Market Mantra <https://www.iforex.in/news>: 20/09/2017 (09:00)
SGX-NF: 10160 (-8)
For the Day:
*Key support for NF: 10150-10090*
*Key resistance for NF: 10205-10250*
*Key support for BNF: 24900-24800*
*Key resistance for BNF: 25150-25250*
*Hints for positional trading:*
*Hints for positional trading:*
*Technicals indicate that, NF has to sustain over 10205 area for further
rally towards 10250- 10325 & 10385-10455 area in the short term (under
bullish case scenario).*
*On the flip side, sustaining below 10185 area, NF may fall towards
10150-10090 & 10050-9975 area in the short term (under bear case scenario).*
*Similarly, BNF has to sustain over 25150 area for further rally towards
25250-25350 & 25585-25785 area in the near term (under bullish case
scenario).*
*On the flip side, sustaining below 25100 area, BNF may fall towards
24900-24800 & 24600-24500 area in the near term (under bear case scenario).*
As par early SGX indication, Nifty Fut (Sep) may open around 10160,
almost flat tracking muted global/Asian cues on concern of a dovish Fed
coupled with Trump’s rhetoric to annihilate the “rocket man Kim” & NK
completely if US or any of its allies is attacked by the hermit state.
But on more serious note, US defence sec yesterday has signalled that US
may shoot down any further missile launched by NK even if it’s not
directed towards US or Guam. All eyes now may be on the weekend response
of Kim after Trump’s veiled threat and as par some reports, NK may be in
the final stages of nuke enabled ICBM development and in that scenario,
they may require more such tests in the coming days.
Today all eyes may be on the economics rather than politics; a Fed BS
tapering may be already discounted by the market, but actual tapering
details (quantity & duration) may now matter most. In all probability,
Fed may maintain its previous dot-plots of a Dec’17 rate hike
probability in order to maintain its credibility, everything being
equal. But, Yellen’s presser (Q&A) may be most important today to gauze
Fed’s perception of a Dec rate hike.
FFR is now indicating below 50% probability of a Dec move by Fed; i.e.
equivalent to neutral or no rate hike; a dovish Fed may be negative for
USD, which in turn may not be good for the export heavy Asian & EU markets.
Although, India being a import oriented economy, it may benefit from a
lower USD but as Nifty earnings is heavily dependent on export by almost
60%, a lower USD may be also not good for the Indian market also.
*Overnight, US market*closed at another record high as “usual”; DJ-30
gained by around 0.20%, while S&P-500 closed almost flat at 2507
(+0.11%) and NASDAQ was almost unchanged (+0.10%). US market was helped
by banks & financials yesterday on higher US bond yields, which is
favourable for their business models. Also, telecoms have helped DJ
yesterday on merger news between T-Mobile & Sprint.
*USD/US bond yields*got some boost yesterday after Trump NK rhetoric on
talks of an imminent US tax reform plan and a Reuter’s economist survey,
which is indicating that almost 76% is expecting a Dec’17 rate hike by
Fed and more importantly, 45% of the economists said they see little
connection between unemployment & inflation because of changing scenario
of automation, globalization etc (structural reasons).
Back to home, *Indian market* (Nifty-Fut) after opening almost flat may
focus on the telecom after controversial IUC reduction which is highly
favourable to R-Jio; but this issue may ultimately be settled by SC and
may also be negative for Govt revenue from telecom sector apart from
risks of another huge telecom NPA for the banks.
Market may also focus on Govt’s talks of fiscal stimulus to revive the
slowing Indian economy and huge amount of GST input tax credit claims of
around Rs.65000 cr stuck with the Govt; business & export may be
suffering significantly for this blockage of working capital.
<https://3.bp.blogspot.com/-s1CVZw0GttU/WcIEkAoVo9I/AAAAAAAANK0/G62VBZzCUXUiXuPCRPA54GUxLxrhRbcnACLcBGAs/s1600/SGX-NF-20-09-2017.png>
SGX-NF
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Thanks & Regards,
Asis Ghosh
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