Market Mantra: 07/08/2017 (09:00)
SGX-NF: 10090 (-21)
For the Day:
Key support for NF: 10070-10045/10000
Key resistance for NF: 10155-10205
Key support for BNF: 24900-24700
Key resistance for BNF: 25050-25150
Hints for positional trading: Strategy-SELL ON RISE
Time & Price action suggests that, NF has to sustain over
10205 area for further rally towards 10275-10325 & 10380-10455 in the short
term (under bullish case scenario).
On the flip side, sustaining below 10185-10155 area, NF may fall
towards 10070-10045/10000 & 9935-9865 area in the short term (under bear
case scenario).
Similarly, BNF has to sustain over 25150 area for further rally
towards 25275-25500 & 25695 -25865 area in the near term (under bullish
case scenario).
On the flip side, sustaining below 25100-25050 area, BNF may
fall towards 24900-24700 & 24600-24400 area in the near term (under bear
case scenario).
As par early SGX
indication, Nifty Fut (Aug) may open around 10090, down by almost 21 points
tracking mixed global/Asian cues amid a blockbuster US NFP report on Friday,
but ongoing geo-political tensions over NK, political drama over Trump’s alleged
Russian links and even a buzz of a small scale conflict between China &
India over the Dokalam LOC (Sikkim) issue.
Overnight, on Friday weekend,
most of the EU markets were closed with handsome gains amid mixed earnings, but
fall of EUR/EUR bund yields to some extent as USD soared after the upbeat job
report coupled with renewed hopes of an impending US tax cut/reform legislation
after WH economic adviser Cohn has indicated for the same.
US market (DJ-30) also closed
higher (+0.30%) supported by upbeat economic data coupled with upbeat report
card from some of the banks & financials. But a higher USD may also affect
the US market sentiment in the days ahead as a weak USD may be one of the
primary drivers of the US stock market coupled with an upbeat earnings; over
72% of the S&P companies may have produced results better than market
estimate in Q2.
A lower USD because of
overall soft economic data, subdued inflation and an apparent dovish Fed seems
to be good for US corporate bottom line (exports income) and may be also good
for the imported inflation in the US economy; overall it looks like a goldilocks
situation, where job market is quite tight and producing jobs with decent
earnings/wage growth without any runaway inflation in the economy; i.e. not
sufficient enough to create an unabated wage inflation.
Back to home, Indian
market continue to haunt by the concern of stretched valuations amid mixed Q1
report cards despite Friday’s closing hours euphoria about Govt’s move to list
a mega ETF (Bharat-22) comprising of the CPSE, SUUITI & PSBS trim its
holdings gradually in those companies.
Govt may be also very
concerned about non-transmission of input tax credit (ITC) to the consumers by
small retailers/traders across the line and various channel checks may be also
indicating that in Q2 also, there may be some GST disruptions as most of the
small retailers or traders are not ready for a GST registration at all.
A strong INR even after
hawkish cut by RBI last week may be also not good for the Indian market (Nifty),
being an export heavy index, although it may be good for the overall import
oriented Indian economy.
Govt may now reconsider to
bring the petro products (petrol & diesel) in the GST with a reasonable tax
component as overall tax collections & compliances from other sources is
now gradually improving after DeMo, UID & GST; a lower gasoline price in
line with the international prices may also act as a stimulus for the Indian
economy, which is historically high for decades, being one of the easiest tax
revenue source for the Govt.
Overall, tax component on
petro products in India may be around 75% on an average, which is far greater than
global average of around 25%.
SGX-NF
No comments:
Post a Comment