesterday late NY afternoon session may be the C-Span video clip, which was apparently showing ex-FBI director Comey testifying (old) that no US DOJ or AG has pressurized him to end any investigation; market interpreted it as no WH (Trump) officials has asked him to stop any Russian link investigation. Thus, overall US political risk & Trump’s impeachment probability are still there and thus global market sentiment is now cautious as evident by the subdued US bond yields.

Back to home, Indian market may initially celebrate for favourable GST rates for FMCG, capital goods (mixed?) and coal (CIL & thermal power companies). Thus, whatever be the lower GST rates from the current effective tax rate (VAT+ED) has to be passed on to the consumers and thus it may spur more consumers spending amid lower rates for FMCG products. But, lower GST rates may also invite de-stocking of the products and a temporary disruption thereby for confusion over input tax credit transmission mechanism.

Hints for actionable trading ideas for NF & BNF:

Time & Price action suggests that, Nifty Fut (May) has to sustain over 9535 area for further rally towards 9600-9640 & 9680-9770 in the short term (under bullish case scenario).

On flip side, sustaining below 9515 area, NF may fall towards 9470-9415/9385 & 9360/9310-9280/9240 area in the short term (under bear case scenario).

Similarly, BNF has to sustain over 22900-23000 area for further rally towards 23075-23200 & 23325-23450 area in the near term (under bullish case scenario).

On the flip side, sustaining below 22850 area, BNF may fall towards 22725-22625 & 22450-22300 area in the near term (under bear case scenario).

 SGX-NF