Nifty May Open Almost Flat Tracking Subdued Global Cues Amid Dilemma Of Trumpcare & Oil; Indian Market May Continue Its Focus On GST & NPA Resolution

Market Mantra: 23/06/2017 (08:30)

SGX-NF: 9625 (-6 points)

For the Day:

Key support for NF: 9605/9580-9560/9530

Key resistance for NF: 9655/9675-9725

Key support for BNF: 23650-23500

Key resistance for BNF: 23900-24000

Time & Price action suggests that, NF has to sustain over 9725 area for further rally towards 9775-9825 & 9865-9950/10050 in the short term (under bullish case scenario).

On flip side, sustaining below 9705-9675 area, NF may fall towards 9605-9580/9560 & 9530/9505-9470 area in the short term (under bear case scenario).

Similarly, BNF has to sustain over 23900 area for further rally towards 24000-24115 & 24250-24435 area in the near term (under bullish case scenario).

On the flip side, sustaining below 23850-23750 area, BNF may fall towards 23650-23500 & 23400-23300 area in the near term (under bear case scenario).

As par early SGX indication, Nifty Fut (June) may open around 9625, almost flat tracking subdued global cues. Overnight, US market/DJ-30 also closed almost flat (-0.06%) supported by health care stocks after the “secret Trumpcare” bill saw the day of the light; although most probably it may not be passed in the senate!!. On the other side, Banks were in some pressure ahead of Fed stress test result, although all the Banks are expected to pass the tests with distinction number! Oil was still under pressure amid OPEC cut squabbling and concern of supply glut despite Saudi’s effort to push it to $60 ahead of its mega IPO Armaco.

Back to home, Indian market may see some stress ahead of GST blues to make it an excuse for long unwinding as valuations may be quite stretched and Nifty EPS continues to hover below 400 level for the last few years despite all the earnings recovery narratives; in FY-18, due to GST disruptions, there is high probability of another year of tepid earnings as corporates may find it easier to make the GST as a scapegoat for any subdued earnings.

Domestic market will also focus on NPA resolution (RBI/IBC); but mere sending some high profile cases to NCLT and formation of various oversight committee (OC) may not mean that the NPA crisis will be over shortly and it may be dragged on for quite a few years unless the underlying project becomes viable itself.

SGX-NF