Market Mantra: 11/08/2017 (09:00)
SGX-NF: 9760 (-118)
For the Day:
Key
support for NF: 9695/9665-9605
Key
resistance for NF: 9775-9830
Key
support for BNF: 24250/24090-23890
Key
resistance for BNF: 24500-24700
Hints for positional trading:
Time
& Price action suggests that, NF has to sustain over 9830 area for further
rally towards 9895-9950 & 10020-10065 area in the short term (under bullish
case scenario).
On
the flip side, sustaining below 9800-9775 area, NF may fall towards 9695-9665
& 9605-9560 area in the short term (under bear case scenario).
Similarly,
BNF has to sustain over 24500 area for further rally towards 24700-24850 &
25050-25150 area in the near term (under bullish case scenario).
On
the flip side, sustaining below 24450 area, BNF may fall towards 24250-24090
& 23890-23790 area in the near term (under bear case scenario).
As par early SGX
indication, Nifty Fut (Aug) may open around 9760, almost down by 118 points
tracking subdued global cues amid simmering NK-US tensions and China-India
border standoff at Doklam. Yesterday, Trump renewed his NK rhetoric again by
commenting that his previous “Fire & Fury” reference may not be enough for
Kim and NK must get their act together; otherwise things will happen to them,
they never thought possible.
In the process, Trump
also vowed to increase the US defense budget by billions of dollars in an
attempt for increased fiscal spending for the US economy!! But, his defense
secretary preferred to take more diplomatic approach to tackle this NK issues,
stressing that tragedy of a war well known and that a military conflict could
be catastrophic.
NK, on the other side
vows to mercilessly wipe out the provocateurs (Trump), saying that US will
suffer a shameful defeat!!
Among all these games of
war-mongering, China’s stand may be neutral if NK first attacks US military
base and US/SK retaliates; but if US & SK
carry out any pre-emptive strikes against NK to overthrow Kim and try to
change the current pattern of the Korean peninsula, China may not be silent
spectator and will prevent them from doing so.
Thus, all these lingering
NK-US geo-political tensions coupled with terrible US PPI data yesterday and
some dovish script from Fed’s Dudley is making the USDJPY lower and it plunged
below the 109 mark ahead of crucial US CPI data today; appeal of safe heavens
of Yen, EUR, Gold has made the risk trade off and moreover a surging EUR is
negative for the global stocks in addition of strong Yen and other export heavy
Asian currencies.
From the overall NK
narratives so far, it seems that Trump may keep his “Fire & Fury” momentum
for some more days as it’s very helpful to keep the USD down to make “America
Great” and also to divert attention of the core issues of US economy & his
failure to peruse legislative agenda like Trumpcare & US debt ceiling
issues in addition of poor visibility of Trumponomics rhetoric (US tax reform
& fiscal spending).
Overnight, US market
(DJ-30) also closed lower around 0.93% down tracking NK tension flare up,
terrible US economic data, lower USD and slump in FANG/Tech stocks coupled with
some muted earnings. At a glance, SPX-500, which is now trading around 2435 has
immediate support of 2420 and sustaining below that 2400 area may be clearly
visible as of now.
Back to home, Indian
market may be in further stress from the ongoing China-India border stand-off at
Doklam, which may take serious turn as some complex geo-political issues and
business interest of China is involved there (CEPC-BIMSTEC road
connectivity)much to the dislike of India.
Apart from further SEBI “Shelling”
and concern of muted/mixed Q1 earnings & stretched valuations, RBI’s
dividend to the Govt of around Rs.30656 cr vs expectations of around 1 lakh cr
(DeMo profit?) and prior figure of around Rs.65600 cr may be very disappointing
and may also cause a big fiscal hole despite upbeat indirect tax collections
and improved tax/GDP ratio as a fall out of DeMo.
Overall, keeping in view
the May’2019 general theme, Govt may continue its war on black money/corruption
narrative by digging more on Shell cos, which may be a perfect vehicle for
money laundering and also by linking every financial transaction with UID &
GST.
Govt may be extremely right in its approach ethically & morally, but
it may not be good for the overall Indian market & economy structure. But
again, today’s pain may be tomorrow’s gain; for the time being margin funding
issues because of “Shelled cos” may be turning into a serious headwind, especially
for the HNI heavily leveraged retail investors/traders.
SGX-NF
SPX-500
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