Market Mantra: 10/08/2017 (09:00)
SGX-NF: 9880 (-32)
For the Day:
Key support for NF: 9870-9825
Key resistance for NF: 9950-10020
Key support for BNF: 24400/24250-23900
Key resistance for BNF: 24650/24800-25150
Hints for positional trading: Strategy-SELL ON RISE
Time & Price action suggests that, NF has to sustain over
10020 area for further rally towards 10065-10115 & 10155-10205 in the short
term (under bullish case scenario).
On the flip side, sustaining below 10000-9940 area, NF may fall
towards 9870-9825 & 9765-9705 area in the short term (under bear case
scenario).
Similarly, BNF has to sustain over 24800 area for further rally
towards 25050-25150 & 25250-25500 area in the near term (under bullish case
scenario).
On the flip side, sustaining below 24750-24650 area, BNF may
fall towards 24400-24250 & 23900-23750 area in the near term (under bear
case scenario).
As par early SGX
indication, Nifty Fut (Aug) may open around 9880, down by almost 32 points on
subdued global/Asian cues amid increasing concern of China tightening after
PBOC fixed USDCNY at 6.6770 vs 6.7075 yesterday, much stronger and strongest
since late Sep’16; but PBOC also injected a net 30 bln Yuan today.
China may also take some
steps to control the soaring steel rebar prices on speculation of tight supply
as Govt is closing some jumbo companies, primarily on environment concern &
its deleveraging efforts coupled with a fair supply/demand dynamics. As par
recent data, China outbound real estate investments has plunged almost 82% in
H1CY17, thanks to ongoing regulatory tightening; but it may be a bad news for
reflation addicted developed market (DM).
Meanwhile, US rating
agency Fitch also predicted slower growth for the Chinese firms in 2018 due to
PBOC tightening and deleveraging; growing China bankruptcies & slowing
credit may also help to cut the China over capacity.
Thus, all these
regulatory tightening aiming at a stable China ahead of its party congress may
slow the growth engine of the world and thus it may be a major concern for the
world (DM), thriving for inflation/reflation.
Overnight, US market
(DJ-30) closed lower (-0.20%), but well off the day low as US secretary
Tilerson downplayed Trump’s “Fire & Fury” narratives and instead asked the
American citizens to have a good night sleep without any serious geo-political
worries over the NK issues. US Gen Kelly also came forward with a soft stance
before Trump is able to tweet some more bytes and all these may have helped to
pacify the situation and coupled with that, modest/mixed US economic data
calmed the storm on USD too!!
Meanwhile, NK is “planning”
to hit (test) a place 30-40 kms away from US military base Guam with 4
simultaneous missiles and their army will compete the whole planning within
mid-Aug and after that depending on the tone of Trump, NK Prez Kim may order to
strike finally; so the whole NK-US rhetoric now seems to be an ideal war Novel rather
than any serious stuffs.
NK has also described
Trump’s “Fire & Fury” comments as “load of nonsense” and described Trump as
a “guy too bereft of reasons for negotiations and only absolute force can work
on him” !!
Thus, these NK-US
geo-political tensions may be a simple “war of words” rather than any serious “war
of bullets/nukes” and market may now focus on economics rather than politics ahead
of US CPI tomorrow.
Back to home, Indian
market may continue its focus on the Shell cos fiasco as more names may be
coming from SEBI shortly amid concerns of serious money laundering effort
during DeMo. But, Pharma cos may bounce back to some extent today after upbeat
report card from Auro Pharma despite a challenging environment for Pharma sector;
metals may be under pressure after reports that China may curb down on soaring
prices.
Although, the 12 “blue
chip” cos suspected as “shell” may be permitted to resume trading shortly, the margin
funding crisis of the brokers & the credibility issues of the whole Shell
narratives may continue to haunt the Indian market for the time being;
technically, 9765 Nifty may be an important support zone for the overall market
amid mixed Q1 earnings so far.
Govt may also tighten its
war on black money by making the UID mandatory for the Indian capital market.
SGX-NF
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