Market Mantra: 23/11/2017 (09:00)
SGX-NF: 10362 (+2)
For the Day: updated: 12:30
Key support for NF: 10340/10310-10270/10180
Key resistance for NF:
10395/10415-10460
Key support for BNF:
25700-25500
Key resistance for BNF:
26000-26100
Trading Idea (Positional):
Technically, Nifty
Fut-Nov (NF) has to sustain over 10415
area for further rally towards 10460- 10500/10535 & 10575-10675 zone in the
short term (under bullish case scenario).
On the flip side, sustaining below 10395 area, NF may fall towards 10340/10315-10270
& 10190-10150 zone in the short term (under bear case scenario).
Technically, Bank Nifty-Fut (BNF) has to sustain over 26000 area for further rally towards
26100-26325 & 26400-26675 zone in the near term (under bullish case
scenario).
On the flip side,
sustaining below 25950-25800 area, BNF may fall towards 25700-25500 &
25350-25150 area in the near term (under bear case scenario).
Indian market (Nifty Fut/India-50) today closed
around 10360, edged up by almost 8 points (+0.08%) after making an opening
session high OF 10388 and mid day low of 10321.
As par early SGX indication, Nifty Fut (Nov) may open around 10362, almost unchanged on subdued global/Asian cues in a
holiday thinned market after USD plunged
on dovish FOMC minutes yesterday coupled with overall suspense about US corp
tax cut; a lower USD is not good for export heavy Asian & EU markets,
although it may be good for US market.
USD plunged yesterday after FOMC minutes revealed that many US
policymakers are puzzled about subdued nature of US inflation and thus they are
not only apprehended about multiple rate hikes in 2018, but also concerned
about any adverse effect of coming rate hike in Dec’17!! Thus, credibility of
Fed’2018 dot-plots for 3-4 rate hikes are now really in doubt as Powell may
also employ the “wait & watch” policy.
FOMC minutes: Many saw 'near-term' hike as warranted but 'a few' opposed on
weak inflation outlook; Meeting included broad inflation debate; A few
participants said rate hike should be delayed until data showed inflation was
clearly on a path to 2%; "Many participants" observed that weak
inflation could prove persistent and may reflect drop in inflation expectations”.
FOMC-“Some worried Fed could undercut inflation expectations by
hiking with inflation below target; 'A couple' participants discussed
alternative frameworks for inflation, like price-level targeting; Most
participants continue to believe tighter labor market will ultimately lead to
inflation; Many said employment is at or close to full employment”.
FOMC- “Almost All Officials Reaffirmed Their Support For Rate
Hikes To Be Gradual; Several Officials See N-Term Hike Being Data Dependent; Several
Officials Note Concern On Low Infl. Expectations, Possible Fin. Imbalances”.
In brief, Fed may be go for a “dovish hike” (one & off) next
month (Dec) and after that, they may go for a long pause to assess overall
trajectory of US economy, wage pressure & inflation; Fed has already hiked
3 times in 2017 (with expected hike in Dec) and thus USD plunged coupled with
muted US economic data released yesterday.
Overnight US market edged down on a holiday thinned Thanksgiving trade on “risk-off”
mode amid plunge in USD and concern over US policy paralysis & political
jitters; it was further dragged by techs on over 7% plunge in HP on sudden
resignation of CEO. DJ-30 fell by 0.27%, S&P-500 edged down by 0.08% and closed
around 2597, while NQ-100 edged up by 0.07%; Apple & Verizon (Telecom
sector) helped.
US
market/S&P-500 on Tuesday rallied to a new record high of 2600 and closed
higher on optimism about US economic outlook
that prompted GS to raise its 2018 target for S&P-500 to 2850 from 2500
earlier, citing an expansion in both EPS and PE; presently S&P-500 is
trading around 20 PE of reported (TTM) EPS.
US stock future (SPX-500) is now trading around 2594, almost unchanged on muted
Asian cues amid lower USD today amid a light day trading.
Overnight EU market fell by around 0.30% in Stoxx-600, dragged by exporters (higher EUR), travel & tourism
stocks (Thomas Cook guidance warning amid intense competition on Spanish
market), telecom & media while helped by energies (higher oil) to some
extent; DAX-30 lost 1.2%, CAC-40 slumped by 0.3%.
FTSE-100 edged up by around 0.10%, dragged by exporters/MNC (higher GBP), travelers, home builders
(Govt’s plan to push affordable housing & land banking unfavorable for
property developers despite waive off of stamp duty for 1st time UK
home buyers ). UK market was yesterday helped by energies, miners; RBS surged
by 1.4% on Govt’s plan to re-privatize it by 2019 after bailing it out amid
2008 GFC.
EU stock futures are no indicating for a lower opening today on
higher EUR & GBP; market will also focus on German President’s effort to
convince the regional parties/FDP to forge a “Jamaican” coalition Govt with
Merkel to avoid an election again.
Indian Market May Focus On Further IBC & GST
Reform And Surging Oil:
Back to home, Indian
market (Nifty/India-50) is no0w trading around 10370, edged up by almost
0.10% tracking subdued global/Asian cues on renewed concern about China
deleveraging; looking ahead, market may focus on PSBS recaps, IBC/NPA
resolution process, GST reform (simplification), GJ election and buzz of
further reform in IT/direct tax.
Market may be also concerned about higher oil, now hovering
around almost $65 in Brent; but a dovish Fed may be also helpful for Indian
macros, although it may be bad for Nifty earnings as almost 60% is dependent on
export income.
So far, Moody’s India upgrade failed to translate any meaningful
push back of Indian bond yields as rating agencies are traditionally always behind
the curve; generally Investors will not wait for rating action for their
investment into a country as they will guide by macro policy of the
Govt/central bank.
India is attracting huge FDI much before rating action of
Moody’s because of it power of Modinomics & political stability in the
country. Looking ahead, earnings (EPS & PE) will guide the market instead of
ratings.
SGX-NF
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