*Market Wrap: 04/11/2016 (16:30)*
Nifty Fut (Nov) today closed around 8458 (-0.70%) after making a session
high of 8530 in the opening session and subsequent day low of 8426.
*Technically, for next week (07/11/2016), NF has to sustain above
8440-8485* area for any bounce back; otherwise it may fall towards
8405-8360/35*-8260 and 8160-8035*-7975/7925 zone in the immediate to
short term.*
*On the other side, for any meaningful strength, NF needs to close
consecutively above 8545-8590* zone for further rally towards
8635-8660-8705* & 8750-8795-8875 area in the immediate to short term.*
*Overall, consecutive closing below 8545-8485 area, may pave the way for
8000-7925 area in NF and the present down trend may change only
consistent closing above 8545-8590 area for any bounce back towards
8800-9000 zone.*
Indian market today opened lower (gap down) and there was visible
negative sentiment most of the day, especially in the midcaps and
*Pharma scrips* (US DOJ investigation issue for generic drugs pricing
marked by US politics).
Indian market also underperformed its global peers for this week marked
by US Election uncertainty as gap between Clinton & Trump has narrowed
significantly.
The apparent under performance may be due to the fact that S&P and other
rating agencies has refused for any immediate rating upgrade for India
citing low per capita income, lack of private investments & sufficient
bank recapitalization amid pain of India’s “twin balance sheet”. Also
lack of private investments is forcing the Govt for more capex and
together with that higher defence expenditure and 7-CPC pay outs are
making the fiscal deficit more alarming.
Another factor may be that, who ever wins this time (Clinton or Trump),
USD is bound to be strong and Fed also have to hike 1-2 times in 2017
apart from Dec’16. Also, there will be FCNR(B) redemption pressure on
INR in the coming days. In that scenario, USDINR may jump towards 70 and
a weak rupee may be bad for FPI(s) portfolio and this may be one of the
reasons, FII(s) are selling for the last few weeks consistently.
Govt yesterday proposed multiple GST rates along with cess, which may be
more confusing and eventually may not contribute to the much expected
GDP growth (1.5%) as ultimately consumer spending (consumption) may not
increase incrementally, because there will not be any drastic fall in
cost of livings and consumer goods.
There was also some report that GST council may not agree for a
consensus on another contentious issue of dual control mechanism, which
may also hurt the domestic market sentiment.
After market hours today, this concern comes true and the GST council
meeting for dual control mechanism remains inconclusive and they will
again meet in the last week of Nov. Thus, there may be considerable
doubt about passage of final GST bill in the forthcoming winter
Parliament session. Subsequently, the roll out plan for April’17 may
also look difficult and in that scenario, Govt may “plan” for Oct’17 GST
roll out, which may also be negative for the Indian market sentiment.
Also the ongoing tensions in Ind-Pak LOC and "war of words" between Tata
& Mistry has affected the overall Indian market sentiment and even at
parexpected Q2FY17 earnings failed to impressedthe overall market
sentiment.
Apart from the ongoing US Election drama & today’s NFP data, all eyes
may be on the FBI also for any conclusive outcome about Clinton’s e-mail
issues. If any “positive clearance” will come from the FBI in the
weekend just before US Election day because of immense political
pressure, global as well as the Indian market may rebound well.
When there is confusion between fundamentals (underlying news/event) and
technicals, one should always follow the technicals, even with a small
position as time & price is the ultimate.
*As of now, technicals suggest that SPF (LTP: 2082) has to sustain above
2075; otherwise, it may further fall towards 2050-2030-1995 level in the
immediate to short term (bear case scenario).*
**
*For any strength, SPF need to trade above 2100-2110* area for further
bounce back towards 2135-2150-2165 zone in the near term.*
<https://1.bp.blogspot.com/-8kEyp1L2K6w/WByEwQUtKjI/AAAAAAAAJWs/bQUPPG89n5Q4GFlESeFmvY89OrDUEZHKgCLcB/s1600/SGX-NF-PATTERN-04-11-2016.png>
SGX-NF
<https://1.bp.blogspot.com/-gtMrrivTvsQ/WByFXTyaH4I/AAAAAAAAJWw/H0h_TH7rWEMsuQQhP08HocxUFkmc1bubQCLcB/s1600/SPF-PATTERN-04-11-2016.png>
SPF
--
Thanks & Regards,
Asis Ghosh
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