Market Mantra: 21/11/2017 (09:00)
SGX-NF: 10345 (+27)
For the Day: updated: 09:10
Key support for NF:
10290/10250-10215/10190
Key resistance for NF: 10390/10410-10460
Key support for BNF:
25700-25500
Key resistance for BNF:
26000-26100
Trading Idea (Positional):
Technically, Nifty
Fut-Nov (NF) has to sustain over
10410 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 10390 area, NF may fall towards 10290-10250
& 10215/10190-10150 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 area, BNF may fall towards 25700-25550 & 25400-25200
area in the near term (under bear case scenario).
As par early SGX indication, Nifty Fut (Nov) may open around 10345, gap-up by almost 27 points
on positive global/Asian cues on higher
USD overnight and upbeat techs (Tencent mega rally in HK). EUR is slumped
on German political squabbling and that may also help the export savvy EU
market to some extent, although political troubles for Merkel is getting
serious day-by-day as Germany may be going for a fresh mandate.
USD edged up higher yesterday on risk aversion mode (?) amid ongoing
EU/German political jitters coupled with an upbeat leading economic index data
(+1.2%) and news that Yellen will quit from Fed board completely as she will
not stay as Fed governor after her Fed chair term ends. Yellen has an option to
stay in Fed as a Fed governor until 2024. Yellen commented that she is “gratified”
by the progress of US economy, since she took charges and promised a smooth
transition to Powell.
Previously, there was some assumption that if Yellen stays in
Fed board, Trump may have some difficulties to reorganize the FOMC/Fed board as
par his “vision” and thus removal of Yellen completely from Fed may be seen as
hawkish or less dovish at least. Looking ahead, in this truncated week, market
may focus on FOMC minutes as there is little economic data or tax reform
headlines amid Thanksgiving holidays. US bond yields were also higher as next
Fed hike is imminent on 13th Dec.
Although, US (Trump) has designated NK as a “state sponsor” of
terrorism, cyber attacks etc with additional sanctions to come against the already
isolated nation and who do business with it, the move is being seen as more “symbolic”
than practical; but it may also instigate Kim to take some kind of “revenge”
after nearly two months of unusual silence (before storm?) and may also
destabilize the China effort to bring NK on the table for a diplomatic
resolution.
As par SK, their neighbor (NK) may be now working hard on the
Nuke enabled ICBM & submarine techs, capable to hit US mainland. Thus, USD
will be at the mercy of “war of words” between Kim & Trump in the foreseeable
future and dilemma over military actions & economic sanctions.
Overnight US market closed in
positive on economic growth optimism after an upbeat leading index indicator
coupled with boost from telecoms (Verizon upgrade) techs & chipmakers
(M&A deal) financials & industrials and consumer staples (Thanksgiving
Turkey dinner); DJ-30 rose by almost 0.31%, S&P-500 edged up by almost
0.13% and NQ-100 added around 0.12%.
But overall market mood was also soured after US DOJ sued
AT&T to prevent it from buying Time Warner; market may be concerned over
credibility of US justice system, being a soft target of Trump’s whims &
fancy as Trump was publicly against the Time Warner group.
Healthcare stocks also dragged the US market yesterday amid 2%
drop in Merck & 0.8% fall in Bristol after successful trial results of a
anti-cancer drug by rival Roche. Cardinal slumped by 4.4% after analyst
downgrade. Delphi auto climbed 3.5% on analyst upgrade. Alibaba rose 1.6% on
M&A deal.
Overall, although US market is being supported by decent Q3
earnings growth, market may be also concerned about corp tax cut suspense,
flattening of US Yield curve and potentially higher US borrowing costs. But
market may be also confident about synchronized global recovery & growth;
yesterday BUBA (German central bank) said that German economy is expanding
rapidly & firing all its cylinders and firms are struggling to find enough
workers to honour the order book.
US stock future (SPX-500) is now trading around 2580, almost flat (-0.05%)
ahead of EU market opening, which is
also poised to open almost unchanged amid lower EUR & German political
tensions.
Back to home, Indian
market (Nifty/India-50) is now trading around 10375, up by almost 0.54%
tracking positive global cues and a 1.40% rally in HK market following techs
optimism. Indian market may also focus on further GST reform & recalibrations
to simplify the overall regime.
Market may also focus on PSBS recaps mechanism; but going by
some estimates, the current amount of recaps of Rs.2.11 tln may be still inadequate
for any true revival in corporate lending considering increased requirements of
BASEL-III norms, much higher NPA haircuts (NCLT/IBC), and increased NPA
provisions for Ind-AS accounting; there may be little left for any incremental
future credit growth.
Although, there is virtually no probability of a RBI cut this
time on 6th Dec, market may focus on RBI statement after Moody’s
Santa gift to Modi; but other rating agencies also need to support Moody’s
rating action for any RBI action.
Looking ahead, Q2 GDP number will be vital not only for the
market but also for the Govt ahead of GJ election, which may be another acid
test for NAMO after DeMo & GST blues despite his soaring popularity.
SGX-NF
No comments:
Post a Comment