Market Mantra: 31/08/2017 (09:00)
SGX-NF: 9860 (-20)
For the Day: (For Aug Exp/Spot)
Key support for NF: 9830-9790
Key resistance for NF: 9905-9950
Key support for BNF: 24200-24000
Key resistance for BNF: 24400-24575
Hints for positional trading:
Time & Price action
suggests that, NF has to sustain over 9950 area for further rally towards
10030-10075 & 10155-10200 area in the short term (under bullish case
scenario).
On the flip side, sustaining below 9930 area, NF may fall
towards 9885/9830-9790 & 9750-9700 area in the short term (under bear case
scenario).
Similarly, BNF has to sustain over 24400 area for further rally
towards 24525-24575 & 24675- 24775 area in the near term (under bullish
case scenario).
On the flip side, sustaining below 24350 area, BNF may fall
towards 24200-24000 & 23850-23700 area in the near term (under bear case
scenario).
As par early SGX
indication, Nifty Fut (Aug) may open around 9860, down by almost 20 points
tracking mixed global cues & renewed concern of Govt’s war on black money
following terrible RBI report on the overall outcome of DeMo. Indian market may
also focus on Q1FY18 GDP, which is poised to come around 6.6% amid Pre-GST
disruptions against prior figure of 6.1% (YOY).
Overnight US market
closed in positive on measured US response on NK missile panic coupled with a
blockbuster GDP & ADP job data and renewed optimism about US tax reform;
USD/US bond yields got a boost ahead of tomorrow’s NFP job data. US GDP for Q2
flashed as 3% against estimate of 2.7% supported by solid consumer spending
& business investment, although trade data (export/import) was subdued.
DJ-30 closed around 0.12%
higher, while S&P-500 rallied by almost 0.46% to finish at 2458 and Nasdaq
was up by almost 1.05% boosted by FANG (Tech) shares.
Although, Trump has said
nothing new in his campaign style tax reform propaganda, he has mentioned about
15% desired corporate tax rate in US, which is now around 35% (effective rate
around 38-40%). Some US congress members has termed it too low and not
acceptable at all. Probably, as a hardcore negotiator, Trump may settle around
25% US corporate tax rate with less deductions in his agenda for a simple US
tax structure (deregulation).
Still, even with 25% US
corporate tax rate, there may be significant downfall in Govt revenue and Trump’s
plan does not indicate any step, how to manage such shortfall in revenue
without cutting corresponding Govt capex/expenditure. In that sense, Trump’s
tax reform plan was light on details and heavy on political populism to make America
great again. Market will look for more specific details in his next series of
tax campaign speech.
Interestingly, Trump has
praised the GOP members for this tax plan, but not mentioned anything about
Cohn, who is supposed to be the main architect of his tax reform plan; market
may be little anxious about current relationship between Trump & Cohn after
some harsh, but measured criticism about the VA racist incident by Cohn in his
tax reform interview.
US stock future (SPX-500)
is now trading around 2457, marginally up by 0.09% and looking ahead it need to
stay over 2465 area for 2475-2490 zone; immediate support may be now around 2450-2440
area.
Back to home, Indian
market may focus on Govt’s stance against black money after yesterday’s RBI
report of DeMo, which may be indicating an economic blunder although it is
proved as a political master stroke by NAMO.
In any way, whatever be
the narrative, Govt/FMO is justifying the DeMo as a crusade against black
money; although it’s a known stance, in order to reach a definitive conclusion,
Govt may also intensify its war against black money/shell cos ahead of 2018-19
series of state & general election and that may be negative for the Indian
market & consumption story, although it may be quite right morally &
ethically.
NF
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