Indian Market May Focus On Further Fine Prints Of
PSBS Recaps & Earnings Deluge:
Market Mantra: 26/10/2017 (09:00)
SGX-NF: 10270 (-20)
For the Day: updated at 11:15
Key support for NF: 10270-10215/10150
Key resistance for NF: 10325-10380/10430
Key support for BNF: 24850-24500
Key resistance for BNF: 25100-25250
Hints for positional trading: (NF/NS & BNF/BNS)
Technicals indicate that, NF has to sustain over 10325 area for
further rally towards 10360/10380-10430 & 10505-10600 area in the short
term (under bullish case scenario).
On the flip side, sustaining below 10305 area, NF may fall
towards 10270/10240-10215/10180 & 10150-10040 area in the short term (under
bear case scenario).
Similarly, BNF has to sustain over 25100 area for further rally
towards 25250-25500 & 25600-25775 area in the near term (under bullish case
scenario).
On the flip side, sustaining below 25050 area, BNF may fall
towards 24850-24500 & 24300-24000 area in the near term (under bear case
scenario).
As par early SGX indication, Nifty Fut (Oct) may open around 10270, edged down by around 20
points on muted global cues tracking
some subdued US corporate earnings, renewed uncertainty over Fed Chair & US
tax reform. As par some reports, Trump may not announce this week his
nomination for next Fed Chair in the form of Taylor, a known hawk and it now
seems that he may extend Yellen as Fed chief for another term, bringing either
Taylor or Powell as VC.
Basically, Trump now wants someone less hawkish or dovish as
next Fed Chair like Yellen; but Yellen’s known political stance (liberal
democrat & close to Obama) may be the biggest headwind for Trump right now;
although DNC may support his effort to keep Yellen for another term to ensure
that USD does not break the barrier of 115 for the interest of US economy.
Overall US economic data released yesterday was quite upbeat
despite some hurricane distortion, but despite that USD dropped as prospect of a hawkish Fed leader diminished coupled
with renewed uncertainty about passage of US tax reform amid increasing
political spats between Trump & some of his own RNC GOP members/senators.
USD was also under pressure on muted earnings from some leading
US corporates and subsequent plunge in US stock market along with renewed NK
rhetoric, indicating that Kim may be preparing for a Nuke test with an ICBM in
the pacific as warned earlier!!
Overnight US market closed in negative on barrage of muted corporate earnings &
guidance and higher US bond yields (2.475%), tracking upbeat economic data; DJ-30 slumped by almost 0.48%, most in
the last seven weeks; S&P-500
also fell 0.47% and closed around 2557; NQ-100
corrected by almost 0.52%.
But US market pared losses significantly after some fall in US
bond yields tracking Trump’s comment that he is still considering keeping
Yellen in the Fed chair post. Also, Trump is now open to negotiate the tax
saving retirement program 401(K) contrary to his earlier position few days ago;
although it may again open the door for further debates over US tax reform and
not benefit the real street, it may be good for the Wall Street. Overall, lower
US bond yields/ USD/Fed rates are beneficial for the US stock market.
Subdued earnings & guidance from some big names like
AT&T (-3.9%), Chipotle Mexican Grill (-14.6%), AMD (-13.5%), Boeing (-2.8%)
dragged the market yesterday despite overall report card till day may be quite
upbeat. As valuations are quite stretched as par US standards, market may be scrutinizing
every earning to justify the lofty valuation. All the eleven sectors were in
red with telecoms & industrials led the decline yesterday, while Tesla
helped the market to some extent.
US stock future (SPX-500) is now trading around 2557, edged down by around 0.10% before
EU market get opens; market will now focus on Draghi for ECB QE tapering plan.
EU stocks also dropped yesterday on higher EUR & GBP coupled with
subdued report card from some corporates.
Back to home, Indian
market (Nifty-Fut/India-50) is now trading around 10290, almost unchanged
after opening little lower on muted global cues. Market will now focus on fine
prints of PSBS recaps and lofty valuation after yesterday’s epic rally.
Govt will also focus on further PSBS consolidation and may bring
it to 5-6 large PSB with an immediate cut to holdings to an average 52%.
Eventually, barring 3-4 PSBS, Govt may divest all the others to private
investors/banks after expected strengthening of the B/S.
Market will also focus on deluge of earnings, which is so far
termed as mixed, yet stable but may not justify the stretched valuation.
No comments:
Post a Comment