*Updated: 08:20*
*
*
SGX-NF: 10760 (-4; -0.03%)
Expected BNF opening: 26200 (-0.05%)
SPX-500: 2723 (+0.25; +0.01%)
*Note:*Flat opening on subdued global cues amid surging US bond yields
hovering around 3.10% and above the previous technical resistance levels
of 3.05% coupled with ongoing US-China trade war as well as renewed
North Korean “nuke war” tensions.
The Indian market may be on edge despite market favourite BJP has been
invited to prove its majority within 15 days and the new government
under Yeddyurappa will be sworn in shortly as SC register bench refused
to put any stay on it, but called for the Yeddyurappa’s letter to the
Karnataka governor and scheduled the hearing of the JDS+INC petition on
Friday.
Thus there will be some more political uncertainty (suspense) in the
whole issue as SC may raise question over the JDS allegation of MLA
“horse trading” and Rs.100 crores (0.10 billion) offer (and a cabinet
post) to each JDS MLA to support the BJP either directly through voting
or indirectly through abstain on the floor of the house. BJP will need
at least 8 more MLA (s) from JDS+INC post-poll coalition and 2
independent MLA(s) to show its majority in the house.
As a reminder, JDS+INC has submitted a list of 117 MLA(s) to the KA
governor against BJP’s 104 and thus the JDS/INC coalition petitioned the
SC on the ground that as a post-poll alliance majority, the governor
should have invited them first to prove the majority on the floor of the
house rather than the BJP as the largest party (as par recent precedents
in Goa, Manipur states, where BJP post-poll alliance has got the
advantage rather than the INC as the largest party).
The “risk-on sentiment” may be affected due to rising incidence of such
“horse trading” culture in the Indian democracy and the “power of money”
amid rising influence of small regional parties. Markets do not like
such political uncertainty for long, which may bring “policy paralysis”
and “political populism”.
Apart from politics, all eyes will be also on the economics (earnings,
macro data, RBI, NPA resolution) in the coming days. So far Q4 earnings
are mixed and the valuations are stretched, whereas macros such as the
elevated and sticky nature of core inflation may keep RBI in the hawkish
hold mood in June, while NPA resolution pace is slow and the NCLT path
is going for more litigation.
*Fut-I (Key Technical Levels)*
Support for NF:
10730/10710-10685/10625-10570/10530-10485/10425
Resistance to NF:
10830/10875-10935/10975*-11055/11150-11195/11375
Support for BNF:
26275/26125*-26000/25800-25600/25300-25100/24950
Resistance to BNF:
26700/26825*-27000/27150-27300/27500-27700/27975
Support for SPX-500:
2715/2695*-2675/2655-2625/2610
Resistance to SPX-500:
2740/2750*-2775/2805-2820/2855
*Technical View (Nifty, Bank Nifty, SPX-500):*
Technically, Nifty Fut-I (NF) has to sustain over 10830 for a further
rally towards 10875/10935-10975/11055-11150/11195-11225/11375 in the
short term (under bullish case scenario).
On the flip side, sustaining below 10805 NF may fall towards
10730/10710-10685/10625 and further 10570/10530-10485/10425 in the short
term (under bear case scenario).
Technically, Bank Nifty-Fut (BNF) has to sustain over 26700 for a
further rally towards26825/27000-27150/27300 and further
27500-27700/27975in the near term (under bullish case scenario).
On the flip side, sustaining below 26650-26550 BNF may fall towards
26275/26125-26000/25800 and further 25600/25300-25100/24950 in the near
term (under bear case scenario).
Technically, SPX-500 now has to sustain over 2750 for a further rally
towards2775/2805-2820/2855 and further 2880-2895in the near term (under
bullish case scenario).
On the flip side, sustaining below 2740, SPX-500 may fall towards
2725/2715 and2695/2675-2655/2625 and further 2610-2590in the near term
(under bear case scenario).
*Valuation metrics:*
*
*
Nifty-50: 10741; Q3FY18 EPS: 403; Q3FY18 PE: 26.65; Avg FWD PE: 20; Proj
FY-18 EPS: 418; Proj Fair Value: 8360
Bank Nifty: 26182; Q3FY18 EPS: 807; Q3FY18 PE: 32.44; Avg FWD PE: 20;
Proj FY-18 EPS: 961; Proj Fair Value: 19220
SPX-500: 2722; TTM Q4-2017 EPS: 111; TTM PE: 24.52
*GLOBAL MARKET: <https://www.iforex.in/analysis>*
FOLLOW ME: TWITTER.COM/ASISIIFL
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SGX-NF
<https://2.bp.blogspot.com/-9qt_4tz6k34/Wvz_D6bBPtI/AAAAAAAAP_Y/t7yrdhB17S0aaAvhutYbLN8kH34RmKBsQCLcBGAs/s1600/BNF-PATTERN-17-05-2018.png>
BNF
<https://2.bp.blogspot.com/-lQaoLJFeqcE/Wvz_IhnCCOI/AAAAAAAAP_c/Lq7LaUOhCWs11AnIQrWBjOmF6jEmLmS-wCLcBGAs/s1600/SPX-500-PATTERN-16-05-2018.png>
SPX-500
<https://2.bp.blogspot.com/-TrXp-IM91e4/Wvz_OYyOHQI/AAAAAAAAP_g/dTTuBXXbA7Y_xcCAWqxeHmNil-KPYy3vACLcBGAs/s1600/EURUSD-PATTERN-16-05-2018.png>
EURUSD
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