Technical & Macro Analysis Of Indian & Global Market----: Market Mantra (Nifty Fut/Bank Nifty Fut/SPX-500): 07/06/2018

Updated: 08:30

SGX-NF: 10735 (+45; +0.42%)

Expected BNF opening: 26500 (+119; +0.45%)

SPX-500: 2774 (+1; +0.05%)

Fut-I (Key Technical Levels)

Support for NF:

10715*/10675-10625/10585-10545/10525-10495/10425

Resistance to NF:

10785/10805*-10855/10875-10910/10955-11000/11040

Support for BNF:

26500*/26300-26100/25900-25800/25700-25500/25200

Resistance to BNF:

26675/26850-26950*/27050-27150/27250-27500/27650

Support for SPX-500:

2760/2740-2725/2715-2700/2690-2675/2655

Resistance to SPX-500:

2775/2790-2810/2835-2855/2880-2905/2960

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

Technically, Nifty Fut-I (NF) has to sustain over 10805 for a further rally to 10855/10875-10910/10955-11000/11040 in the near term (under bullish case scenario).

On the flip side, sustaining below 10785 NF may fall to 10715/10675-10625/10585-10545/10525 in the near term (under bear case scenario).

Technically, Bank Nifty-Fut (BNF) has to sustain over 26675 for a further rally to 26850/26950-27050/27150-27250/27500 in the near term (under bullish case scenario).

On the flip side, sustaining below 26625 BNF may fall to 26500/26300-26100/25900-25800/25700 in the near term (under bear case scenario).

Technically, SPX-500 now has to sustain over 2790 for a further rally to 2810/2835-2855/2880-2905/2960 in the near term (under bullish case scenario).

On the flip side, sustaining below 2775 SPX-500 may fall to 2760/2740-2725/2715-2700/2690 in the near term (under bear case scenario).

Valuation metrics:

Nifty-50: 10685; Q4FY18 EPS: 395; Q4FY18 PE: 27.05; Avg FWD PE: 20; Proj FY-19 EPS: 418; Proj Fair Value: 8360

Bank Nifty: 26368; Q4FY18 EPS: 766; Q3FY18 PE: 34.42; Avg FWD PE: 20; Proj FY-19 EPS: 961; Proj Fair Value: 19220

SPX-500: 2772; TTM Q4-2017 EPS: 111; TTM PE: 24.97

Note: On Wednesday India’s Nifty soared after a dovish hike by RBI. Although the hike was not expected, it came amid the continuation of RBI’s so-called “neutral” stance with higher projections of inflation, while GDP forecast was basically unchanged. The market took the RBI hike as “one & off” in H1FY19 unless core inflation and oil further surge; i.e. going forward, RBI may be data dependent.

As India’s central bank (RBI) raised its benchmark interest rate for the first time since 2014 and retained its “neutral” policy stance against expectations of “tightening” leading sovereign bonds (GSEC) to slip and the rupee to advance slightly and stocks jumped. But banks have already increased their base lending rate amid soaring bond yields and thus the higher borrowing costs may continue to haunt the Indian market after Wednesday’s short covering rally. Going ahead, RBI may hike another 0.25% in H2FY19 or Dec’18, if Fed goes for the 3^rd hike and India’s core inflation continues to hover around 6%.

GLOBAL MARKET ANALYSIS: IFOREX.in/news

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