Market Mantra <https://www.iforex.in/news>: 18/09/2017 (09:00)
SGX-NF: 10150 (+54)
For the Day:
*Key support for NF: 10105-10060/10035*
*Key resistance for NF: 10160-10205*
*Key support for BNF: 24700-24500*
*Key resistance for BNF: 25050-25150*
*Hints for positional trading:*
*Technicals indicate that, NF has to sustain over 10205 area for further
rally towards 10250- 10325 & 10385-10455 area in the short term (under
bullish case scenario).*
*On the flip side, sustaining below 10180-10160 area, NF may fall
towards 10105-10060/10035 & 9965-9925 area in the short term (under bear
case scenario).*
*Similarly, BNF has to sustain over 25050 area for further rally towards
25150-25250 & 25350-25500 area in the near term (under bullish case
scenario).*
*On the flip side, sustaining below 25000-24975 area, BNF may fall
towards 24700-24500 & 24400 -24250 area in the near term (under bear
case scenario).*
As par early SGX indication, Nifty Fut (Sep) may open around 10150,
surged by almost 54 points, opening gap-up tracking *positive global
cues* as US vowed for “peaceful pressure campaign” on NK coupled with
good Indian macro data on the weekend & supportive PBOC; HK market is up
by 1%, basically boosting the regional/Indian market sentiment.
Although, US is keeping all options on the table including a military
action on NK, it seems now that Trump will follow the path of pressure
diplomacy on the “rocket man” (Kim) with more expected sanction pressure
tactics on NK to deter the “hermit state” from further persuasion of
nuke capabilities. US has also indicated that Trump’s earlier “Fire &
Fury” comments on NK is not a mere rhetoric and also not an “idle threat”.
As par latest reports, SK has indicated that NK is in the final stages
of a nuke enabled ICBM (with bigger payload) and thus continue its
“provocations” by testing more ICBM & nuke. All eyes now may be on UN
general council global meet & Trump’s speech regarding the NK issues
tomorrow.
Geo-political events may take more centre stage this week along with Fed
& BOJ amid elections in NZ & Germany, while Abe announced a surprised
snap election on 22^nd Oct for JP as his political prospect looks better
amid prudent handling of NK provocations after a recent corruption scandal.
Fed is expected to announce a BS tapering program this week, which may
start with no further reinvestments from maturing bonds and then a
monthly selling of QE bonds in its holding at a gradual pace, say $10
bln/month for next 10 years in auto-pilot mode.
As this is a new experiment by a major central banker, never tried
before as a precaution, Fed may be refrained from further rate hike in
Dec’17. Thus Fed’s revised dot-plot & economic projections may be keenly
watched along with Fed’s statement & Yellen’s presser.
BOJ is now already purchasing less QE bonds, but with acute scarcity
it’s able to maintain the desired YCC of 10YJGB around 0% even with less
purchase; looking ahead it may also formally announce its intentions to
keep the YCC under control around 0% without too much focus on the JGB
purchase (indirect QE tapering); it may also return to ZRIP from NRIP
and target 1% JP core CPI on sustainable basis as 2% is still looking
very remote; thus BOJ may also join the global QT bandwagon
(Fed/ECB/BOE/BOC).
Overnight, on Friday weekend, *USDJPY* closed above 111 on hopes of a
hawkish Fed on 20^th Sep after surprised hawkish hold by BOE last week
and optimism about US tax reform detailed drafts on 25^th Sep; it seems
that market is not convinced by latest NK saber rattling unless some
serious missteps by any sides!!
*US stock market*closed around 0.25% higher in another record high,
which is quite regular these days; DJ-30 gained by around 0.29%, while
S&P-500 closed above 2500 level, up by almost 0.18% and NASDAQ was in
green by 0.30%. Telecoms, techs & banks has supported the US market on
Friday, while Oracle dragged it by some extent on poor guidance. Banks
were in demand for prospect of higher US bond yields on hopes of a
hawkish Fed this week, favourable for business models of the banks.
*US stock future (SPX-500)*is now trading around 2505, up by almost
0.25% on positive Asian cues; technically now it needs to sustain over
2515-2525 area for further record rally towards 2560-2580 zone;
otherwise it may come down and sustaining below 2485 zone, may again
fall towards 2450-2415 zone in the coming days.
Back to home, *Indian market* (Nifty Fut) is now trading around 10175,
up by almost 0.75% on positive global/Asian cues coupled with better
macro data on the weekend; FX reserve was swelled to above $400 bln for
the first time in the history; external debt was down by around 3% to
$472 bln on decrease in NRI deposits and external commercial borrowings;
exports was up by almost 10.30% supported by higher growths in petroleum
products, engineering & chemicals shipments; but gold imports also
raised by 69%.
But despite all the green shoots, valuations may be quite stretched amid
muted Q1FY18 earnings. Also hopes of earnings recovery in Q2FY18 &
H2FY18 may be low amid subdued consumption, tepid credit growth &
private investments.
Thus FIIs are in selling mode over stretched valuations & falling GDP
growth after DeMo & GST disruptions. So far, Indian market shrugged off
the FII selling on the power of domestic liquidity, but going ahead that
domestic liquidity flow may be also in doubt as Govt is intensifying its
“war on black money” & shell cos.
<https://3.bp.blogspot.com/-XB6zZxFn118/Wb9aSw75Q-I/AAAAAAAANIo/mFZkzvRRaXwcyNdx91AAbIO_sqqsFpsOwCLcBGAs/s1600/SGX-NF-WK-18-09-2017.png>
SGX-NF
--
Thanks & Regards,
Asis Ghosh
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