Market Mantra: 22/08/2017 (09:00)
SGX-NF: 9810 (+46)
For the Day:
Key support for NF: 9795/9770-9740/9705
Key resistance for NF: 9835-9885/9905
Key support for BNF: 23925/23850-23750/23600
Key resistance for BNF: 24275-24400
Hints for positional trading:
Time & Price action suggests that, NF has to sustain over
9835 area for further rally towards 9885/9905-9960 & 10000-10040 area in
the short term (under bullish case scenario).
On the flip side, sustaining below 9810 area, NF may fall
towards 9770/9740-9705 & 9660 & 9585 area in the short term (under bear
case scenario).
Similarly, BNF has to sustain over 24275 area for further rally
towards 24400-24525 & 24675-24750 area in the near term (under bullish case
scenario).
On the flip side, sustaining below 24225 area, BNF may fall
towards 23925/23850-23750 & 23600-23450 area in the near term (under bear
case scenario).
As par early SGX indication, Nifty Fut
(Aug) may open around 9810, tracking positive global/Asian (HKG) cues and some
optimism about Trump’s defence spending pledge and change in strategy for the Afghanistan
policy coupled with some tax reform narratives by the TSY Secretary.
Overall, whatever be the reasons, be it
some optimism over Trump’s legislative agenda or arrest of the Spain terror
mastermind yesterday, USDJPY covered some shorts from its vital support zone of
108.50 ahead of Jackson Hole Symposium and risk trade bounced back to some
extent yesterday coinciding with the completion of “lunar eclipse”.
Overnight US market closed mixed; while
DJ-30 & SPX-500 closed in slight positive around 21704 (+0.13%) & 2428
(+0.12%); NASDAQ closed in mild red (-0.05%). Defence sectors was in demand on
Trump’s defence spending spree & war hysteria, which may be a good way of
fiscal spending (Govt capex) to boost US economy (export of defence related hardware
& software).
At the same time it’s may be easier for
Trump to pass defence related capex bill from the US congress rather than
passage of other bills like health care, infra spending or even tax reform amid
US political jitters. Incidentally, India may be now a “prime customer” of US’s
defence industry and is on a buying spree as an emergency even on elevated
prices to counter the growing threat of China.
Although Trump put Pakistan on clock
today for harboring terrors, which America is fighting for decades in Afghanistan
and giving aids of billions of dollars to Pak, Trump has also urged India to
take more active roles in Afghanistan in lieu of strategic partnership with US
and trading relation of billions of dollars.
In brief, Trump has now changed his Afghanistan
policy in contrast to his earlier election day rhetoric as sudden withdrawal
from that country may also help the terrors (Taliban, ISIS), which are eager to
attack US & its allies globally.
Thus, now US force will stay further in
Afghanistan with greater presence and Trump has also urged its allies for more
force/active roles there with financial support; really Trump is a smart
business man/deal maker!!
US market was yesterday dragged by
Techs, financials & energy related shares (lower oil prices), while
miners/basic materials helped it a bit (higher metal prices on EU/global growth
optimism coupled with tighter supply).
Back to home, Indian market (Nifty
Fut), which was opened in positive tone, again plunged soon after opening and
hovering now around 9770, almost flat. Market may be concerned over muted
Q1FY18 earnings, which fall by around 8.4% for Nifty (YOY) in contrast to earlier
rhetoric of a double digit growth.
Naturally, Indian market may now try to
adjust its stretched valuation in the coming days as at Q2FY18 Nifty EPS of
around 333 (??), fair valuation may be around 6660 (333*20) at an average PE of
20 !!
Even if we assume the projected FY: 18-19
EPS at around 425-451, considering all the green shoots narratives, the fair value
may be around 8500-9020 (425*20-451*20); but FY-18 EPS at 425 may be looking
very challenging as of now, considering DeMo, GST blues, Govt’s war on black
money (negative for Indian consumption) and stressed corporate/business &
banks (issues of twin B/S).
But whatever be the narratives, Indian market
may be enjoying the power of domestic liquidity, especially after DeMo, but
that liquidity may be now in question after Govt’s continuous war on black
money & shell cos.
As of now, India may be the most
politically stable democracy in the world, thanks to undisputed leadership
capability of NAMO; but now China may be a growing threat of Indian political
stability & a strong leadership and any miscalculation on the border
standoff or an humiliating defeat in the hand of China, may also put India in a
political crisis in the state & general elections in 2018-19.
SGX-NF
No comments:
Post a Comment