Market Mantra: 28/08/2017 (09:00)
SGX-NF: 9890 (+10)
For the Day:
Key support for NF: 9845-9785
Key resistance for NF: 9905-9945
Key support for BNF: 24200-24000/23900
Key resistance for BNF: 24400-24575
Hints for positional trading:
Time & Price action suggests that, NF has to sustain over
9905 area for further rally towards 9940-9980 & 10030-10075 area in the
short term (under bullish case scenario).
On the flip side, sustaining below 9885 area, NF may fall
towards 9845-9785 & 9750-9705 area in the short term (under bear case
scenario).
Similarly, BNF has to sustain over 24400 area for further rally
towards 24525/24575-24675 & 24775-24875 area in the near term (under
bullish case scenario).
On the flip side, sustaining below 24350 area, BNF may fall
towards 24200-24000 & 23900-23750 area in the near term (under bear case
scenario).
As par early SGX
indication, Nifty Fut (Aug) may open around 9890, almost flat amid mixed global
cues marked by an un-dovish Draghi & un-hawkish Yellen (neutral) coupled
with Cohn’s talks of US tax reform passage by 2017 and the devastating &
catastrophic unprecedented Harvey flood in US Texas, Huston area, hubs of oil refineries.
US market closed almost flat, but
well off the highs on Friday weekend after basically a non-event Jackson Holespeech by both Yellen & Draghi; but overall, both has not touched any
specific monetary policy or BS/QE unwinding. Yellen was un-hawkish, didn’t
mention anything about the high probability Sep’17 Fed BS tapering and Draghi
not tried to talk down the EUR and on the contrary sounds quite optimistic
about global/EU growth prospects.
Thus EURUSD jumped to
almost 1.1952, at multi-month high, pulling down the equities as market knows,
despite silence about ECB QE, Draghi may have no other option but to taper the
same sooner rather than later after Dec’17 and may also indicate further normalization
of ECB monetary policy as in the changing & improving prospects of EZ economy
does not warrant such monetary stimulus (QQE/NRIP/ZRIP) further. Most of the
other influential ECB policymakers are also making this point repeatedly for
the last few months, which may be a signal for a major policy change just like
Fed,
BOJ may be also trimming
down its JGB purchase as in a scarce market, even a less amount of buying
(intervention) is causing the JGB yields to go lower, which is now Kuroda’s
ultimate goal, despite his addiction to the QQE; BOJ is bound to follow Fed
& ECB in trimming down their QQE gradually in the days ahead. As par some
estimates, total global QE may be now around 40% of cumulative global GDP!!
Before those Jackson Hole
speeches, US market got some boost over an interview of Gary Cohn, the CEA of
Trump’s NEC and the chief architect of US tax reform policy, promising passage
of the tax bill by Dec’17. Both DJ-30 & SPX-500 closed around 0.14% higher,
while NASDQ dropped by 0.09%.
As we all know, Texas
& Houston areas of US are now under devastation flood caused by Harvey
cyclone; the area is a major production hubs of US gasoline and thus its now at
2 yrs high as the tropical storm has caused almost 25% of gasoline production from
the Gulf of Mexico. But crude oil is trading lower because of concern of
further glut as nearly all the US refineries in the Harvey affected area are
closed now for the last few days and they are not in a position to take
deliveries of crude oil to refine it into gasoline.
Although, this Harvey
flood may be catastrophic to US economy by some extent and insurance, airlines
may be worst affected, in the long term, this may also prompt Trump to pass a
major infra spending plan for the worst flood affected area and thus it may be
also positive for the US market for this Govt capex.
On the weekend, NK has
also fired three small range ballistic missiles after US secretary’s
optimism about a diplomatic solution for the Korean crisis; but as all the
three missiles has reportedly failed, it may not cause any major risk aversion
yet; although some concern remains.
US stock future (SPX-500) is now
trading around 2440, almost down by 0.16%, facing resistance around 2455 zone
and targeting 2425 area as of now.
Back to some, Indian market (Nifty Fut) may be take
some support of Infy optimism, after Nilekani appointed as executive chairman
as expected with a new board. Technically, Infy (CMP: 940) now has to sustain
over 955-985 for 1040 zone in the days ahead; but some legal challenges
(filling of class action suits in US) and the core question of growth in the
changing world of techs may continue to hunt the scrip also apart from overall
issue of succession in corporate India & conflicts of founders/promoters
& professionals (corporate governance).
Also, PSBS may be in
focus after Govt’s plan of merger & consolidation, which may not resolve
the core issues of NPA and may also face some tough political/bank union’s
oppositions; i.e. it may take considerable time for a concrete shape.
NF
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