Market Mantra: 20/09/2017 (09:00)
SGX-NF: 10160 (-8)
For the Day:
Key support for NF: 10150-10090
Key resistance for NF: 10205-10250
Key support for BNF: 24900-24800
Key resistance for BNF: 25150-25250
Hints for positional trading:
Hints for positional trading:
Technicals
indicate that, NF has to sustain over 10205 area for further rally towards
10250- 10325 & 10385-10455 area in the short term (under bullish case
scenario).
On the flip side, sustaining below 10185 area, NF may fall
towards 10150-10090 & 10050-9975 area in the short term (under bear case
scenario).
Similarly, BNF has to sustain over 25150 area for further rally
towards 25250-25350 & 25585-25785 area in the near term (under bullish case
scenario).
On the flip side, sustaining below 25100 area, BNF may fall
towards 24900-24800 & 24600-24500 area in the near term (under bear case
scenario).
As par early SGX
indication, Nifty Fut (Sep) may open around 10160, almost flat tracking muted
global/Asian cues on concern of a dovish Fed coupled with Trump’s rhetoric to annihilate
the “rocket man Kim” & NK completely if US or any of its allies is attacked
by the hermit state.
But on more serious note,
US defence sec yesterday has signalled that US may shoot down any further
missile launched by NK even if it’s not directed towards US or Guam. All eyes
now may be on the weekend response of Kim after Trump’s veiled threat and as
par some reports, NK may be in the final stages of nuke enabled ICBM development
and in that scenario, they may require more such tests in the coming days.
Today all eyes may be on
the economics rather than politics; a Fed BS tapering may be already discounted
by the market, but actual tapering details (quantity & duration) may now
matter most. In all probability, Fed may maintain its previous dot-plots of a
Dec’17 rate hike probability in order to maintain its credibility, everything
being equal. But, Yellen’s presser (Q&A) may be most important today to
gauze Fed’s perception of a Dec rate hike.
FFR is now indicating
below 50% probability of a Dec move by Fed; i.e. equivalent to neutral or no
rate hike; a dovish Fed may be negative for USD, which in turn may not be good
for the export heavy Asian & EU markets.
Although, India being a
import oriented economy, it may benefit from a lower USD but as Nifty earnings
is heavily dependent on export by almost 60%, a lower USD may be also not good
for the Indian market also.
Overnight, US market closed
at another record high as “usual”; DJ-30 gained by around 0.20%, while
S&P-500 closed almost flat at 2507 (+0.11%) and NASDAQ was almost unchanged
(+0.10%). US market was helped by banks & financials yesterday on higher US
bond yields, which is favourable for their business models. Also, telecoms have
helped DJ yesterday on merger news between T-Mobile & Sprint.
USD/US bond yields got
some boost yesterday after Trump NK rhetoric on talks of an imminent US tax
reform plan and a Reuter’s economist survey, which is indicating that almost
76% is expecting a Dec’17 rate hike by Fed and more importantly, 45% of the
economists said they see little connection between unemployment & inflation
because of changing scenario of automation, globalization etc (structural
reasons).
Back to home, Indian market (Nifty-Fut) after opening
almost flat may focus on the telecom after controversial IUC reduction which is
highly favourable to R-Jio; but this issue may ultimately be settled by SC and may
also be negative for Govt revenue from telecom sector apart from risks of
another huge telecom NPA for the banks.
Market may also focus on
Govt’s talks of fiscal stimulus to revive the slowing Indian economy and huge
amount of GST input tax credit claims of around Rs.65000 cr stuck with the
Govt; business & export may be suffering significantly for this blockage of
working capital.
SGX-NF
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