Nifty May Open In Green Tracking Mixed Global Cues & Upbeat Macro Data (CPI/IIP) With Hopes For An Aug Cut By RBI; But Concern Of GST Disruption & Fed’s Taper Tantrum May Also Limit Any Significant Gain

Market Mantra: 13/06/2017 (08:30)

SGX-NF: 9640 (+18 points)

For the Day:

Key support for NF: 9595/9570-9530

Key resistance for NF: 9655-9715

Key support for BNF: 23340-23150

Key resistance for BNF: 23650-23750

As par early SGX indication, Nifty Fut (June) may open around 9640, almost 18 points gap up amid mixed global cues and optimism about an Aug rate cut by RBI following lower headline CPI yesterday at 2.18%. Overnight, US market closed almost flat (-0.17%) amid ongoing concern about Tech shares; but better than expected yields in 10YUSYSY bonds and some roll back of the Dodd Frank rules may have helped the financials & banks.

USDJPY was also recovered from its intermediate support, helping some risk-on trade ahead of key US economic data ahead of Fed; which is almost poised for a 0.25% rate hike on 14^th June. But more than rate cut, Fed’s guidance will matter most and any indication about gradual tapering of its huge B/S (Taper Tantrum) may also rattle the market.

Back to home, Indian market may celebrate today initially for the lower CPI published yesterday and hopes for a RBI rate cut. But, still there are several concerns for RBI to change its neutral stance abruptly as core CPI may be sticky at 4.70% and Fed is still sounding quite hawkish. As a result of a hawkish Fed, almost all the major central bankers is now also taking the neutral monetary policy path from their past accommodative stance in order to kept the interest differential at present level.

Hints for actionable trading ideas:

Time & Price action suggests that, Nifty Fut (May) has to sustain over 9675 area for further rally towards 9715-9770 & 9825-9865 in the short term (under bullish case scenario).

On flip side, sustaining below 9655 area, NF may fall towards 9595/9570-9530 & 9490-9415 area in the short term (under bear case scenario).

Similarly, BNF has to sustain over 23650 area for further rally towards 23750-23875 & 24000-24100 area in the near term (under bullish case scenario).

On the flip side, sustaining below 23600 area, BNF may fall towards 23415-23340 & 23150-23050 area in the near term (under bear case scenario).

 SGX-NF