Market Mantra (Nifty Fut/Bank Nifty Fut/SPX-500): 31/05/2018

Updated: 08:55

SGX-NF: 10640 (+27; +0.25%)

Expected BNF opening: 26338 (+66; +0.25%)

SPX-500: 2723 (-1; -0.06%)

Fut-I (Key Technical Levels)

Support for NF:

10605/10570-10535/10490*-10450/10405-10375/10350

Resistance to NF:

10655/10675-10720*/10750-10800/10875-10935/10955

Support for BNF:

26200*/26050-25900/25700-25500/25350-25150/25000

Resistance to BNF:

26450*/26550-26650/26825-26950/27050-27250/27500

Support for SPX-500:

2705*/2690-2670/2650-2625/2610

Resistance to SPX-500:

2745/2760-2775/2890-2810/2835

Technical View (Nifty, Bank Nifty, SPX-500):

Technically, Nifty Fut-I (NF) has to sustain over 10675 for a further rally to 10720/10750-10800/10875-10935/10955 in the near term (under bullish case scenario). 

On the flip side, sustaining below 10655 NF may fall to 10605/10570-10535/10490-10450/10405 in the near term (under bear case scenario).

Technically, Bank Nifty-Fut (BNF) has to sustain over 26450 for a further rally to 26550/26650-26825/26950-27050/27250 in the near term (under bullish case scenario).

On the flip side, sustaining below 26400 BNF may fall to 26200/26050-25900/25700-25500/25350 in the near term (under bear case scenario).

Technically, SPX-500 now has to sustain over 2760 for a further rally to 2775/2890-2810/2835 in the near term (under bullish case scenario).

On the flip side, sustaining below 2745-2735 SPX-500 may fall to 2705/2690-2670/2650 in the near term (under bear case scenario).

Valuation metrics:

Nifty-50: 10614; Q3FY18 EPS: 403; Q3FY18 PE: 26.34; Avg FWD PE: 20; Proj FY-18 EPS: 418; Proj Fair Value: 8360

Bank Nifty: 26328; Q3FY18 EPS: 807; Q3FY18 PE: 32.62; Avg FWD PE: 20; Proj FY-18 EPS: 961; Proj Fair Value: 19220

SPX-500: 2724; TTM Q4-2017 EPS: 111; TTM PE: 24.54

Positive opening on upbeat global cues amid hopes for a “political government” in Italy rather than a “technocrat government” and an imminent election, which may be dubbed as a de-facto EUR/EU referendum. Overnight US market was also boosted by a renewed surge in oil and ease of Volker rules positive for the energy companies and banks & financials respectively.

Indian market may watch oil as its again gaining momentum (near-term range of WTI may be $65-75). In addition to that, the market will also focus on the By-Poll results to gauze the underlying political sentiment in the country as a result of higher fuel prices and higher inflation, overall unemployment/underemployment issues, DeMo, and GST blues.

All eyes will be also on India’s fiscal deficit and Q4 GDP, which is poised to come around 7.3% against prior 7.2% (Y/Y). As a reminder, Moody’s has downgraded the Indian FY-18 GDP forecast to 7.3% from 7.5% earlier, while retained the FY-19 GDP forecast of 7.5% for the time being. Moody’s has cited higher oil prices, tighter financial conditions, high corporate NPA and the current wave of deleveraging to weigh on India’s recovery pace, while it may be supported by the cyclical recovery of private capex (business investment) and consumption.

The Indian market may be also concerned about MSCI warning about a review of India’s weightage for its protectionism stance in the SGX issue.

GLOBAL MARKET ANALYSIS:

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NIFTY-SGX-NF

BANK NIFTY-BNF

S&P-SPX-500

EURUSD

Market Mantra (Nifty Fut/Bank Nifty Fut/SPX-500): 30/05/2018

Updated: 08:20

SGX-NF: 10540 (-78; -0.73%)

Expected BNF opening: 25970 (-200; -0.75%)

SPX-500: 2687 (-5; -0.18%)

Fut-I (Key Technical Levels)

Support for NF:

10535/10490*-10450/10405-10375/10350-10300/10240

Resistance to NF:

10585/10605*-10635/10675-10720/10750-10800/10875

Support for BNF:

25900/25700*-25500/25350-25150/25000-24825/24700

Resistance to BNF:

26050/26200*-26350/26550-26650/26825-26950/27050

Support for SPX-500:

2670*/2650-2625/2610-2585/2550

Resistance to SPX-500:

2705/2725*-2745/2760-2775/2805

Technical View (Nifty, Bank Nifty, SPX-500):

Technically, Nifty Fut-I (NF) has to sustain over 10605 for a further rally to 10635/10675-10720/10750-10800/10875 in the near term (under bullish case scenario). 

On the flip side, sustaining below 10585 NF may fall to 10535/10490-10450/10405-10375/10350 in the near term (under bear case scenario).

Technically, Bank Nifty-Fut (BNF) has to sustain over 26200 for a further rally to 26350/26550-26650/26825-26950/27050 in the near term (under bullish case scenario).

On the flip side, sustaining below 26150-26050 BNF may fall to 25900/25700-25500/25350-25150/25000 in the near term (under bear case scenario).

Technically, SPX-500 now has to sustain over 2725 for a further rally to 2745/2760-2775/2805 in the near term (under bullish case scenario).

On the flip side, sustaining below 2705 SPX-500 may fall to 2670/2650-2625/2610 in the near term (under bear case scenario).

Valuation metrics:

Nifty-50: 10618; Q3FY18 EPS: 403; Q3FY18 PE: 26.35; Avg FWD PE: 20; Proj FY-18 EPS: 418; Proj Fair Value: 8360

Bank Nifty: 26255; Q3FY18 EPS: 807; Q3FY18 PE: 32.53; Avg FWD PE: 20; Proj FY-18 EPS: 961; Proj Fair Value: 19220

SPX-500: 2690; TTM Q4-2017 EPS: 111; TTM PE: 24.23

Note: Negative opening on terrible global cues amid ongoing Italian political saga and a fresh election, which is being seen as a referendum on EURO/EU and may also ultimately push the country for an “Italexit”. As the Italian 10Y bond yield soared above 3%, the market is concerned that the country may need an eventual bailout by ECB/IMF like in the case of Greece a few years back. Political risk in Spain is also increasing amid no-confidence vote there on Thursday/Friday and all these EU political jitters have affected the risk-on sentiment and prompted a flight to safety of bonds, Yen, CHF and Gold amid fears of a contagion effect.

The Indian market may rejoice some fall in oil and it’s still considerably high and the combination of higher oil, higher USD, higher bond yields may continue to prompt the FPIs to withdraw itself from the Indian as well as the EM market.

The ongoing tussle between Indian stock exchanges (NSE) and the SGX regarding the listing of Indian index and shares may also affect the country’s aspiration of a global player and MSCI may also take some action in its index rating for the Indian scrips. On the other side, timely/advance monsoon this year may also help the market sentiment to some extent. But mixed/muted earnings (EPS) so far in Q4FY18 may be also affecting the overall sentiment as valuations are quite expensive.

GLOBAL MARKET ANALYSIS:

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NIFTY-SGX-NF 

BNF

SPX-500

CRUDE OIL/WTI

Market Mantra (Nifty Fut/Bank Nifty Fut/SPX-500): 29/05/2018

Updated: 08:20

SGX-NF: 10645 (-31; -0.29%)

Expected BNF opening: 26425 (-0.30%)

SPX-500: 2719 (+1; +0.05%)

Fut-I (Key Technical Levels)

Support for NF:

10620/10600*-10570/10550-10490/10405-10365/10340

Resistance to NF:

10655/10675-10720*/10750-10800/10875-10935/10955

Support for BNF:

26350/26125*-26000/25800-25600/25500-25350/25150

Resistance to BNF:

26650/26825*-26950/27050-27150/27250-27500/27650

Support for SPX-500:

2715/2695*-2675/2655-2625/2610

Resistance to SPX-500:

2745/2760*-2775/2805-2820/2855

Technical View (Nifty, Bank Nifty, SPX-500):

Technically, Nifty Fut-I (NF) has to sustain over 10675 for a further rally to 10720/10750-10800/10875-10935/10955 in the near term (under bullish case scenario). 

On the flip side, sustaining below 10655 NF may fall to 10620/10600-10570/10550-10490/10405 in the near term (under bear case scenario).

Technically, Bank Nifty-Fut (BNF) has to sustain over 26650 for a further rally to 26825/26950-27050/27150-27250/27500 in the near term (under bullish case scenario).

On the flip side, sustaining below 26600 BNF may fall to 26350/26125-26000/25800-25600/25500 in the near term (under bear case scenario).

Technically, SPX-500 now has to sustain over 2760 for a further rally to 2775/2805-2820/2855-2880/2895 in the near term (under bullish case scenario).

On the flip side, sustaining below 2745, SPX-500 may fall to 2725/2715-2695/2675-2655/2625 in the near term (under bear case scenario).

Valuation metrics:

Nifty-50: 10689; Q3FY18 EPS: 403; Q3FY18 PE: 26.52; Avg FWD PE: 20; Proj FY-18 EPS: 418; Proj Fair Value: 8360

Bank Nifty: 26614; Q3FY18 EPS: 807; Q3FY18 PE: 32.98; Avg FWD PE: 20; Proj FY-18 EPS: 961; Proj Fair Value: 19220

SPX-500: 2721; TTM Q4-2017 EPS: 111; TTM PE: 24.51

Note: Negative opening on EU political crisis from Italy to Spain and also Brexit. The Asian market is also under stress on lower oil and USDJPY coupled with renewed concern about the success of the US-North Korea summit due to hard negotiation stance by the US, such as shipping out all the Nukes and missiles out North Korea.

For the Indian market, oil will be in focus apart from a deluge of earnings and also politics. As par Russian President Putin’s preference, oil (WTI) seems to get technical support around $65 level and in that scenario, oil could again boil towards $75. Brent oil is also trading around now around $75 and even if it stays in the $75-85 levels for few months, then it could spell a disaster for the Indian macros.

In politics, all eyes will be on the by-poll results on Thursday to see whether INC is making any progress. But ongoing political squabbling in the INC-JDS coalition government in Karnataka regarding the allocation of ministries, especially the Finance ministry not a good sign at all for the “united oppositions” or so-called “Federal Front”. That may be positive for the BJP in the 2019 general election.

JDS (CM) Kumaraswamy commented on Monday that his government is not chosen by the people of Karnataka, but by the INC. This may be an indication of a rift between INC and JDS, although such political squabbling is natural in the Indian politics. But the market may have also got some boost on such rift in the “opposition unity”.  

GLOBAL MARKETS ANALYSIS:

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NIFTY-SGX-NF

BANK NIFTY-BNF

EURUSD

CRUDE OIL/WTI

Market Mantra (Nifty Fut/Bank Nifty Fut/SPX-500): 28/05/2018

Updated: 08:40

SGX-NF: 10650 (+42; +0.40%)

Expected BNF opening: 26370 (+0.50%)

SPX-500: 2729 (+11; +0.41%)

Fut-I (Key Technical Levels)

Support for NF:

10630/10605*-10570/10535-10490/10405-10365/10340

Resistance to NF:

10655/10675*-10720/10750-10800/10875-10935/10955

Support for BNF:

26300/26125*-26050/25900-25800/25600-25500/25400

Resistance to BNF:

26425/26475-26550*/26650-26825/26950-27050/27250

Support for SPX-500:

2715/2695*-2675/2655-2625/2610

Resistance to SPX-500:

2745/2760*-2775/2805-2820/2855

Technical View (Nifty, Bank Nifty, SPX-500):

Technically, Nifty Fut-I (NF) has to sustain over 10675 for a further rally to 10720/10750-10800/10875-10935/10955 in the near term (under bullish case scenario). 

On the flip side, sustaining below 10655 NF may fall to 10630/10605-10570/10535-10490/10405-10365/10340

in the near term (under bear case scenario).

Technically, Bank Nifty-Fut (BNF) has to sustain over 26475 for a further rally to 26550/26650-26825/26950-27050/27250 in the near term (under bullish case scenario).

On the flip side, sustaining below 26425 BNF may fall to 26300/26125-26050/25900-25800/25600in the near term (under bear case scenario).

Technically, SPX-500 now has to sustain over 2760 for a further rally to 2775/2805-2820/2855-2880/2895 in the near term (under bullish case scenario).

On the flip side, sustaining below 2745, SPX-500 may fall to 2725/2715-2695/2675-2655/2625 in the near term (under bear case scenario).

Valuation metrics:

Nifty-50: 10605; Q3FY18 EPS: 403; Q3FY18 PE: 26.31; Avg FWD PE: 20; Proj FY-18 EPS: 418; Proj Fair Value: 8360

Bank Nifty: 26265; Q3FY18 EPS: 807; Q3FY18 PE: 32.55; Avg FWD PE: 20; Proj FY-18 EPS: 961; Proj Fair Value: 19220

SPX-500: 2721; TTM Q4-2017 EPS: 111; TTM PE: 24.51

Note: Positive opening on upbeat global cues amid increasing hopes of a North Korean truce and some fall in bond yields. For the Indian market, apart from the 4^th anniversary of the NAMO government, risk-on sentiment was boosted by plunge in oil of more than 7% in the last few days amid OPEC-NOPEC/Russian squabbling about increase of oil output (compliance level from 152% to 100%) and a doubt about the production extension agreement beyond Dec’2018.

GLOBAL MARKETS ANALYSIS:

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NIFTY-SGX-NF

BANK NIFTY-BNF 

S&P-SPX-500

WTI/CRUDE OIL

Market Mantra (Nifty Fut/Bank Nifty Fut/SPX-500): 25/05/2018

Updated: 08:15

SGX-NF: 10510 (-12; -0.11%)

Expected BNF opening: 25930 (-0.15%)

SPX-500: 2735 (+8; +0.29%)

Fut-I (Key Technical Levels)

Support for NF:

10490*/10470-10425/10395-10360/10340-10290/10245

Resistance to NF:

10565/10605*-10655/10700-10740/10800-10875/10935

Support for BNF:

25900/25800*-25600/25500-25400/25300-25100/24950

Resistance to BNF:

26050/26150*-26300/26450-26650/26825-26950/27050

Support for SPX-500:

2715/2695*-2675/2655-2625/2610

Resistance to SPX-500:

2745/2760*-2775/2805-2820/2855

Technical View (Nifty, Bank Nifty, SPX-500):

Technically, Nifty Fut-I (NF) has to sustain over 10565 for a further rally to 10605/10655-10700/10740-10800/10875 in the near term (under bullish case scenario). 

On the flip side, sustaining below 10545 NF may fall to 10490/10470-10425/10395-10360/10340 in the near term (under bear case scenario).

Technically, Bank Nifty-Fut (BNF) has to sustain over 26050 for a further rally to 26150/26300-26450/26650-26825/26950 in the near term (under bullish case scenario).

On the flip side, sustaining below 26000 BNF may fall to 25900/25800-25600/25500-25400/25300 in the near term (under bear case scenario).

Technically, SPX-500 now has to sustain over 2760 for a further rally to 2775/2805-2820/2855-2880/2895 in the near term (under bullish case scenario).

On the flip side, sustaining below 2745, SPX-500 may fall to 2725/2715-2695/2675-2655/2625 in the near term (under bear case scenario).

Valuation metrics:

Nifty-50: 10514; Q3FY18 EPS: 403; Q3FY18 PE: 26.09; Avg FWD PE: 20; Proj FY-18 EPS: 418; Proj Fair Value: 8360

Bank Nifty: 26017; Q3FY18 EPS: 807; Q3FY18 PE: 32.24; Avg FWD PE: 20; Proj FY-18 EPS: 961; Proj Fair Value: 19220

SPX-500: 2728; TTM Q4-2017 EPS: 111; TTM PE: 24.58

Note: Negative opening on mixed global cues after Trump dumps Kim and suddenly cancels the scheduled NK summit on 12^th June. The US market plunged as a knee-jerk reaction, but it recovered to some extent and closed only 0.20% lower on the perception that increasing NK “nuke” as well as China “trade” war concern may also prompt Fed to stay in the sideline after June hike till at least Dec’18.

In the morning Asian session, risk-on sentiment got some boost after a measured and conciliatory reaction from NK in lieu of the usual “fire & fury” mode, requesting to “re-consider” Trump’s decision to cancel the summit on 12^th June. After Trump “walks out” from the well planned NK summit, overall reaction from US officials including Trump may also be measured and thus the market is calm on renewed hopes of NK truce and summit next month or later.

The Indian market may watch government’s steps to cut back the retail price of petrol/diesel. As par some report, the government may ask a huge windfall amount (compensation) from oil producers like ONGC, RIL/BP to bring the gasoline prices lower instead of any cut in excise duties or VAT from the states. This may be one of the reasons behind sudden last hour NAMO "anniversary" rally of the Indian market on Thursday as it will not hamper the fiscal deficit equation.

Apart from oil cess, the market was also boosted by exporters (techs/pharma) on higher USD, as USDINR still up by around 7% YTD. Tech shares were also upbeat on analyst optimism about prospect higher work orders from US banks and financials and other sectors as a result of higher capex after the Trump tax reform.

The Indian market may also watch the floor test today in the Karnataka assembly for any “surprise” from the BJP in the great game of “horse trading”. But increasing political populism such as farm loan waiver by both BJP and INC/JDS may be also a cause of concern.

GLOBAL MARKET 

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SGX-NF

BNF

SPX-500

USDJPY