Nifty May Open In Green Amid Positive Global Cues After Trump Made A Temporary US Debt Limit Extension Deal For Harvey Support; Indian Market May Focus On Valuations & Govt’s War On Black Money

Market Mantra: 07/09/2017 (09:00)

SGX-NF: 9960 (+16)

For the Day:

Key support for NF: 9940/9910-9855/9815

Key resistance for NF: 10000-10050

Key support for BNF: 24200-24000

Key resistance for BNF: 24525-24675

Hints for positional trading:

Time & Price action suggests that, NF has to sustain over 10000 area for further rally towards 10050-10090 & 10160-10205 area in the short term (under bullish case scenario).

On the flip side, sustaining below 9980 area, NF may fall towards 9940-9875 & 9820-9745 area in the short term (under bear case scenario).

Similarly, BNF has to sustain over 24525 area for further rally towards 24575-24675 & 24775-24875 area in the near term (under bullish case scenario).

On the flip side, sustaining below 24475-24400 area, BNF may fall towards 24300/24200-24000 & 23850-23700 area in the near term (under bear case scenario).

As par early SGX indication, Nifty Fut (Sep) may open around 9960, edged up by around 16 points tracking positive global cues after Trump yesterday made a US debt limit extension up to mid-Dec’17 by ditching some of his own RNC members and colluding with DNC, keeping in mind emergency funding for the Harvey affected area.

Although, this temporary US debt limit extension may have provided some respite in the global risk-on trade marred by ongoing NK geo-political tensions, Trump may face various political challenges in the days ahead.

Overnight US market closed in positive, but off the high on fresh missile-mongering by SK PM, who seems to be almost certain of another NK ICBM test by 9^th Sep, the foundation day of NK. Incidentally, SK is now also deploying US anti-missile defence system (THAAD) in various locations for any NK attack.

USD was also under stress after Fed VC Fischer resigned suddenly yesterday (to be effective from mid-Oct); he was a known hawk and his resignation may pave the way for more dovish FOMC rejig as par Trump’s preference to keep USD lower; Yellen may also get an extension for continuity of present Fed policy and Cohn is unlikely to be nominated by Trump because of public criticism of the VA supremacist incident by Cohn.

USD/US market is also under pressure not only from Irma hurricane, but also from two other looming hurricanes; but some tax reform talks by Trump at his Dakota rally and also by his TSY Sec assuring that it will be ready by Sep may have calmed the nerves of the USD bulls yesterday..

DJ-30 closed around 0.25% higher, while S&P-500 was also edged up around 2466 (+0.31%) and NASDAQ gained by almost 0.28%; US market was primarily supported by energy/oil related shares yesterday tracking bounce in WTI.

US stock future (SPX-500) is now trading around 2462, almost flat (-0.10%) ahead of Draghi today; but there is little probability that ECB statement will mention any QE tapering plan; in that sense Q&A of Draghi will be very interesting today. A less dovish script from Draghi may help EUR to run towards 1.20, which may not be good for EU/global stocks. Technically, 2454-2449 may be the immediate support zone of SPX-500 now and sustaining below it, expect some correction.

Back to home, Indian market (Nifty Fut), after opening in positive tone may look into Asian cues from HK market, which seems to be under some pressure today ahead of EU market opening. Apart from global cues, Indian market may also focus on Govt’s intensifying war on black money/stress cos, stretched valuation amid muted Q1FY18 earnings, NPA resolutions and Govt’s effort of incremental policy reforms.

But, warmongering stance by Indian Army Chief with reference to China & Pak may also affect the overall Indian market sentiment going ahead as now it seems that despite diplomatic success, Ind-China border disputes may take more time to resolve.

BOC (Canada) yesterday hiked quite unexpectedly by 0.25% to bring its rate at 1%; BOC now seems to be in a normalization path and in that scenario, huge fund flow form Canadian sovereign fund into India’s stressed assets may be also under some distress in the coming days as ultra low interest in Canada (0.50%) for decades despite a solid G-7 economy might be a major reason for Canadian investment in India.; but a strong CADINR may also help in this regard.

 SGX-NF