*Market Wrap: 17/03/2017 (18:00)*
*NSE-NF: 9168 (-8 points; -0.09%)*
*NSE-BNF: 21238 (-73 points; -0.34%)*
*Time & Price action suggests that, Nifty Fut (March) has to sustain
over 9235 area for further rally towards 9275-9350 & 9425-9550 and
9605-9685 by next week/ in the short term (under bullish case scenario).*
*On the other side, sustaining below 9215-9195 zone, NF may fall towards
9145-9075 & 9035-8995 and 8955-8865 area by next week/ in the short term
(under bear case scenario).*
*Similarly, BNF has to sustain over 21400 area for further rally towards
21500-21675 & 21855-21950 and 22050-22150 area by next week/ in the near
term (under bullish case scenario).*
*On the other side, sustaining below 21350 area, BNF may fall towards
21140-21000 & 20900-2070 and 20450-20300 zone by next week/ in the near
term (under bear case scenario).*
Nifty Fut (March) today closed around 9168, almost flat after hitting a
new life time high of 9213 in the opening minutes (gap up) and
subsequent day low of 9165; it’s a new record closing high for the index
today primarily supported by ITC (+4.77%) after Govt kept neutral rate
of GST for the cigarette products. Analysts are quite optimistic that it
will eventually help for more consumption of cigarettes as low earners
(“poor people”) may shift to cigarettes from “Beddi”, where GST rate has
been not decided as of now. But, considering the huge cottage industry
of “Beddi” and significant employment attached with it, Govt may not
apply any “sin tax” on that tobacco product.
Yesterday’s approval of various GST bills are on the expected direction,
but some GST “sin tax” was applied as 15% on some “sin goods” like
aerated beverages (cold drinks) and some models of expensive cars, which
was less than market expectation and together with that, a real
probability of a July’17 launch of GST has boosted the sentiment of
Indian market today and Nifty opened at a record high of above 9200.
Apart from ITC, market was also supported by IT counters today as USD
rebounded after last few days fall.
But, domestic market sentiment was turned slight depressed today after
some market buzz that overall figure of Q4FY17 advance tax may not be
encouraging as its up only by 6% (??); we may hear some DeMo blues
again, if this unconfirmed report is turned true.
Globally, after Fed hike market rallied as Yellen sounded less than
hawkish in her stance for future path of rate hikes in 2017. Although,
another 2-3 hikes to bring the Fed rate from present 1% to 1.5-1.75% by
next 12 months (March’18) may be normal for US economy & Fed, it may not
be good for EM & also for the Indian market. Post Fed hike, which was
also highly expected, the USD fall as if Fed has not hiked rate, but cut
the same; it was just a counter reaction from a overcrowded long USD
trade (fade the trade or buy the rumour & sale the fact). USD is bound
to rally again, simply because of divergent monetary policy action
between Fed & other major G-20 central bankers (BOJ/ECB).
If Fed goes on its scheduled 2-3 hikes in next 12 months, then other
central banks, including RBI is bound to react to keep the interest rate
& bond yield differential at present optimum level. EM central bankers
may have also to respond fast to prevent outflow. Yesterday, after Fed
hike, PBOC responded by some hike in its reverse repo/OMO/MLF/SLF
facilities and some members of BOE & ECB were also sounded somewhat
hawkish. ECB may hike its deposit rate and also the main refinance rate
before Dec’17 end of QE. BOJ may also not introduce any fresh QQE, but
will maintain the present accommodative/neutral stance to keep its YCC
at around 0%, till CPI goes around 2% (??).
All eyes may be now on G-20 meeting official draft, where US is expected
to put some pressure on its EU partners, Japan, China to desist from
“currency manipulation” , whereas all the other nations are expected to
question Trump’s “America Only” trade policy and border tax. Also, tax
co-operation between different countries may be on the high priority
agenda. Also, meeting between Trump & Merkel in the weekend may be
interesting to watch.
Development of Brexit may be also watched as UK will go for official
A-50 invocation by this month. On the other side, EU imay not be agree
to start official negotiations till June'17 and till UK pays its
"seperation fees" (??).
For the Indian market, after the highest ever closing in this "historic"
week, market may try to find some fresh drivers; otherwise some time &
price correction may come as alsmost all the "good news" may have been
discounted/digested by the market for the near term.
*Watch 9275-9035/8995 zone in NF closely for any breakup or breakdown
for next week. *
<https://4.bp.blogspot.com/-AdS31H1-yLU/WMv0D1YGUqI/AAAAAAAAK80/f9GLVsqMk6Mp5k8qy3dhOFxpQksbUP55ACLcB/s1600/SGX-NF-PATTERN-17-03-2017.png>
SGX-NF
<https://4.bp.blogspot.com/-6Cqi8EqfBA8/WMv0INLG17I/AAAAAAAAK84/9NwftyeTQ4cJLtgGfLQz_BVPwJ3iAtXcgCLcB/s1600/BNF-PATTERN-17-03-2017.png>
BNF
--
Thanks & Regards,
Asis Ghosh
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