The Indian market (Nifty Fut) slips Tuesday on
subdued global cues and the concern of RBI autonomy. The Indian market (Nifty
Fut/India-50) closed around 10775 Monday, surged by almost +0.83% on positive
Asian cues, lower USD, lower oil and hopes of RBI truce with the government
coupled with a survey that BJP will win almost 300 seats alone in the
forthcoming general election. The market was already discounted that the RBI
governor will not resign after his meeting with
the PM and FM last week.
So far Nifty rallied almost +3.63% in November
after a plunge of almost -11.40% in October and September on higher USD, higher
oil, negative global cues, NBFC/HFC liquidity crisis (default-ILF&S),
hawkish RBI and “war of words” between the RBI and the Indian government.
All eyes were on the RBI board meeting on Monday.
After almost 9-hours of marathon meeting, it seems that although there may be a
truce, for the time being, RBI blinks
first and as per the government directive and will increase liquidity (cash
flow) in the system. Some of the regulatory power of RBI/MPC will be shared by
government appointees BFS (Board for Financial Supervision) or simply by the
RBI board. This raises a serious question of central bank independence
(autonomy) and RBI/MPC may now function like a corporate board rather than an
independent institution, free of political interference.
The government basically wants the RBI to take an
“accommodative” stance in lieu of “calibrated tightening” in this global era of
dual QT and in the process has entered into an elite membership of some
countries, which are now actively interfering in central bank’s monetary policy
(Argentina, Turkey and the US/Trump). The Indian government is now “desperate”
to kick-start lending to the MSME sector
in a big way ahead of the election, which could cause a big surge in NPA/NPL in
the years ahead as a result of such political populism. The government is also
eyeing the RBI surplus to fund its fiscal deficit, a plan which may be unheard
before in the history of central banks.
Technical
Aspect:
Updated:
10:00
Nifty-SGX-NF:
10727 (-40; -0.37%)
Bank
Nifty-BNF: 26220 (-99; -0.38%)
USDINR-I:
71.39 (-0.34; -0.24%)
SPX-500: 2688 (-8; -0.32%)
Fut-I (Key Technical Levels)
Support for NF:
10690/10635*-10595/10550-10495/10450-10410/10340-10300/10270
Resistance to NF:
10785/10805*-10875/10905-10975/11025-11085/11165-11230/11295
Near-term broad range: 10000-10805
Support for BNF:
26250/26050*-25900/25700-25425/25350-25200/24950-24850/24600
Resistance to BNF:
26400/26550*-26700/26900-27200/27350-27550/27750-28000/28200
Near-term broad range: 24250-26550
Support for USDINR-I:
71.65/71.20-70.90*/70.45-70.15/70.00-69.70/69.30-69.00/68.25
Resistance to USDINR-I:
72.10/72.55-72.85/73.35-73.75/74.05-74.35/74.75-75.00/75.65
Near-term broad range: 70.90-74.75
Support for SPX-500:
2680/2645*-2620/2590-2580/2560-2535/2520-2490/2445
Resistance to SPX-500:
2700/2725*-2755/2775-2795/2820-2835/2860-2880/2905
Near-term broad range: 2590-2820
Technical
View (Nifty, Bank Nifty, USDINR-I, SPX-500):
Technically, Nifty Fut-I (NF) has to sustain over 10805 for a
further rally to 10875/10905-10975/11025-11085/11165-11230/11295 in the near
term (under bullish case scenario).
On the flip side, sustaining below 10785-10765/10725 NF may fall to 10690/10635-10595/10550-10495/10450-10410/10340
in the near term (under bear case scenario).
Technically, Bank Nifty Fut-I (BNF) has to sustain over 26400
for a further rally to 26550/26700-26900/27200-27350/27550-27750/28000 in the
near term (under bullish case scenario).
On the flip side, sustaining below 25350-26250 BNF may fall to 26050/25900-25700/25425-25350/25200-24950/24850
in the near term (under bear case scenario).
Technically, USDINR-I has to sustain over 71.65 for a further
rally to 72.10/72.55-72.85/73.35-73.75/74.05-74.35/74.75 in the near term (under bullish case
scenario).
On the flip side, sustaining below 71.20, USDINR-I may fall to 70.90/70.45-70.15/70.00-69.70/69.30-69.00/68.25
in the near term (under bear case
scenario).
Technically, SPX-500 has to
sustain over 2725 for a further rally to 2755/2775-2795/2820-2835/2860-2880/2905
in the near term (under bullish case scenario).
On the flip side, sustaining below 2715-2700 SPX-500 may fall to 2680/2645-2620/2590-2580/2560-2535/2520
in the near term (under bear case
scenario).
Valuation metrics:
Nifty-50: 10700; Q2FY19 EPS: 413.70; Q2FY19 PE:
25.86; Avg FWD PE: 20; Proj FY-19 EPS: 425-450; Proj Fair Value: 8500-9000
Bank Nifty: 26200; Q2FY19 EPS: 495.50; Q2FY19 PE:
52.88; Avg FWD PE: 20; Proj FY-19 EPS: 961-1000; Proj Fair Value: 19220-20000
(assuming NPA recovery).
SPX-500: 2700; TTM Q2-2018 EPS: 123; TTM PE:
21.95; Proj 2019 EPS: 150-160; Avg FWD PE: 18; Proj 2019 EPS: 150-165; Proj
Fair Value: 2700-2970
GLOBAL MARKET ANALYTICS: https://iforex.in/news
FOLLOW ME: http://twitter.com/ASISIIFL
NIFTY FUT
BANK NIFTY FUT
SPX-500
CRUDE OIL-WTI
No comments:
Post a Comment