Market Mantra: 24/10/2017 (09:00)
SGX-NF: 10195 (-1)
For the Day: updated at 11:25
Key support for NF: 10150-10100
Key resistance for NF: 10275-10325
Key support for BNF: 24000-23850
Key resistance for BNF: 24200-24400
Hints for positional trading:
Technicals indicate that, NF has to sustain over 10275 area for
further rally towards 10325- 10380 & 10455-10495 area in the short term
(under bullish case scenario).
On the flip side, sustaining below 10255 area, NF may fall
towards 10190-10150 & 10100 & 10040 area in the short term (under bear
case scenario).
Similarly, BNF has to sustain over 24200 area for further rally
towards 24400-24600 & 24875-25050 area in the near term (under bullish case
scenario).
On the flip side, sustaining below 24150 area, BNF may fall
towards 24000-23850 & 23600-23400 area in the near term (under bear case
scenario).
As par early SGX indication, Nifty Fut (Oct) may open around 10195, almost flat on muted global cues amid mixed corporate earnings
and ongoing suspense about next Fed leadership.
Trump is supposed to announce the next Fed leadership “very very
soon” and both Taylor & Warsh may be inducted into Fed as Chair & VC; USD drops a bit, while EUR recovered some lost ground
yesterday ahead of official announcement of ECB QE tapering on day after
tomorrow. A lower USD is generally not supportive for export heavy Asian &
EU market.
Apart from Fed leadership, market may be also focused on China
leadership for any further policy guidance after concern of “Minsky Moment”.
Overnight US market dropped on concern of earnings & Fed leadership uncertainty
related risk aversion flows despite hopes of US tax reform, although with
little clarity. Trump agreed to retain the existing tax breaks under 401(k) rule
without any capping as speculated earlier; as par Trump, “this is a great &
popular middle class tax break that works”. This may be negative for US
consumption as it will encourage middle class savings under 401(k) plan.
Market is waiting for earnings deluge; so far around 20% of
S&P cos has reported their earnings and out of that almost 4.5% has beaten
the street estimates as par long term trend; overall market is expecting an EPS
growth of around 8% for S&P-500 in Q3. But flurry of downbeat corporate
updates may have also affected the market sentiment yesterday. GE slumped by
almost 6.3% on analyst downgrade after poor Q3 report card despite pledge of
deleveraging by the co.
DJ-30 sank by almost 0.23% and closed around 23274; S&P-500 dropped by almost 0.40% to
close around 2465, while NQ-100
slumped by 0.6%.Overall, US market was dragged by techs, industrials, energies &
consumer related (toy makers), while helped by Seagate (upbeat earnings), Tesla
(buzz of a e-car factory in China) & Cisco (buzz of M&A) yesterday.
US stock future (SPX-500) is now trading around 2565, almost flat (+0.05%). Technically, it now needs to sustain
above 2560-2550 area; otherwise 2529-2505 may come soon; for any rally from
here, SPX-500 has to sustain above 2580-2595 area for 2620 zone.
USDJPY is now trading around 113.35, edged down by almost 0.07% in thin
Asian session trading amid Fed chair uncertainty. As part latest report, Warsh
has met with the US VP few days ago on the same day, when Trump has interviewed
Yellen; if Warsh is ultimately nominated as Fed Chair, he may be little dovish for
USD than Taylor, who will get the VC post.
Blackrock has downgraded US credit yesterday to neutral from
overweight as outlook has become “less compelling” lately. Japan also sounds
alarm on “unprecedented, critical & imminent” threat from NK yesterday,
soon after landslide Abe win; although market is calm so far till NK fires
another ICBM over JP or tests another Nuke, USD is certainly a victim of NK
war-mongering. Japan is also set to increase its defense/military spending
multifold to “confront NK rhetoric” and stimulate its economy.
Technically, USDJPY now need to sustain above 113.75 area for any bounce
back till 114.30-114.65; otherwise sustaining below 113.45-113.25 zone, it may
further fall towards 112.90-112.15 & 111.70-111.30 zone in the coming days.
EURUSD is now trading around 1.1761, edged up by almost 0.10% and off
the low of 1.1725 mapped yesterday on Catalan tensions; it recovered to some
extent from that support area ahead of ECB meet on Thursday. Draghi is supposed
to outline ECB QE tapering plan by announcing reduction in QE bond buying from
60 bln EUR to 30-20 bln EUR/pm for another 6-8 or even 12 months.
Depending upon the actual QE tapering plan (quantity &
duration), market will term it as dovish or hawkish and EUR will move
accordingly; any extension above 6-8 months may be sees as dovish QE tapering
by ECB this time.
Technically, for EURUSD, 1.1715-1.1690 may be an immediate support zone and sustaining
below 1.16645-1.16510 & 1.15190-1.13140 may come; otherwise sustaining
above 1.17870-1.17950, it may again rally towards 1.18733-1.19025 &
1.20925-1.20700 area in the coming days.
Back to home, Indian
market (Nifty-Fut/India-50) is now trading around 10220, up by almost 0.30%
after opening almost flat at 10203; so far it made a high of 10244 & low of
10189 and basically consolidating ahead of EU market opening, earnings deluge ahead
of exp on Thursday.
So far Q2FY18 earnings are mixed, but stable although it may be
not so much upbeat to justify the stretched valuations. Thus market may be
cautious amid slowing GDP growth and subdued guidance, while expectations are
very high.
Metals are upbeat today as iron ore prices rebounded coupled
with illegal production clampdown in China on winter pollution concern.
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