Technical & Macro Analysis Of Indian & Global Market----: 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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