The Indian market (Nifty
Fut/India-50) is currently trading around 10753 on Wednesday, edged down by
almost 0.25% on subdued global cues amid concern of a hawkish Fed/multiple rate hikes
and report of Muller subpoena probability for Trump, related to the ongoing
Russian link investigation.
The market
opened around 10779 and made a session high of almost 10786 on report of an
upbeat collection of GST for the month of April at Rs.1.03 trillion, which may
be a landmark in the sense that for the last 8 months (2017), the average
monthly GST collection was around Rs.0.90 trillion against target/requirement
of around Rs.1.00-1.15 trillion per month.
Although the government has termed the surge in April GST
collection as an indication of increased economic activity and better compliance,
it has also warned the same may be a seasonal factor, being the financial year
ending factor in March-17 and thus may not be repeated in next months. The market
was also boosted by some upbeat auto sales figure for April, which was reported
yesterday (Tuesday). But Techs are under stress following subdued report card
from IT major HCL Tech.
Meanwhile,
Indian manufacturing PMI for April came as 51.6, edged up from 51.0 prior and
the estimate of 51.3. But India’s March infrastructure output for March slumped
to 4.1% from 5.3% clocked in February (Y/Y). USDINR-I edged up by almost 0.15%,
while Indian 10Y bond yield slumped to 7.724% from prior 7.767% on Monday after
RBI permitted for increased FII/FPI limit for the government bonds (GSEC). Some
fall in crude oil may be also helping the bond market.
Although the Indian government is quite confident that
price of surging crude oil will be cooled down on higher US shale oil supplies
and resolution of geopolitical worries,
the market is concerned that crude oil is making a base of $60-65 and in that scenario,
India may be de-rated/re-rated.
Thus, the
Indian government is not ready to cut additional excise duty on the gasoline
(petrol and diesel), even if the Indian consumers are now paying exorbitant prices for the same. As a reminder,
every Rupee cut in excise duty on petrol & diesel results in a revenue loss of Rs. 0.13 trillion, which is a
significant amount being collected as an “easy revenue”.
Apart
from economics, all eyes may be on the politics, especially Karnataka state
election, which may be viewed as another acid test for both BJP (NAMO) and INC
(RAGA). The overall report card for Q4
was mixed so far; HDFC result was good, while Kotak Bank numbers were subdued
on Monday.
Nifty
soared on Monday on positive global cues and Indian bond market boost by RBI:
The Indian market closed
around 10784 on Monday, surged by almost 0.56% on positive global cues and RBI
boost for the Indian bond market. Risk-on global sentiment got some boost on fall in US/EU bond yields
coupled with upbeat corporate earnings and increasing prospect of a North Korean truce.
There was
also a report that from the month of May, RBI will increase purchase limit of Indian
government bonds gradually @0.50% per year, which may bring the surging Indian
bond yields lower. RBI is also considering increasing ECB borrowing limit for
certain sectors such as real estate. Nifty-I made an opening minute low of
around 10727 and late day high of 10788 on Monday.
On
Monday, Nifty was helped by HDFC (upbeat report card), TCS, HDFC Bank, L&T,
Kotak Bank, Infy, HUL, ITC, Yes Bank, SBI and others by around 101 points
(77+24), while it was dragged by RIL (subdued report card), Axis Bank, ICICI
Bank, UPL, Bharti Infratel, Eicher Motors, Gail, IBULLS Housing Fin, BPCL, IOC,
and others by almost 51 (50+1) points
cumulatively.
Overall on
Monday, Indian market was helped by PSU banks, selected private banks,
financials, automobiles, FMCG, techs, pharma, reality, consumption, infra, MNC
(higher USDINR) and media, metals to some extent, while it was dragged by
selected private banks (NPA fraud worries), energies (some fall in oil and
muted petchem margin and GRM by RIL).
Technical
View (Positional-Nifty, Bank Nifty, SPX-500):
Technically, Nifty Fut-I (NF) has
to sustain over 10800 for a further rally towards 10840/10870-10900/10930 in
the short term (under bullish case scenario).
On the flip side, sustaining below
10780 NF may fall towards 10710/10680-10640/10590 in the short term (under bear
case scenario).
Technically, Bank Nifty-Fut (BNF)
has to sustain over 25675 for a further rally towards 25775/25850-25915/26050
in the near term (under bullish case scenario).
On the flip side, sustaining
below 25625, BNF may fall towards 25400/25150-25000/24800 in the near term
(under bear case scenario).
Technically, SPX-500 now has to
sustain over 2685 for a further rally towards 2705/2730-2750/2765 in the near
term (under bullish case scenario).
On the flip side, sustaining below
2665, SPX-500 may fall towards 2630/2610-2595/2575 in the near term (under bear
case scenario).
SGX-NF
BNF
SPX-500
USDJPY
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