Market Wrap
<https://www.iforex.in/news/nifty-slips-amid-mixed-q1-earnings-subdued-global-cues-gst-squabbling-39885>:
07/08/2017 (17:00)
NSE-NF (Aug):10086 (-23; -0.23%) (TTM PE: 25.46; Abv 2 SD of 25; Avg PE:
20; TTM EPS: 395; NS: 10057)
NSE-BNF (Aug):249981 (+151; +0.61%) (TTM PE: 31.33; Abv 3 SD of 30; Avg
PE: 20 TTM EPS: 795; BNS: 24906)
For 08/08/2017:
*Key support for NF: 10065-10010*
*Key resistance for NF: 10155-10205*
*Key support for BNF: 24900-24700*
*Key resistance for BNF: 25150-25275*
*Hints for positional trading:*
*Time & Price action suggests that, NF has to sustain over 10205 area
for further rally towards 10275-10325 & 10380-10455 in the short term
(under bullish case scenario).*
*On the flip side, sustaining below 10185-10155 area, NF may fall
towards 10065-10010 & 9965-9915 area in the short term (under bear case
scenario).*
*Similarly, BNF has to sustain over 25150 area for further rally towards
25275-25500 & 25695 -25865 area in the near term (under bullish case
scenario).*
*On the flip side, sustaining below 25100-25050 area, BNF may fall
towards 24900-24700 & 24600-24450 area in the near term (under bear case
scenario).*
Nifty Fut (Aug) today closed around 10086, down by almost 23 points
(-0.23%) in some brisk selling at the closing minutes after making an
opening session high of 10119 and closing session low of 10079 in a
lackluster day of trading marked by mixed set of Q1 earnings, GST
squabbling/confusions on luxury cars/SUV and subdued global cues and
lack of any meaningful domestic cues.
Indian market today opened around 10099; almost flattracking mixed
global/Asian cues. Most of the major Asian markets except Hong-Kong &
Australia were in redamid a blockbuster US NFP report on Friday,
relatively higher USD coupled with ongoing geo-political tensions over
NK-US, political drama over Trump’s alleged Russian links and even a
buzz of a high probable small scale conflict between China & India over
the Doklam LOC (Sikkim) issue.
Market may be also anxious over any further NK missile/ICBM test in
retaliation over the US sponsored UN sanction of its $1 bln export of
various minerals & iron ore, which accounts for nearly 33% of its
overall export revenue ($3 bln).
Overnight, on Friday weekend, most of the EU markets were closed with
handsome gains amid mixed earnings, but fall of EUR/EUR bund yields to
some extent as USD soared after the upbeat job report coupled with
renewed hopes of an impending US tax cut/reform legislation after WH
economic adviser Cohn has indicated for the same.
US market (DJ-30) also closed higher (+0.30%) supported by upbeat
economic data coupled with solid report card from some of the banks &
financials. But a higher USD may also affect the US market sentiment in
the days ahead as a weak USD may be one of the primary drivers of the US
stock market coupled with upbeat earnings; over 72% of the S&P companies
may have produced results better than market estimate in Q2.
A lower USD because of overall soft economic data, subdued inflation and
an apparent dovish Fed seems to be good for US corporate bottom line
(exports income) and may be also good for the imported inflation in the
US economy; overall it looks like a goldilocks types of economic
situation, where job market is quite tight and producing jobs with
decent earnings/wage growth without any runaway inflation in the
economy; i.e. not sufficient enough to create an unabated wage inflation.
Overall, USD reaction from the upbeat US job report on the weekend may
be muted as the surge in jobs is primarily for the low wage temporary
workers and this job report does not guarantee for a Dec’17 rate hike by
Fed; but a QE (B/S) tapering may be well on the card, either from Sep’17
or from Dec’17, followed by ECB in Jan’18.
Back to home, Indian market continue to haunt by the concern of
stretched valuations amid mixed Q1 report cards despite Friday’s closing
hours euphoria about Govt’s move to list a mega ETF (Bharat-22)
comprising of the CPSE, SUUITI & PSBS trim its holdings gradually in
those companies.
Govt may be also very concerned about non-transmission of input tax
credit (ITC) to the consumers by small retailers/traders across the line
and various channel checks may be also indicating that in Q2 also, there
may be some GST disruptions as most of the small retailers or traders
are not ready for a GST registration at all.
A strong INR even after hawkish cut by RBI last week may be also not
good for the Indian market (Nifty), being an export heavy index,
although it may be good for the overall import oriented Indian economy.
Govt may now reconsider to bring the petro products (petrol & diesel) in
the GST with a reasonable tax component as overall tax collections &
compliances from other sources is now gradually improving after DeMo,
UID & GST; a lower gasoline price in line with the international prices
may also act as a stimulus for the Indian economy, which is historically
high for decades, being one of the easiest tax revenue source for the Govt.
Overall, tax component on petro products in India may be around 75% on
an average, which is far greater than global average of around 25%.
Another factor, which may have affected the Indian market sentiment
today, is SEBI’s new regulations to report immediately any types of debt
defaults to the exchange compliance mechanism. Stressed assets may be
now on e of the primary headwinds for the Indian market; although the
new Bankruptcy law/NPA-IBC process may be easier for the company to wind
down and go for faster liquidation, in most of the cases, even a
liquidation may not result in the actual resolution of the NPA; Banks
also do not want liquidation, but actual resolution and they are also
taking a coordinated action.
A tepid credit growth around 5-6% may not be good for the overall Indian
banking system, specially the PSBS.
Domestic market may be also confused today after reports that Govt may
bring an ordinance to increase the GST/cess on luxury cars from the
present 15% to 25%; for a truly successful GST implementation, the
multiplicity of taxation rates may be a tough challenge.
In another development, India’s Skymet today commented that overall
monsoon this year might be just normal (95-96% of LPA); whatever be the
rest of the monsoon, recent abnormal surge in prices of some vegetables
(tomato, onion and milk products) may make the inflation hawk RBI unhappy.
Today Nifty was supported by Tata Steel, which soared by over 4% to
touch the 600 milestone on hopes of a dream Q1 show later in the day;
apart from that, SBI also helped the index immensely on earnings
optimism; result to be out by this week. Nifty was also helped by BPCL
(OMC optimism), Adani Ports, ICICI Bank, BOB and L&T.
Nifty was dragged by RIL (buzz of M&A with Tata Tele) HDFC duo,
Infratel, NTPC, Tata Motors (subdued JLR sales), Pharma & IT (strong
INR), FMCG & Axis Bank.
Elsewhere, Australian market (ASX-200) closed around 5774, up by almost
0.93%, on some strength in AUD after AU construction PMI for July
flashed as 60.5 vs 56 (prior) and an upbeat energy, materials and banks
& financials.
Banks in AU, including the CBA reversed some loses of the weekend, after
CBA indicated that a software coding error may be responsible for some
unauthorized cash deposits above the AUD 10K limit in some of its cash
deposit machine. On the Friday weekend, AU banking regulator has accused
the CBA under anti money laundering act.
Japan (Nikkei-225) is also closed lower around 19952; down by almost
0.38% tracking muted USD in liquidity starved early Asian session.
Today, a former well known BOJ dove (Kiuchi) commented that BOJ is
playing a riskier game with QQE without any serious focus on the QE
tapering; ongoing JGB scarcity and various other limits/factors may
force BOJ to normalize its policy well before the elusive 2% inflation
target.
Toshiba has helped the Nikkei-225 to some extent today after reports
that trouble with its auditor may end soon.
China (SSE) was in negative around 3262, (-0.33%) on concerns of NK
geo-political tensions, tech valuation & outlook and ongoing tightening
by Chinese regulator. Today, PBOC again drained out around 60 bln Yuan
and made USDCNY relatively stronger at 6.7228 vs 6.7132 tracking as an
upbeat US jobs report on the Friday weekend.
Hong-Kong (HKG-33) was trading around 27665, up by almost 0.30% and
South Koran Kospi was up by almost 0.5% on some moderation in USD this
morning; a weaker USD is generally positive for the export heavy Asian
indexes.
Subdued EU market after tepid German IIP data amid ongoing NK
geo-political tensions may have also affected the Indian market
sentiment today in the closing session and it sold off to some extent
after a trading in a narrow range for most of the days.
Overall, mixed earnings and upbeat miners (rally in iron-ore) may be
also affecting the EU market today with Stoxx-50 now around 3500
(-0.19%); DAX is trading around 0.46% lower on tepid economic data,
earnings and some rebound in EUR; but FTSE-100 is up by 0.14% as GBPUSD
gone lower amid ongoing Brexit squabbling and a dovish BOE.
Asian market update
<https://www.iforex.in/news/asian-market-resumed-week-mixed-tone-amid-higher-usd-tracking-blockbuster-us-nfp-report-ongoing-geo-political-tensions-and-mixed-q1-earnings-so-far-39837>:
FX market update
<https://www.iforex.in/news/eurusd-continues-hold-117-lackluster-usd-market-may-now-focus-us-ppi-cpi-after-blockbuster-nfp-39891>:
<https://2.bp.blogspot.com/-GPHjdHywBaI/WYitL2yZuBI/AAAAAAAAMoY/ZU0CuKsRVpM_JJF_RxdxOD8hESsaIlwBwCLcBGAs/s1600/SGX-NF-PATTERN-07-08-2017.png>
SGX-NF
<https://4.bp.blogspot.com/-EeCJLRmBnXQ/WYitPqtEfZI/AAAAAAAAMoc/jY9fFZubGUcb1YP8ycb7ltcmOPEfdjnYgCLcBGAs/s1600/BNF-PATTERN-07-08-2017.png>
BNF
--
Thanks & Regards,
Asis Ghosh
--
Kindly email stock reports at
STOCKRESEARCHER@googlegroups.com
For sharing knowledge
-- NIFTYVIEWS.COM NOW A FREE OPEN SOURCE WEBSITE.
http://www.niftyviews.com/
Disclaimer :-
"The opinions expressed by the members on this board are based on
their individual experience and perceptions and to share information
with other members with the best of intentions to help fellow members
in investment decisions as equity investment is a risky venture.The administrator of
www.Niftyviews.com just provide a platform for the authors to express their opinion
and take no guarantee for the genuineness of the same."ANY member of this forum
doesnt prepare or publish any research report; or ii. provide research report; or
iii. make 'buy/sell/hold' recommendation; or iv. give price target;
---
You received this message because you are subscribed to the Google Groups "Niftyviews.com" group.
To unsubscribe from this group and stop receiving emails from it, send an email
to stockresearcher+unsubscr...@googlegroups.com.
For more options, visit https://groups.google.com/d/optout.