*Market Mantra: 06/04/2017 (08:30)*
*SGX-NF: 9240 (-43 points)*
*Key support for NF: 9215/9195-9140*
*Key resistance for NF: 9300-9375*
*Key support for BNF: 21650-21450*
*Key resistance for BNF: 21775-21875*
As par early SGX indication, Nifty Fut (Apr) may open around 9240, gap
down by around 0.46% following tepid global cues (risk off trade).
Although yesterday’s overall US economic data was mixed, FOMC minutes
reveals no specific mention about any Fed rate hike in June or Sep’17;
but some members feel that US stock market may be creating an asset
bubble and moreover FOMC also discussed a probable reduction in its huge
Balance Sheet of $4.5 tln by the end of this year. Though, there was no
specific details about tapering of Balance Sheet, Fed may stop
reinvesting (backdoor QE) proceeds from its portfolio of TSY & MSB and
may gradually taper its huge holdings of QE bonds. Fed also sees no
fiscal stimulus package or even an tax reform until 2018 and thus in no
urgency for a rapid rate hike. Also, US Congress speaker Ryan hinted
yesterday about possible delay in tax reform as there is significant
difference of opinions between GOP & Trump over this tax reform.
If Fed indeed go for a Balance Sheet reduction, then it may cause abrupt
increase in US bond yields and overall real cost of borrowings may
increase significantly and that may be a real QE tapering effect on the
economy and thus smart money may be now flowing from “risk assets”
(USD/Stocks) to the safety of US bonds & likes of Japanese Yen (safe
haven currency).
Back to home, all eyes will be now on the RBI’s statement (hawkish or
dovish) & SDF for draining out the excess DeMo bank deposits as there is
no probability of a rate cut today.
*Hints for actionable trading idea:*
*Time & Price action suggests that, Nifty Fut (Apr) has to sustain over
9325 area for further rally towards 9375-9425 & 9465-9505 by today / in
the short term (under bullish case scenario).*
*On the other side, sustaining below 9305 area, NF may fall towards
9245-9195 & 9140-9090 area by today / in the short term (under bear case
scenario).*
*Similarly, BNF has to sustain over 21775 area for further rally towards
21875-21950 & 22050-22150 area by today / in the near term (under
bullish case scenario).*
*On the other side, sustaining below 21725 area, BNF may fall towards
21650-21525 & 21425-21300 zone by today / in the near term (under bear
case scenario).*
<https://1.bp.blogspot.com/-KoODE4hBIJk/WOW6_-m1p8I/AAAAAAAALN4/Wv3zuCmDESc0uZ3JB1qwpjYElIbsFdJXwCLcB/s1600/SGX-NF-06-04-2017.png>
**SGX-NF
--
Thanks & Regards,
Asis Ghosh
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