Market Mantra: 27/12/2017 (09:00)
SGX-NF: 10525 (-5)
For the Day: updated: 13:25
For 27/12/2017: Dec-Fut
Key support for NF:
10490/10465-10425/10375
Key resistance for NF:
10555/10575-10610/10650
Key support for BNF:
25600/25400-25200/24950
Key resistance for BNF:
25775/25875-26050/26200
Trading Idea (Positional):
Technically, Nifty Fut-Dec (NF) has to sustain over 10575 area for further
rally towards 10610/10650- 10695 & 10745-10795 zone in the short term
(under bullish case scenario).
On the flip side, sustaining below 10555 area, NF may fall towards
10490/10465-10425/10375 zone in the short term (under bear case scenario).
Technically, Bank Nifty-Fut (BNF) has to sustain over 25775 area for further
rally towards 25875- 26050 & 26200-26325 zone in the near term (under
bullish case scenario).
On the flip side, sustaining below 25725-25675 area, BNF may fall towards
25600/25400-25200/24950 & 24850-24700 area in the near term (under bear
case scenario).
As par early SGX indication, Indian market (Nifty Fut-Dec/India-50) may open around 10525, almost
flat on subdued Global/Asian cues
and concern about fiscal slippages amid higher Oil & muted GST revenue.
Overnight, US market edged down in a holiday
thinned trading on slide in techs/Apple (poor X-Mas sales & guidance cut
for Q1CY18 for i-Phone-10) offsetting some gains in energies (higher oil after
Libyan pipeline blast) and retailers (blockbuster X-Mas/holiday sales:+4.9% vs
3.7% YOY); DJ-30 edged down by 0.03%, S&P-500 lost 0.10% and closed around
2680, while NQ-100 fell by 0.30%.
Overall, sentiment was also supported by an upbeat
home price index (S&P-Case-Shiller: +6.4% in Oct) and optimism about US
fiscal stimulus/Trumponomics (tax cuts/reform/deregulation & infra
spending).
US index future (SPX-500) is now trading around
2688, edged up by almost 0.03% on mixed Asian cues.
USDJPY edged down on continuous bond yield curve
flattening and doubt about credibility of Fed’s 2018 projections for 3 hikes
amid muted US wage growth & inflation. Also, growing geo-political tensions
between US & Russia for the NK issues may be a headwind for USD; yesterday Russia
tests a “powerful” ICBM, which is supposed to evade any missile defense system.
But EURUSD caught a bid despite growing EU political
jitters (Catalonia/Spain, German coalition Govt, Italian election) as market
may be focusing on EZ economic optimism and increasing talks about policy
normalization (rate hikes) by ECB in 2019 as full QE tapering may be now a done
deal by Dec’18. Also, positive year end flows may be supporting both EUR &
GBP.
EU stocks set to open in red on higher EUR,
negative for export heavy EZ economy & the market but higher energies (oil)
and metals (shut down of a major China factory for pollution concern &
China growth optimism) may also support the market.
Most of the Asia-Pacific markets are now trading
in red to flat despite commodities/resource rally and some recovery in
techs/Apple suppliers. China (SSE) down by almost 0.92% on signs of liquidity
stress (SIBOR at 4.93%) & economic slowdown (year end liquidity stress)
coupled with muted industrial profits and subdued wages & hiring activities
as par China Beige Book.
Similarly HK also edged down (-0.10%) on China
concern & tight liquidity; but helped by energies, while dragged by techs
to some extent. Japan edged up by 0.08% in a listless day of trading after
initial fall.
Back to home, Indian
market (Nifty Fut-Dec/India-50) is now trading around 10545, edged up by
almost 0.18% after making another record high for Nifty Fut-I (10554) & Nifty-50
(Spot @10548) on telecom debt resolution optimism (R-COM) & an extended “Santa
Rally” and year end (CY) fund flows/portfolios adjustments.
But ongoing rally in Oil and muted GST revenue may
spoil the “Santa Party” as market is worried about fiscal slippages; today
Indian 10YGSEC bond yield hits another milestone high at 7.310% and is now
trading around 7.26%; USDINR-I is now trading around 64.32 (+0.05%).
As par Govt, estimate tax revenue to fall short of
FY-18 aim by up to Rs.0.55 tln; estimate direct tax revenue to fall short by
Rs.0.20 tln. Multiple reports warn of a moderate slowdown in the economy; India's
industrial production could slowdown over the next couple of months as biz
optimism in the country is at a 4 year low.
Meanwhile, Banks said that, they need to make 15%
provisions in Q3FY18 for exposure at R-COM 2 QTRS of provisions to be made by
the banks; the most impacted bank will be UCO Bank & UBI. The least
effected will be SBI, IOB, OBC & UNB.
All eyes may be also now on the Budget
preparations for FY-19, which will be the last full fledged budget by the Govt
before going into 2019 poll.
SGX-NF
USDJPY
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