*Market Mantra: 02/05/2017 (08:30)*
*SGX-NF: 9350 (+19 points)*
*For the Day:*
*Key support for NF: 9335-9245*
*Key resistance for NF: 9425-9505*
*Key support for BNF: 22200-22100*
*Key resistance for BNF: 22450-22525*
As par early SGX indication, Nifty Fut (May) will open around 9350,
slightly in green following tepid global cues after subdued China PMI &
various US economic data. After terrible US GDP data on Friday, overall
US economic data including Fed’s favourite inflation deflator (PCE), ISM
Mfg/PMI, consumer sentiment all came downbeat. But, passage of temporary
spending bill, hopes of passage of the Trumpcare bill and US TSY Sec’s
jawboning about a longer term (30 yrs) TSY Bond has kept the USD/US bond
yields & risk trade in some momentum. All eyes will be on the Fed meet
tomorrow to gauze their appetite for a June rate hike or not considering
the recent set of tepid US economic data. As of now, FFR is still
showing around 70% of a June rate hike probability; Friday’s NFP job
data may also help the market in this regard.
In the morning today, China’s Mfg PMI (Caixin) came as terrible at 50.3
for April against estimate of 51.2 (prior: 51.2). This PMI data just
above the boom/bust line of 50 along with Sunday’s official PMI may also
indicate China may be cooling down a bit following various
regulatory/PBOC tightening and control over its shadow banking.
April PMI data so far is subdued not for China, but also across the Asia
& US also; thus the overall market sentiment is not so upbeat
considering some doubt about global reflation trade going on for the
last one year. Also, lingering concern and various “war of words”
regarding the NK issue may have kept the market extremely cautious as NK
may not be a case for “one off” bombing by US; it may turn into a
serious lengthy warfare, if not dealt properly.
Back to home, after mixed set of Q4FY17 report cards & April auto sales
data so far, all eyes may be also on the Mfg PMI (April) today (prior:
52.5) and also on the ongoing development on banking NPA resolution,
fate of PSBS consolidation and further updates on GST. There is a strong
buzz from various policy makers including RBI to privatize some of the
fragile PSBS; although if implemented, this may be a significant banking
reform in India, but the proposal may also face political backlash not
only from the oppositions, but also from Govt’s own stakeholders.
*Hints for actionable trading ideas for NF & BNF:*
*Time & Price action suggests that, Nifty Fut (May) has to sustain over
9425 area for further rally towards 9475-9505 & 9550-9600 in the short
term (under bullish case scenario).*
*On flip side, sustaining below 9405-9385 area, NF may fall towards
9335/05-9270/45 & 9225-9175 area in the short term (under bear case
scenario).*
*Similarly, BNF has to sustain over 22450 area for further rally towards
22525-22675 & 22800-23000 area in the near term (under bullish case
scenario).*
*On the flip side, sustaining below 22400 area, BNF may fall towards
22200-22100 & 22000-21700 area in the near term (under bear case scenario).*
<https://3.bp.blogspot.com/-3O4AMsBrwcI/WQgDiuprXHI/AAAAAAAALi8/Q5DeFEJcMzE9rj5mx2GS6DH5f1vYyu9ogCLcB/s1600/SGX-NF-02-05-2017.png>
SGX-NF
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Thanks & Regards,
Asis Ghosh
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