*Market Wrap: 27/03/2017 (19:00)*
*NSE-NF: 9067 (-51 points; -0.56%)*
*NSE-BNF: 21094 (-47 points; -0.22%)*
*For 28/03/2017:*
*Key support for NF: 9015-8960*
*Key resistance for NF: 9100-9175*
*Key support for BNF: 21000-20900*
*Vital resistance for BNF: 21250-21350*
*Time & Price action suggests that, Nifty Fut (March) has to sustain
over 9140 area for further rally towards 9175/9195-9215 & 9235-9275 for
tomorrow/ in the short term (under bullish case scenario).*
*On the other side, sustaining below 9120-9100 area, NF may fall towards
9060-9015 & 8980/8960-8895/8865 area by for tomorrow/ in the short term
(under bear case scenario).*
*Similarly, BNF has to sustain over 21350 area for further rally towards
21500-21675 area by tomorrow/ in the near term (under bullish case
scenario).*
*On the other side, sustaining below 21300-21250 area, BNF may fall
towards 21000-20900 & 20700-20600 zone by tomorrow/ in the near term
(under bear case scenario).*
Nifty Fut (March) today closed around 9067 and sheds 51 points after
making an opening minutes high of 9111 and day low of 9035. Indian
market today opened in a depressed note following tepid global cues
after an unexpected failure by Trump to repel the Obamacare bill on
Friday amid firm oppositions by some of his own RNC members (known as
Freedom Caucus). Although, Trump has majority in both houses of the US
senate, the fact that his so called affordable healthcare plan is being
vigorously opposed by some of his own members, has raised serious doubts
over his plan of Trumponomics in the days ahead. It’s the Trump’s
rhetoric of tax cuts & incremental infra/fiscal spending, which was
mainly responsible for the huge rally in risk assets post Trumpism
contrary to earlier perception of a prolonged “dooms day”; now Trump’s
own credibility for passage of such plans may be in at stake and we have
a global “risk off” environment as perception of Trump trade (reflation
trade) is fading.
Considering that some of Trump’s own RNC members are dead against border
tax & other types of trade barriers, it may be very tough for Trump to
pass his US Tax reform plan. Also, there are some market buzz that amid
such political war of Obamacare/Trumpcare, US house speaker Ryan may
resign, who is also a key architect of Trump’s team, responsible for the
Trumpcare & new tax reforms, although in the election days, Ryan has
opposed Trump for various controversies.
Still, some of the analysts do also feel that, Trump may not face such
vigorous oppositions from his own RNC members at the time of tax reform
bill passage, because the two issues are quite different. *Anyway,
whatever be the narratives, USDJPY (LTP: 110.20) has to sustain over now
111-112 zone for any rebound; otherwise there is not so much support
until 108.80-108.30 and sustain below that expect more bloodbath towards
107-105 & even 99 levels in the coming days.*
Looking ahead, apart from US political risks, global market may also
focus on host of Fed speakers in this week, especially for Yellen
tomorrow. Also, invocation of Article-50 will be on focus on 29^th March
by UK and as par current trends, it may be tough for UK to have a “Soft
Brexit”.
Among all these ongoing global jitters, Indian private metrological
organization (Skymet) today predicted a 5% below normal monsoon this
year amid concern of an El-Nino. Although, concern of El-Nino was
already known by the market, it was not supposed to disturb the main
monsoon season (June-Sep’17) this time and thus the sentiment of the
domestic market was affected by some extent today. Looking ahead, all
eyes may be on the IMD’s official monsoon projection this year, which is
expected to be almost normal. But, if IMD also agrees with Skymet, then
one can expect some knee jerk reaction by the market as India growth
story may face some hurdles in that scenario after DeMo led economic
disruptions, especially for the rural cash economy.
As expected, today Govt presented the final GST bill (?) to the
Parliament as a money bill. The bill will be debated on 29^th March and
will be subsequently passed by the LS as it will not go through the RS,
being a “money bill”. Although the Govt is trying its best to implement
the GST from 1^st July’17, it seems that various stakeholders including
industry & traders are not so much confident about its timely
implementation with so many regulations, multiple rates of taxes and
time & IT network preparation constraint. Even If GST is implemented in
a hurry from July’17 after finalization of all the rules & regulation by
May’17, it may do more disruption to the economy than any meaningful
contribution, at least for the short to midterm.
The present design of GST may be far cry from the original theme of “one
tax one nation” and being “revenue neutral” it may not serve any big
difference over the present system of VAT & CENVAT (ED). Both the
Central & State Govts are not ready for any sacrifice of the net tax
revenue and at the same time looking for less burden of taxes on the
people (consumers) and also on the producers/service providers by way of
input tax credit.; combination of these two may be quite difficult in
the present system of GST.
Domestic market was supported today by PSBS (SBI/BOB) and some private
banks (Indusind & HDFC). Apart from hopes of NPA reform by the Govt (bad
bank/super ARC in PPP mode for top 40-50 stressed accounts), SBI was in
the news for its insurance arm stake sale by way of an IPO. There were
also some renewed talks of Indusind Bank & Bharat Fin merger.
Indian market was under pressure today from RIL (SEBI fine), Idea
(renewed concern about telecom business stress), metals space (Tata
Steel/Hindalco) for China & reflation trade concern and IT (weak USD and
H1B visa issues).
<https://1.bp.blogspot.com/-qj8Bz4alAo0/WNkakrZiZyI/AAAAAAAALD0/WxmlVfN4ECgS1mUYZdkieu2PdiN9pN3cwCLcB/s1600/NF-PATTERN-27-03-2017.png>
NF
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BNF
<https://1.bp.blogspot.com/-qEkTCU60Zh8/WNkawgp1ASI/AAAAAAAALEA/SwoNHa6pXlMLJH0XL-HkLhVl8A3xynWkgCLcB/s1600/USDJPY-WK-27-03-2017.png>
USDJPY
--
Thanks & Regards,
Asis Ghosh
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