Nifty May Open In Negative Following Subdued Global Cues & Delay In Passage Of “Trumpcare” Bill; Indian Market May Continue To Face Stress Ahead Of GST, FNO Exp & NPA Resolutions Issue

Talk of QT (Quantitative Tightening) by the major central banks (Fed/ECB/PBOC/BOE & BOJ ?) may not be good for the risk assets (EQ) going forward.

Market Mantra: 28/06/2017 (08:30)

SGX-NF: 9485 (-29 points)

For the Day:

Key support for NF: 9475/9440-9400/9340

Key resistance for NF: 9530/9560-9590/9630

Key support for BNF: 23000-22700/22450

Key resistance for BNF: 23350-23550

Time & Price action suggests that, NF has to sustain over 9590 area for further rally towards 9630/9655-9700/9735 in the short term (under bullish case scenario).

On the flip side, sustaining below 9560-9530 area, NF may fall towards 9475/9440-9400/9340 area in the short term (under bear case scenario).

Similarly, BNF has to sustain over 23350 area for further rally towards 23550-23750 & 23850-24000 area in the near term (under bullish case scenario).

On the flip side, sustaining below 23300-23250 area, BNF may fall towards 23000-22700 & 22450-22300 area in the near term (under bear case scenario).

As par early SGX indication, Nifty Fut (June) may open around 9485, almost 29 points down following tepid global cues and domestic concern of GST disruptions. Overnight US market (DJ-30) also closed in negative (-0.46%) after IMF downgraded US GDP for 2017-18 and “Trumpcare” bill is being delayed again under the present format.

Also, EU antitrust fine of $2.7 bln on Google for skewing its search results and abusive dominant position (monopoly) may have affected the sentiment of the Tech (FAANG) shares and together with that some cautious comments about US stock market bubble by some influential Fed members has kept the US market down yesterday. USD/US bond yields were also depressed yesterday after some initial run up following better than expected US consumer confidence.

An unexpected hawkish stance from Draghi yesterday boosted the EUR for hopes of an imminent QE tapering and made the EU/global stocks lower. Fed is also on the QT path and suddenly all the major central banks are trying to follow the Fed path and already transformed into neutral monetary stance form accommodation. Dearth of easy money (QE) may not be good for the risk assets (EQ) in the coming days.

Back to home, Indian market may continue to face some more stress ahead of GST launch in the present complex format and FNO Exp tomorrow; long roll over may be limited this time until we have got clearer picture. Also, NPA/IBC provisioning issues and 4% below normal rain in June so far may affect the domestic market sentiment.

 NF