Market Mantra: 04/12/2017 (09:00)
SGX-NF: 10165 (+21)
For the Day: updated:12:45
For 04/12/2017: Dec-Fut
Key support for NF:
10120/10090-10050/10015
Key resistance for NF: 10185-10225/10300
Key support for BNF:
25200/25100-24950/24700
Key resistance for BNF:
25600/25750-25875/26050
Trading Idea (Positional):
Technically, Nifty Fut-Dec (NF) has to sustain over 10225 area for further
rally towards 10300-10350& 10425-10475 zone in the short term (under
bullish case scenario).
On the flip side, sustaining below 10205-10185 area, NF may fall towards
10120-10090/10050 & 10015-9970 zone in the short term (under bear case
scenario).
Technically, Bank Nifty-Fut (BNF/BNS) has to sustain over 25600 area for
further rally towards 25750-25875 & 26050-26200 zone in the near term
(under bullish case scenario).
On the flip side, sustaining below 25550 area, BNF may fall towards 25400-25200
& 24950-24700 area in the near term (under bear case scenario).
As par early SGX indication, Nifty Fut (Dec) may open around 10165, edged up on mixed global/Asian cues and hopes of an
imminent rate cut by RBI day after tomorrow.
US future is up by almost 0.56% on US tax reform optimism after
Senate passed its version of the tax plan by 51-49 as highly expected (52-48) on
the late weekend; one RNC rebellion voted against it along with all the DNC as
par party line.
Overall reaction from Asian market for the US tax reform plan passage
in the US Senate on late weekend is quite muted amid intense US political
uncertainty and pressure on energies & techs to some extent despite higher
USD.
Senate passage is just another forwarding step; now the most contentious
issue is reconciliation of the two versions of tax plan put forward by US Senate
& RNC/Congress and after that it will be ready for Trump’s signature to
make it a law.
Market is not sure about the ultimate fate of US corp tax cut
structure & deficit financing issue; if corp tax cut is implemented from
2018 without any gradual effect, then it will be more positive for the US
market, otherwise will be disappointed.
Market is also concerned about Flynn fiasco; although the
present plea may be related to request for Russian help to veto out a Israel
issue in the UN rather than any link to US election, market is worried that in
future Flynn may disclose more serious information regarding Trump & his
inner circle with Russian link.
Overnight on Friday weekend, US market closed in negative amid
Flynn “shocker” and tax reform optimism; it plunged on reports that Trump has “directed Flynn to Talk to
Russians during US election”; but later recovered after some inaccuracies of
the news and passage of tax reform bill in the Senate following support of some
rebellion RNC Senators.
DJ-30 edged down by almost 0.17%; S&P-500 also inched down
by almost 0.20%, but well off the Flynn panic low of 2605 and closed around
2642, while NQ-100 dropped by almost 0.40%; banks & financials outperformed
on hopes of more sectoral deregulation & tax cuts benefits, while industrials
& techs/consumer discretionary (Amazon) plunged and energies helped on higher
oil on Friday.
Health care was also upbeat amid news that Amazon may be
interested for generic Drug makers (Mylan & Novartis).
US index future (SPX-500) is now trading around 2659, surged by almost
0.57% on US tax reform optimism and hopes that Flynn or Muller’s investigation
has no real evidence of Trump’s alleged links with Russia during US election
episode.
Technically, for SPX-500, 2665-2685 may be now a big hurdle and
2615-2595 is the near term positional support as of now.
EU market is also expected to open in upbeat mood on US tax
reform optimism and lower EUR (German political squabbling).
Back to home, Indian market
(Nifty/India-50) is now trading around 10180, edged up by almost 0.25% after
initial bout of volatility on concern of fiscal slippages & hopes of an
imminent RBI cut day after tomorrow.
Although there were no hopes of a rate cut this time, some
analysts/economists polled by BBG are assuming a rate cut of 0.25% by RBI
considering slower inflation & growth (?).
As par SBI, country’s largest lender, overall corporate loan
growth is still muted around 6-8% although retail credit growth is quite
strong.
Looking ahead, Banks will focus on quality of lending to corporates
rather than quantity; but it may be very tough to find eligible & quality corporate
borrowers willing to take loan from Indian banks at high rates rather than from
oversees market for a much lower rate with a viable project in hand.
SGX-NF
SPX-500
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