Market Mantra: 02/05/2017
(08:30)
SGX-NF: 9350 (+19
points)
For the Day:
Key support for NF:
9335-9245
Key resistance for NF:
9425-9505
Key support for BNF:
22200-22100
Key resistance for
BNF: 22450-22525
As par early SGX indication, Nifty Fut (May) will open around
9350, slightly in green following tepid global cues after subdued China PMI
& various US economic data. After terrible US GDP data on Friday, overall
US economic data including Fed’s favourite inflation deflator (PCE), ISM
Mfg/PMI, consumer sentiment all came downbeat. But, passage of temporary
spending bill, hopes of passage of the Trumpcare bill and US TSY Sec’s jawboning
about a longer term (30 yrs) TSY Bond has kept the USD/US bond yields &
risk trade in some momentum. All eyes will be on the Fed meet tomorrow to gauze
their appetite for a June rate hike or not considering the recent set of tepid
US economic data. As of now, FFR is still showing around 70% of a June rate
hike probability; Friday’s NFP job data may also help the market in this
regard.
In the morning today, China’s Mfg PMI (Caixin) came as terrible
at 50.3 for April against estimate of 51.2 (prior: 51.2). This PMI data just
above the boom/bust line of 50 along with Sunday’s official PMI may also
indicate China may be cooling down a bit following various regulatory/PBOC
tightening and control over its shadow banking.
April PMI data so far is subdued not for China, but also across
the Asia & US also; thus the overall market sentiment is not so upbeat considering
some doubt about global reflation trade going on for the last one year. Also,
lingering concern and various “war of words” regarding the NK issue may have
kept the market extremely cautious as NK may not be a case for “one off”
bombing by US; it may turn into a serious lengthy warfare, if not dealt
properly.
Back to home, after mixed set of Q4FY17 report cards & April
auto sales data so far, all eyes may be also on the Mfg PMI (April) today
(prior: 52.5) and also on the ongoing development on banking NPA resolution, fate
of PSBS consolidation and further updates on GST. There is a strong buzz from
various policy makers including RBI to privatize some of the fragile PSBS;
although if implemented, this may be a significant banking reform in India, but
the proposal may also face political backlash not only from the oppositions,
but also from Govt’s own stakeholders.
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 9475-9505 & 9550-9600 in the short term (under bullish case
scenario).
On flip side,
sustaining below 9405-9385 area, NF may fall towards 9335/05-9270/45 &
9225-9175 area in the short term (under bear case scenario).
Similarly, BNF has to
sustain over 22450 area for further rally towards 22525-22675 & 22800-23000
area in the near term (under bullish case scenario).
On the flip side,
sustaining below 22400 area, BNF may fall towards 22200-22100 & 22000-21700
area in the near term (under bear case scenario).
SGX-NF
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