Nifty May Start Almost Flat Amid Mixed Global Cues After Trump Threatens US Debt Ceiling For His Mexican Wall Rhetoric Despite Tax Reform Optimism; Indian Market May Continue Its Focus On Subdued Q1 Earnings & Govt’s War On Black Money Coupled With Slump In Metals Today

Market Mantra: 23/08/2017 (09:00)

SGX-NF: 9800 (+6)

For the Day: 

Key support for NF: 9785/9760-9705

Key resistance for NF: 9850-9890

Key support for BNF: 23900-23800

Key resistance for BNF: 24275-24375

Hints for positional trading:

Time & Price action suggests that, NF has to sustain over 9850 area for further rally towards 9890-9940 & 10000-10040 area in the short term (under bullish case scenario).

On the flip side, sustaining below 9830 area, NF may fall towards 9785/9760-9705 & 9660-9585 area in the short term (under bear case scenario).

Similarly, BNF has to sustain over 24275 area for further rally towards 24375-24525 & 24650-24775 area in the near term (under bullish case scenario).

On the flip side, sustaining below 24225-24150 area, BNF may fall towards 23900-23800 & 23600-23450 area in the near term (under bear case scenario).

As par early SGX indication, Nifty Fut (Aug) may open around 9800, almost flat tracking mixed global cues amid Trump’s political rhetoric & pledge of building the Mexican border wall, even if it calls for a US debt ceiling (shut down); yesterday market was very upbeat in the NY session over Trump’s tax reform optimism.

It seems that now-a-days Trump is now very busy with his political campaign, may be under the influence of his “Political Guru” NAMO amid US policy paralysis; but Trump is also getting good gatherings (supporters) at his rally amid debate of nationalism & globalism despite his dwindling approval level.

In one such political rally today just few hours ago, Trump commented that “if we have to close down our Govt, we are building that wall’. He also hinted about termination of NAFTA agreement in the months ahead and urged for US congress help to pass his tax reform agenda. Trump also virtually thanked NK’s Prez Kim and said that “he respects the fact that Kim is respecting us”. Also, US Sec of state Tillerson commented that NK’s restraint may lead to negotiations

Yesterday, there are some reports that Trump’s top aides and leading congressional leaders have made significant “strides” in shaping a US tax overhaul, which may be acceptable by all the concerned stakeholders and subsequently may also be passed by the congress. There was some reports that, US may cut around $450 bln of taxes in personal & corporate tax without any corresponding cut in fiscal spending!!

Also there was some soft approach towards NK by various US officials & leaders despite NK’s narratives of a “merciless revenge” for the ongoing US-SK military drill and coupled with that Trump’s change in tone for a more balancing approach in the VA racist incident may have boosted the risk appetite sentiment & morale of USD bulls to some extent ahead if Jackson Hole Symposium.

Market is expecting a hawkish Yellen signaling for a definitive BS tapering at Jackson Hole and thus USDJPY got some short covering and fresh buying from the triple bottom area of 108.50 and risk trade resumed to some extent coupled with pause in EU terror activities.

Overnight US market also closed upbeat; DJ-30 at +0.90%; SPX-500 at +0.99% and NASDAQ also closed up by 1.36% on hopes of US tax reform and policy optimism; tech shares also helped the US market yesterday.

But, slump in metal prices in China coupled with Trump’s political rhetoric (Mexican border wall & US debt ceiling issues) may have dampened the Asian/Global market sentiment to some extent and US stock future (SPX-500) is now trading around 2450, down by almost 0.22%.

Looking ahead, SPX-500 today needs to stay above 2455-2465 area for further strength; otherwise expect some consolidation.

Back to home, Indian market (Nifty Fut) is trading in a defined range after initial volatility and may be consolidating before a next big move. Market may be concerned over stretched valuations, NPA resolutions, Govt’s “war of black money & shell cos”, Infy saga, and ongoing China-Ind “war of words” for the Doklam & other border issues apart from Korean tensions & US political jitters coupled with Fed/ECB tightening.

Indian market may also focus on slump in metal prices after China regulatory warning and buzz of an imminent PSBS merger to only 15 entities from around 30 public sector banks.

 SGX-NF