Market Mantra: 21/09/2017 (09:00)
SGX-NF: 10140 (-29)
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:
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 10150/10130-10090 & 10050-10000/9970 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 & 24650-24500 area in the near term (under bear case
scenario).
As par early SGX
indication, Nifty Fut (Sep) may open around 10140, down by almost 29 points
tracking mixed global cues after hawkish hold by Fed yesterday. As par
expectations, Fed will start its BS tapering from Oct’17 onwards @10 bln/pm and
hold the rate for the time being; but it forecasted a stronger dot-plot for the
Dec’17 rate hike probability with three more hikes in 2018 and two hikes in
2019.
Higher dot-plots for Dec’17
rate hike coupled with Yellen’s hawkish stance yesterday shrugging off the economic
damage of US hurricanes, subdued inflation has caught the market on wrong foot
and USD soared; basically Yellen looks & sounds more hawkish than market
expected.
Fed Chair also termed the
persistent lower inflation in US despite a tight labour market & decent
wage growth as “Mistry” and also acknowledged indirectly about the theory of
automation, globalization & other structural issues for the subdued US
inflation. Thus, Fed has no issue in joining the global chorus of QT (Quantitative
Tightening) and thus Asian market may be nervous for this Fed/global central
banks deleveraging, although a higher USD may be good for the export heavy
Asian & EU markets.
But after Fed turned
unusually hawkish, market may be now also convinced that it’s now really a
matter of time, ECB will also join the global QT bandwagon and announce a
definitive QE tapering plan next month; a lower EUR because of hawkish Yellen
yesterday may also provide Draghi a much needed space to announce the
inevitable ECB monetary policy normalization. FFR is now showing around 65%
probability of a Dec’17 rate hike move against 45% prior to Fed meet yesterday.
Overnight US market edged
higher after initial slump on the back of financials as higher USD/US bond
yields are favourable for their business model, although a higher USD may not
be good for the overall US market, for their export earnings & the
perception of higher imported inflation. Techs/FANG stocks dragged the market
coupled with utilities, consumer staples, & other rate sensitive sectors.
Apple also dragged the US
market yesterday on disappointing i-Phone8 pew-booking numbers and some
technical issues with the new models & i-Watch. DJ-30 closed almost 0.19%
higher, while S&P-500 was almost flat (+0.06%) and tech heavy NASDAQ
dropped by 0.08%.
US Stock Fut (SPX-500) is
now trading around 2506, almost unchanged on mixed global/Asian cues after a
hawkish script by Yellen yesterday.
Back to home, Indian market (Nifty-Fut) after opening
down has gone further lower to around 10072 till now on concern of a hawkish
Fed; although a higher USD may be good for the export heavy Nifty index
(Pharma, IT), it may be not good for the overall Indian economy, being an
import oriented country.
Also, a higher USD may
not be a good news for the Indian corporates’ BS/debt profile as they have
taken heavy debt from various external/foreign sources; it may not be a good
news for banks/RBI also as further rate cuts hopes may be diminished in the
face of hawkish Fed. A global QT may be also a bad news for the overall FPIS
& also FDI inflows for India.
SGX-NF
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