[www.niftyviews.com:26263] Nifty May Open Flat Amid Mixed Global Cues And Brightening Probability Of A July’17 GST Implementation & Banking NPA Resolution Policy; But SC “Jolt” On Auto Sector Yesterda

[Asis Ghosh]

*Market Mantra: 30/03/2017 (08:30)*

*SGX-NF: 9160 (+9 points)*

*Key support for NF/NS: 9115-9075*

*Key resistance for NF/NS: 9195-9235*

*Key support for BNF/BNS: **21350-21150*

*Key resistance for BNF/BNS: **21500-21675*

As par early SGX indication, Nifty Fut (March) may open around 9160, 
almost flat following mixed global cues ahead of FY & QTR ending (fund 
flow factor). Overnight US market was also almost flat despite better 
than expected home sales data and an upbeat oil following favourable 
inventory data & some OPEC chatters regarding extension of production 
cut agreement.


In the Asian session, China market is under pressure following ongoing 
money market tightening (interbank-OMO) steps by PBOC. USD is getting 
strength amid Brexit woes and some dovish statement by ECB yesterday 
emphasizing that they are not in hurry to end its easy money policy. 
Also, there was some renewed optimism about Trump’s $1 tln 
infrastructure plan over next ten years and almost all the Fed speakers 
are maintaining a moderate hawkish stance in their speech, advocating 
another 2-3 hikes in 2017, although subjected to various caveats, like 
US inflation trajectory and actual trajectory of Trumponomics.


Back to home, market may be in celebrating mode after passage of GST in 
the LS yesterday, although it is highly discounted and a July’17 roll 
out of the same may also be largely discounted and going forward, market 
may be also apprehending any probable disruption in the economy for a 
hurried launch of the same.


Yesterday’s adverse SC verdict on the BS-III issues on the Indian auto 
sectors may be far reaching than a short term disruptive action and 
market may also show some concern for this.


*Hints for actionable trading idea:*

*Time & Price action suggests that, Nifty Fut (March)/Nifty Spot has to 
sustain over 9195 area for further rally towards 9235-9275 & 9350-9425 
by today / in the short term (under bullish case scenario).*


*On the other side, sustaining below 9175 area, NF/NS may fall towards 
9115-9075 & 9035-8980 area by today / in the short term (under bear case 
scenario).*


*Similarly, BNF/BNS has to sustain over 21500 area for further rally 
towards 21675-21750 & 21850-21950 area by today / in the near term 
(under bullish case scenario).*


*On the other side, sustaining below 21450 area, BNF/BNS may fall 
towards 21350-21150 & 20950-20700 zone by today / in the near term 
(under bear case scenario).*






 NF

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Asis Ghosh

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[www.niftyviews.com:26262] Nifty Jumped By Another 41 Points On Optimism About An Effective Banking NPA Resolution Mechanism & GST Roll Out From July’17; Auto Stocks Were Under Pressure Due To “Advers

[Asis Ghosh]

*Market Wrap: 29/03/2017 (19:00)*

*NSE-NF: 9151 (+41 points; +0.45%)*

*NSE-BNF: 21411 (+176 points; +0.83%)*

*For 30/03/2017:*

*Key support for NF: 9115-9075*

*Key resistance for NF: 9195-9235*

*Key support for BNF: 21350-21150*

*Vital resistance for BNF: 21500-21675*
*Time & Price action suggests that, Nifty Fut (March)/Nifty Spot has to 
sustain over 9195 area for further rally towards 9235-9275 & 9350-9425 
BY tomorrow / in the short term (under bullish case scenario).*


*On the other side, sustaining below 9175 area, NF/NS may fall towards 
9115-9075 & 9035-8980 area by tomorrow / in the short term (under bear 
case scenario).*


*Similarly, BNF/BNS has to sustain over 21500 area for further rally 
towards 21675-21750 & 21850-21950 area by tomorrow / in the near term 
(under bullish case scenario).*


*On the other side, sustaining below 21450 area, BNF/BNS may fall 
towards 21350-21150 & 20950-20700 zone by tomorrow / in the near term 
(under bear case scenario).*


Nifty Fut (March) today closed around 9115, rallied by another 0.45% 
after making a last minute high of 9151 and an opening session low of 
9119. Domestic market today opened in a positive zone after overnight 
rally in US market (+0.73%) amid better than expected & upbeat US 
consumer confidence data. Also, there was renewed optimism about passage 
of the health care bill in some modified form as a compromise by Trump 
with his DNC oppositions & RNC dissidents. Market is also very hopeful 
that tax reform bill being a different issue altogether, eventually 
Trump will be able to pass it.


Amid positive US cues and some concern over “Real Brexit”, Indian market 
today got support from the ongoing talk of an effective & quick 
resolution about the huge banking NPA. The market is basically looking 
for a big bang announcement by the Govt for a super ARC or bad bank to 
address the NPA issue.


But, going by different commentary of the policymakers, Govt may 
initially focus on the big 40-50 corporate stressed accounts (NPA/NPL) 
primarily in the infra sector involving around Rs.4.80 tln NPA (i.e. 
around 70% of the present declared NPA by the banks) and will try to 
address the same by either some bad bank idea or by some modification of 
the existing CDR rules. A decision may be arrived at the scheduled 
meeting between bankers & policymakers by this week. Most probably, Govt 
may not go for a big bad bank creation at this point of time and instead 
may modify the current CDR norms as par suggestions by the banks to 
lower the NPA provision requirements and repair the stressed banking 
balance sheet of the PSBS. Govt may also encourage the inevitable M&A 
not only within PSBS, but may also permit with some private bankers 
having “animal spirit”.


Govt’s response for the “too big to fall” NPA issues involving the 
maximum stressed accounts may benefit SBI, PNB & Axis, ICICI bank, if 
the same is resolved in a meaningful way; otherwise it may be the same 
“band aid” treatment and not a “big surgery”.


Although, today after market hours, Kotak Bank promoter delivers nothing 
against huge market expectation of a M&A “bazooka”, some of his post 
presser comments may also be very interesting about M&A consolidation in 
the banking space. Apart from eyeing the Axis Bank SUUTI stake sale from 
the Govt in the coming days, Kotak may be also interested for some 
fragile PSBS M&A with itself or some other strong private banking group 
as beside huge capital, a good management is also required for most of 
the ailing PSBS. As Govt is now has huge political support, it may think 
such strategy to integrate some of the fragile PSBS with some private 
banks as next banking reform (privatization of some of the PSBS) after 
cleaning up of the stressed assets to a bad bank !!



Indian market today also got some support after Govt tabled the GST bill 
for discussions & passage in the LS, being a money bill. As expected, 
the bill will be passed and GST may be also implemented from July’17; 
but some experts and stakeholders are still not so much confident about 
a smooth July’17 roll out and considering all the pros & cons, they are 
advocating for a Sep’17 roll out of the same. A hurried launch from 
July’17 may be more disruptive, considering the final shape of GST will 
be ready only by May’17 after fixation of rates of the different 
products and in that scenario, time & IT preparedness may be a challenge 
for its proper implementation; business/industry & also the 
administration may not be prepared for such hurried launch of the GST.


Considering all the uncertainties, Govt may also confirm a “firm date” 
of 1^st Sep’17 in lieu of 1^st July’17 for GST roll out for the time 
being. Govt may even prefer for further debates & discussions about GST 
structure among the stakeholders and may also defer it to 1^st April’18, 
considering so many regulations & complexities.


Indian market sentiment was affected today by some extent after SC gav