Market Mantra: 06/11/2017 (09:00)
SGX-NF: 10440 (-49)
For the Day: updated at 09:10
Key support for NF:
10415-10390/10360
Key resistance for NF:
10505/10525-10575
Key support for BNF:
25300/25200-25050
Key resistance for BNF:
25800-25950
Trading Idea (Positional):
Technically, NF has to sustain over 10525 area for further rally towards
10575-10625 & 10675-10835 zone in the short term (under bullish case
scenario).
On the flip side, sustaining below 10505 area, NF may fall towards 10415-10390/10360
& 10290-10195 zone in the short term (under bear case scenario).
Technically, BNF has to
sustain over 25800 area for further rally towards 25950-26100 & 26325-26615
zone in the near term (under bullish case scenario).
On the flip side,
sustaining below 25750 area, BNF may fall towards 25400-25300/25200 &
25050-24850 area in the near term (under bear case scenario).
As par early SGX indication, Nifty Fut (Nov) may open around 10440, gap down by almost 49 points
amid subdued global/Asian cues on
Saudi political turmoil and renewed concern about China’s own “Minsky Moment”.
Also, some anti trade remarks by Trump against Japan in his Asia tour calling
US trade with JP is not “fair & open” has caused some sudden JPY selling
spree, helping JP equities to some extent.
On Friday weekend, overall US economic data was mixed; Oct NFP
came as terrible, but it was hurricane distorted and the positive revisions for
the last two months were not too bad either. Also, ISM Non-Mfg PMI & its
employment portion and factory orders came upbeat. Thus, after brief knee-jerk
reaction, USD recovered a bit and US
market also closed almost flat on mixed US economic data & Apple optimism.
In the morning today, China PBOC Gov again warned about an
imminent “Minsky Moment” & too much optimism (“accumulating latent and sudden
complex, hidden, contagious & hazardous risks”) in global markets even as
the overall health of the global financial system appears good.
Clearly PBOC may
be referring at the excessive leverage of not only China’s economy, but may be
also of the global economy/central banks and when China “sneezes”, global
market catch “cold”.
In another unprecedented event on the weekend, Saudi King Salman
has arrested some influential big corporate leaders including Talal, having sizable
stakes in Citigroup, twitter, Apple etc along with several others senior
princes, current & former Govt ministers on the pretext of corruptions, which
may be actually an effort to consolidate power around Salman family for a “smoother
succession”.
This Saudi political turmoil is also boosting Oil and may also
help the country to list Aramco on the NYSE as par Trump’s “vision”. Also,
issues of Lebanese PM’s resignation because of suspected Saudi intervention may
further aggravate relationship between Saudi & Iran and may boost WTI above
$60 in the coming days.
Meanwhile, NK has again warned US by terming Trump as “spiritually
instable” making “reckless remarks” that could bring “nuclear disaster” to the
US mainland.
Overnight, on Friday weekend, US market closed in
positive; DJ-30 edged up by almost 0.10%; S&P-500 gained by 0.31% to close
at 2588, while NQ-100 rallied by almost 0.74% on strength of Apple amid long
snake lines of buyers in various Apple stores across Asia & EU for its
latest i-Phone model (X8) apart from upbeat Q3 results & guidance.
Apart from Apple, US market was helped by Valeant Pharma (+3.9%
on new product approval by US FDA), Starbucks (+2.1%, on deleverage new despite
below estimate result), while dragged by Pandora (slumped by around 25% on
terrible Q3 earnings) and Sotheby (plunged by over 3% on muted report card).
US stock future (SPX-500) is now trading around 2580, almost flat (-0.08%) on
muted global/Asian cues ahead of EU market opening.
EU market closed with modest gains on Friday amid lower EUR and
mixed/muted earnings; Stoxx-600 edged up by almost 0.3%; DAX-30 gained by 0.3%,
while FTSE-100 was almost flat (+0.10%) as GBP edged up.
Muted report card from French Bank Societe Generale and Dutch
Telecom (Altice) has affected the sectors, limiting the overall gain. IBEX-35
slumped by around 1% on plunge of Spanish banks amid renewed Catalan tensions. Overall,
still US & EU markets are being supported by decent earnings growth in Q3
so far in this “goldilocks” rally.
Indian Market May Focus On GST Simplification
& Any Other Stimulus (Trader’s Tax Relief) On DeMo Day:
Back to home, Indian
market (Nifty Fut/India-50) is now trading around 10470, edged down by
almost 0.16% ahead of EU market opening,
which is indicating for a muted start amid subdued global cues, renewed EU political
jitters (Catalonia/German coalition Govt formation) and drops in EUR, helpful
for export savvy EU market.
Indian market may focus on further GST simplifications in the
ongoing “trial & error” mechanism; as par reports high tax of 28% on a
number of products used for “daily life by middle class people” may be reduced
to 18% and Govt/NAMO may also announce certain “tax relief” measures for the
traders/MEME on the DeMo day (8th Nov). Govt may also intensify its
current “war on corruption” on the same “anti black money” day.
Although it may be a big relief if the GST system goes for simplification,
the frequent changes in taxation slabs may be another post-GST disruptions as manufacturers
& distributors will be compelled to keep minimal inventories.
Thus, story
of de-stocking may again affect earnings for Q3 & Q4 and eventually FY-18
earnings may also come muted. These frequent changes in taxation rates &
GSTN network issue may be indicating overall lack of preparedness in launching GST
hurriedly
All eyes may now on the lists of “who’s who” in the latest
Panama money laundering fiasco, as almost 718 names of prominent Indian
politicians, businessman & celebrities may be there apart from global
figures.
India’s NCLT/IBC rules may have to also tweak in the coming days
to prevent errant/defaulters promoters to regain their control over their cos
by bidding directly/indirectly under resolution plan (back door entry). As par
reports, Govt may issue Rs.0.70 tln recap bonds in FY-18 for selective PSBS
having met certain conditions.
Also, market may focus on Oil as above $60 WTI or above $65 in
Brent may cause significant headwinds for the Indian economy.
SGX-NF
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