Market Mantra: 13/12/2017 (09:00)
SGX-NF: 10230 (-35)
For the Day: updated: 13:30
For 13/12/2017: Dec-Fut
Key support for NF:
10215/10190-10150
Key resistance for NF:
10285/10305-10355/10375
Key support for BNF:
25100-24950/24800
Key resistance for BNF:
25350-25500/25775
Trading Idea (Positional):
Technically, Nifty Fut-Dec (NF) has to sustain over 10375 area for further
rally towards 10395/10425 -10475 & 10510/10535-10575 zone in the short term
(under bullish case scenario).
On the flip side, sustaining below 10355 area, NF may fall towards 10305/10285-10245/10215
& 10190 /10150-10100 zone in the short term (under bear case scenario).
Technically, Bank Nifty-Fut (BNF) has to sustain over 25350 area for further
rally towards 25500-25775 & 25875-26050 zone in the near term (under
bullish case scenario).
On the flip side, sustaining below 25300 area, BNF may fall towards 25200/25100-24950/24800
& 24650-24350 area in the near term (under bear case scenario).
As par early SGX indication, Nifty Fut (Dec) may open around 10230, gap down by almost 35 points
on mixed Global/Asian cues and muted sets of macro data released yesterday
(higher core inflation & lower IIP); but some drop in Brent Oil from $65
level may also help the Indian market to some extent ahead of Fed & GJ
election outcome along with some rebounds in key regional market (China &
HK) due to US tax reform optimism.
USD dropped in the Asian session today after an unexpected win
by DNC in a key Alabama seat after an intense fight; this win by DNC may change
the equation of US Senate little tough for Trump to pass his legislative agenda
including the tax reform bill as the new math will be 51-49 in favour of RNC vs
earlier 52-48.
The Alabama seat was a RNC stronghold since last 25 years and
thus a defeat in this seat may be politically bad news for Trump, where some of
his own RNC Senators are now voicing opposition for various aspects of the tax
bill. Trump’s own approval rate & popularity among US public is now also on
the downside for various reasons.
Yesterday, USD got some strength in the early NY session on an
upbeat PPI data coupled with buzz of an imminent tax cut deal (tentative) ahead
of the schedule date of 22nd Dec; but USD later drifted lower on
another tweet from an influential deficit hawk RNC Senator (Rand Paul),
expressing his intention to vote against the tax bill on higher US fiscal
deficits.
Later, the committee of US tax reform has floated some details
of the final bill as a “trial balloon”, which indicates “corporate tax 21% from
20% starting in 2018; top individual rate down to 37%; the mortgage interest
deduction would go to loans up to $750K; pass through deduction at 20%”.
Market may be optimistic that whatever be the US corp tax cut,
be it 20/21/22%, it will be effective from 2018 itself without any gradual
effect contrary to earlier Senate plan of 2019 implementation or gradual
implementation from 2018. A definitive tax plan may be also important for Fed
today in its dot-plot projections for 2018 (2-3 hikes); today Fed is expected
to be on a “dovish hike” stance on muted US wage growth & inflation.
Overnight US stock market closed mixed; while DJ-30 rose by
0.50% and S&P-500 added 0.20% (2664), NQ-100 fell by 0.20%; Boeing jumped
on higher dividends & buy back boost.
Overall market was helped by banks & financials (higher US
bond yields, favourable for their business model, banking deregulation &
tax reform optimism), media & telecoms (mix corp news); but it was dragged
by utilities, techs, semi-conductors & energies (drops in oil after muted
demand forecast by EIA for 2018 & buzz that the fractured Forties oil pipeline
may be restored soon on Govt intervention).
US index future (SPX-500) is now trading around 2664, edged down
by almost 0.12% on mixed Asian cues and defeat of RNC in the Alabama poll.
Technically SPX-500 now has to sustain over 2675 zone for a Santa Rally towards
2710-2720 in the coming days; otherwise it may fall.
Asian market rebounds from earlier weakness led by China (SSE: +0.70%)
& HK (HKG-33: +1.30%) on optimism about banks amid higher US bond yields
& tax reform; but techs & insurers are dragging. China sentiment was
also improved by PBOC net injection of 60 bln Yuan today and 10Y bond yields
also fell below 4%. China market is watching any regulatory action to delay the
wealth management products regulation implementation and a state conference
over new policy frameworks.
Asian market sentiment was also helped by postponement of joint
US-SK war game in Korean peninsula amid winter Olympic Games and brightening
prospect of a NK-US negotiation. Tourism/Airlines stocks rebound; China market
was also helped by consumers & transporters.
Japan (Nikkei-225) closed in red (-0.47%) on exporters (higher
Yen), energies, mixed techs, while helped by banks & financials and
automakers.
Australia (ASX-200) edged up (+0.10%) on mixed energies (oil
recovered some loss on better than expected drawdown API report for Crude),
retailers (M&A news) but dragged by utilities & gold miners.
EU market is also expected to open almost flat to negative on
lower USD ahead of Fed today.
Back to home, Indian
market (Nifty-Fut/India-50) is now trading around 10320, surged by almost
0.55% and well off the opening session low of 10220, mirroring rebound in
regional market (HK & China); it has made a day high of 10333 so far; drops
of Brent from $65 may be also helping.
But overall market sentiment may be choppy ahead of Fed &
ECB and GJ election exit poll by tomorrow evening. As par reports, Indian 2-W
sales slows down significantly despite huge discounts being offered by the Auto
cos to woo customers, especially from rural area. This may be another spillover
effect of DeMo & un/under employment problem across India.
Market may be also concerned about renewed surged in Indian bond
yields, hovering around 7.25% after higher core CPI, which is consistently
sticky and pointing towards GST led price distortions. Oil may be also in a
tight supply position after OPEC deal despite increasing US productions; if
Brent sustains above $65, then Indian economy & market outlook may be reviewed.
SGX-NF
SPX-500
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