Nifty May Open Almost Flat Amid Tepid Global Cues Tracking Higher EUR & High Probable ECB QE Tapering And Intensifying US Political Risks; RIL May Be In Focus Today

Market Mantra: 21/07/2017 (09:00)

SGX-NF: 9890 (+3 points)

For the Day:

Key support for NF: 9865-9810

Key resistance for NF: 9930/9960-9985/10005

Key support for BNF: 24250/24150-24000/23900

Key resistance for BNF: 24350-24500

Hints for positional trade:

Time & Price action suggests that, NF has to sustain over 10005 area for further rally towards 10050-10115 & 10195-10250 in the short term (under bullish case scenario).

On the flip side, sustaining below 9985-9960/9930 area, NF may fall towards 9865-9810 & 9760- 9715 area in the short term (under bear case scenario).

Similarly, BNF has to sustain over 24350 area for further rally towards 24500-24700 & 24875-25050 area in the near term (under bullish case scenario).

On the flip side, sustaining below 24250 area, BNF may fall towards 24150/24000-23900 & 23700-23500 area in the near term (under bear case scenario).

As par early SGX indication, Nifty Fut (July) may open around 9890, almost unchanged tracking subdued global/Asian cues after surge in EUR despite Draghi’s best effort to sound like a dove, considering the currency strength, which may hamper the export driven growth of the EZ economy.

But, Draghi’s indirect hints of QE tapering discussions may have ignited the EUR, although EUR bunds has not reacted adversely so far, keeping the yields almost flat; as par latest BBG report, ECB may consider QE tapering signal in its Oct meet, if not in the Aug Jackson Hall Symposium.

Overall, it now seems that ECB may follow Fed’s actual path of QT/QE tapering, which is expected to start from Sep’17 if there is no terrible US economic data or political event (like Trump impeachment); if Fed indeed starts or provide a definitive indication of QE tapering, then ECB may be bound to follow and it may be further turn to be a global coordinated QT (Fed starts the QE first and it will also end first; rest will follow).

Back to home, Indian market may focus on Q1FY18 earnings and NPA/IBC issues with Banks, actual resolution of which may linger for quite a few years. RIL & Wipro/IT may provide some support to the Indian market today after upbeat report card yesterday, while telecom may be under pressure ahead of RIL/R-Jio’s AGM!!

 SGX-NF