Nifty May Open In Green Tracking Positive Global Cues After Upbeat US NFP; Indian Market May Focus On SEBI Restrictions On P-Notes; Q1 Earnings & Ongoing GST Implementations

Market Mantra: 10/07/2017 (08:30)

SGX-NF: 96885 (+17 points)

For the Day:

Key support for NF: 9615-9580

Key resistance for NF: 9725-9775

Key support for BNF: 23300-23100

Key resistance for BNF: 23575-23800

Time & Price action suggests that, NF has to sustain over 9725 area for further rally towards 9775-9835 & 9875-9915 in the short term (under bullish case scenario).

On the flip side, sustaining below 9705 area, NF may fall towards 9655/9615-9580 & 9535-9485 & area in the short term (under bear case scenario).

Similarly, BNF has to sustain over 23575 area for further rally towards 23650-23800 & 23900-24050 area in the near term (under bullish case scenario).

On the flip side, sustaining below 23525-23400 area, BNF may fall towards 23300-23100 & 23000-22800 area in the near term (under bear case scenario).

.As par early SGX indication, Nifty Fut (July) may open around 9685, after recovering from early losses in SGX in the opening minutes (LOS: 9619) amid news of SEBI restrictions on P-Notes derivatives. SGX-NF recovered quite smartly tracing positive Global/Asian cues after upbeat NFP job data on Friday and PPI data this morning from China. An upbeat PPI from China @5.5% in June may be supportive for the inflation/reflation savvy DM economy (EU/US) as China is still the manufacturing power house of the world.

Overnight US market (DJ-30) also closed higher (+0.44%) on Friday weekend amid mixed/upbeat US NFP job data.

As P-Notes now don’t have significant volume now, there may not be any significant volatility; the market buzz of P-Notes backed FNO Short Positions of Rs.40k cr (?) may not be true; but P-Notes holder may not also like to take huge long positions in SPOT without any hedge and eventually either exit Indian market or hedge partially through SGX (Nifty Fut).

Another point is that P-notes derivatives holders may also cover their shorts (hedge) in the FNO and convert all the longs in stocks into spots or simply book both the long & shorts (positive to neutral impact); Pharma, PSBS, IT, Telecom may see some short covering amid P-Note FNO SQ UP; but spot may not respond so much.

 SGX-NF