Thursday, 15 June 2017

Nifty May Open In Red Tracking Subdued Global Cues After Terrible US Economic Data, A Dovish Hike By Fed With Tapering Of QE Bonds And Reports Of Probe On Trump; Domestic Market May Focus On GST Disruptions & PSBS Consolidation And NPA Resolution

Market Mantra: 15/06/2017 (08:30)

SGX-NF: 9605 (-33 points)

For the Day:

Key support for NF: 9580-9535/9505

Key resistance for NF: 9675-9715

Key support for BNF: 23350-23200

Key resistance for BNF: 23650-23750

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 9580-9535 & 9505-9405 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 23350-23200 & 23050-22950 area in the near term (under bear case scenario).

As par early SGX indication, Nifty Fut (June) may open around 9605, almost gap-down by 33 points following tepid global cues after report of congressional probe on Trump for the alleged Russian link, soft US economic data released yesterday, a dovish hike by Fed with gradual tapering of its B/S (QE bonds) as expected. Although, statement of Fed was dovish as expected, to balance this, Yellen sounded somewhat hawkish in the Q&A session and termed the tepid US CPI as transitory. In brief, Fed may be optimistic about US growth, job market but quite pessimistic about inflation & fiscal stimulus (Trumponomics). But, Yellen is not ready to also acknowledge the subdued inflation and this Fed fantasy may be keeping the market in balance; as par Fed, consecutive US rate hike is a sign of confidence on the economy. But, more than Fed hike; taper tantrum may hurt the risk trade & specially EM. All eyes may be now on the PBOC/China for its monetary policy adjustments after Fed hike as it may be the primary source of concern after Fed hike.

Back to home, RBI may be constrained to be neutral in order to keep the policy parity with a hawkish Fed despite room for rate cut. All eyes may be also on the GST (disruptions) and PSBS consolidation & NPA resolution.


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