*Market Wrap: 07/03/2017 (19:00)*
*Time & Price action suggests that, Nifty Fut (March @8973) has to
sustain over 9020-9035 area for further rally towards 9075-9125 &
9195-9275 in the short term (under bullish case scenario).*
*On the other side, sustaining below 8995 zone, NF may fall towards
8945-8905 & 8865-8795 area in the near term (under bear case scenario).*
*Similarly, BNF (LTP: 20720) has to sustain over 20950 area for further
rally towards 21050-21150 & 21350-21500 area in the near term (under
bullish case scenario).*
*On the other side, sustaining below 20900 area, BNF may fall towards
20750-20600 & 20500-20250 zone in the near term (under bear case scenario).*
Nifty Fut (March) today closed around 8973 (-6 points) after gyrating
the whole day in an extremely narrow range of less than 30 points with
session low of 8960 & high of 8989. Indian market today opened in a flat
note following tepid global cues and did not move much as there was no
fresh trigger for the domestic market as a whole, except some stock
specific news & moves. As market is already trading around life time
high and Nifty is also facing considerable resistance around 9000 level,
it need some fresh triggers to move ahead on either directions; weekend
poll result and US NFP data may be such events in the coming days.
*Technically, whatever be the narratives, NF need to close/sustain
consistently above 9035-9075 area for target of 9195-9260 & 9425-9550 in
the coming days; otherwise it will fall towards 8725-8435 area in the
days ahead.*
Apart from state election results, especially for the prestigious UP
assembly & actual progress of GST, Indian market may also focus on US
NFP job data on the weekend as Fed is poised to raise rate by another
0.25% on 15^th March, provided the NFP data is not terrible. Also
tomorrow’s US ADP Job data, China trade balance and Draghi/ECB on
Thursday may be important for the global as well as Indian market
sentiment.
Indian market may not be discounted yet for a March rate hike by Fed as
the domestic market is being driven by better than expected Q3FY17 GDP &
earnings, hopes of GST from July-Se’17 and a high probable big win for
BJP/NAMO in the ongoing state elections, including UP (except Punjab).
Domestic market sentiment was turned slight tepid today after reports
that Govt may take some harder rules for FY-18 PSBS recapitalization
programme linked on actual performance & resolution of NPA; some PSBS
was turned lower. Market sentiment was also turned sluggish after OECD
warned about tepid global growth amid increasing geo-political risks,
trade protection rhetoric by Trump/US and probability of successive rate
hikes by Fed in 2017-18. All these can lead to stagflation like scenario
in US and other parts of the global economy, which is now evident with
UK, which is dueling with higher inflation and lower growth at present,
thanks to concerns of Brexit and a significant devalued currency (GBP).
As par Fitch, by 2017-18, Fed may hike by 7-8 times (??) and if that is
the case, there may be immense pressure on EM currencies & also on INR
and it may be also an end to easy money policy by ECB/BOJ/PBOC as they
can’t afford to be much divergent with Fed’s monetary policy. For the
time being, global market is discounting 2 rate hikes by Fed in 2017 and
depending upon the actual rate action on 15^th March and Fed’s
language/guidance (hawkish or dovish), market will decide next course of
action.
Rating agency Fitch today also expressed some doubt about CSO’s (Govt)
figure of 7% GDP growth in Q3FY17 citing improper/no capture of the
informal economy; although it has predicted FY-17 GDP at 7.1% and 7.7%
for FY:18-19. In any way, there may be some favourable base effects for
the better than expected Q3 GDP figure and after proper capturing of
informal data (?), it may be also revised downwards in its final
calculation (Jan’18). In the meanwhile, market may focus on some other
high frequency macro data & forthcoming Q4FY17 earnings to have some
fair & reasonable assessment of the true state of Indian economy,
especially after DeMo.
Metal stocks were down today as “Dr. Copper” & other commodities/metals
were under pressure after forecast of tepid global & China growth. Also,
despite all the rhetoric, Trump has not divulged any specific plan for
his $100-130 bln infra spending plan in US for next ten years (total 1$
infra spending talks by Trump, which is also well known by the market).
ITC recovered today from the low of the day after reports of price hike
in some of their cigarette brands. Power Stocks were in the limelight
today after reports approval by the Govt for their coal linkage auction.
<https://4.bp.blogspot.com/-bTWNp4lB69o/WL7Eut38d8I/AAAAAAAAKxo/RMQO9Rh5bRAHfVbUtsyP8b60HhLDVo_agCLcB/s1600/SGX-NF-PATTERN-07-03-2017.png>
SGX-NF
<https://4.bp.blogspot.com/-bT6ykFvaL-Q/WL7Ex8gH7jI/AAAAAAAAKxs/O2JsHDWrGSYUuhNKGDu4I09krIMAP_nCQCLcB/s1600/BNF-PATTERN-07-03-2017.png>
BNF
--
Thanks & Regards,
Asis Ghosh
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