*Market Wrap: 26/05/2017 (17:00)*
*NSE-NF (June): 9569 (+73; +0.77%) (TTM PE: 24.35; Near 2 SD of 25; TTM
EPS: 394; NS-9595)*
*NSE-BNF (June): 23245 (+212; +0.92%) (TTM PE: 32.09; Above 3 SD of 30;
TTM EPS: 728; BNS-23362)*
*For 29/05/2017:*
*Key support for NF: 9550-9490*
*Key resistance for NF: 9600-9680*
*Key support for BNF: 23200-22950*
*Key resistance for BNF: 23375-23500*
*Time & Price action suggests that, Nifty Fut (May) has to sustain over
9600 area for further rally towards 9680-9770 & 9865-10000/10100 in the
short term (under bullish case scenario).*
*On flip side, sustaining below 9580-9550 area, NF may fall towards
9490-9450 & 9410-9330 area in the short term (under bear case scenario).*
*Similarly, BNF has to sustain over 23375 area for further rally towards
23500-23650 & 23875-24000 area in the near term (under bullish case
scenario).*
*On the flip side, sustaining below 23325 area, BNF may fall towards
23200-22950 & 22800-22600 area in the near term (under bear case scenario).*
Nifty Fut (June) today closed around 9569, almost 0.77% higher after
making an opening session low of 9475 and late day high of 9586; Nifty
Spot & Sensex was able to scale the historic milestone of 9600 & 31000
on this 3^rd anniversary of BJP/NAMO Govt in the office.
Since May’2014, Nifty has rallied by over 30% in this 3 years supported
by huge fund flows, stable macro economy & INR, incremental reforms,
huge public investments (Govt capex) in infrastructure & rural
economy/social sector, a corruption free Govt despite challenges of
various global jitters, DeMo, tepid private investments and legacy
issues of huge banking NPA and subdued earnings. Despite stretched
valuation, appeal of 4-D & Modinomics combination may be attractive
enough for the huge fund flows both from the FPIS & DII and domestic
retail investors.
Indian market today opened in almost flatfollowing mixed global cues.
Overnight US market closed in positive (+0.34%) in another record high
buoyed by upbeat earnings by some retail giants and optimism about tech
& consumer discretionary sector. Oil was in roller coaster mode and
eventually fall below 50-49 mark as OPEC-NOPEC production cut agreement
of 9 months may be already discounted by the market, going by the recent
rally (another typical example of buy on rumour & sell on news/fact).
Also, some section of the market may be expecting a deeper cut which has
not happened at all. Fall in Oil below $50 is also helpful for the
Indian market.
But, USD/US bond yields were subdued as market is slowly realizing that
Fed may not hike in June amid soft US economic data & political
turbulence; instead Fed is now talking about gradual tapering of its B/S
(QE bonds), which may be more adverse effect than a rate hike.
In the early morning Asian session, USD (risk trade) came under renewed
pressure after news that, Trump’s son-in-law is under FBI scanner for
the alleged Russian involvement issue in the US election. USDJPY, which
may be a key indicator of risk trade, came under further pressure after
Trump’s comment about NK issue. Also, some dovish comments by Fed’s
Bullard today has dampened the USD sentiment (“Fed is very close to
where it needs to be on policy rate”).
Elsewhere, Japan was trading lower following strength in JPY and less
than expected core CPI. But China market was upbeat despite recent
rating downgrade on suspected Govt/PBOC intervention in currency & stock
market (Chinese Govt may be buying China stocks!!).
A weak USD may be also good for the overall Indian economy, but may not
be as good for Nifty as almost 40% of the Nifty components have
significant export income.
EU markets were in some pressure today as a result of Trump’s another
comments about German carmakers (“too many” sales in US) which he is
“going to stop”. But, FTSE was trading in positive today amid some fall
in GBPUSD after latest opinion poll has shown declining approval rate
for the British PM (May).
Overall, dovish FOMC minutes this week may be an indication that Fed
will not hike in June and going forward, it may not hike further at all
in 2017, if the incoming US economic data do not surprise on the upside.
Also, US political turmoil may be another prime factor behind Fed’s
dovish tone going forward; the whole idea of Trumponomics may be in
doubt now. Thus, USD/US bond yields are going lower and investors (FII)
are again flocking an attractive EM destination like India (sell the DM
& buy the EM idea may be again gathering strong momentum).
Nifty was today supported by Tata Steel (optimism about JV with German
co) & other metals space (Chinese rebound in iron ore), Oil & gas
(RIL/BPCL for fall in crude oil), ITC (upbeat Q4 results), Private
Banks, cements, autos.
Nifty was dragged by Pharma (tepid earnings & guidance along with US FDA
issues), PSBS & TCS (weak USD & end of buyback offer).
PSBS were in pressure today after reports that Govt may ask them to
increase lending/exposure to the socially backward sections and all the
social sector schemes. Govt may also ask them to increase their retail
lending, housing loan and a definitive plan for NPA resolution and
credit growth.
As par some reports, Govt may also go for general election in 2018, one
year in advance, so that it coincides with the state elections. Thus,
Govt may be readying itself for the 2018 election by focusing more on
social sectors.
Meanwhile, US Q1 GDP (2^nd revision) just flashed as 1.2% from 0.7%
(expectations 0.9%) supported by stronger spending/capex; but dragged by
corporate profits (-2.5%; prior: 2.3%).
Also, core durable goods order (Apr-MOM) came as -0.4% (estimate 0.5%;
prior: -0.2%) dragged by lack of new orders. *Overall, these mixed
economic data is slightly positive for USDJPY (111.25), which rebounded
from the 110 level; but may not be strong enough to break the
112.50-114.50 zone.*
<https://1.bp.blogspot.com/-2Yzdyu9ul54/WSg1AJd98SI/AAAAAAAAL20/1SSJ0-XHQNAwdUS6cFZ8NLbRh5TGto3cQCLcB/s1600/SGX-NF-PATTERN-26-05-2017.png>
SGX-NF
<https://3.bp.blogspot.com/-TqDM3GDmi-Q/WSg1GGdck7I/AAAAAAAAL24/LP1cZUPNqyY6QWhZ_x0ujyILa2Pu4wkrgCLcB/s1600/BNF-PATTERN-26-05-2017.png>
BNF
Article Courtesy: frontiza.com
<https://1.bp.blogspot.com/-vj1U222oMLM/WSg1nF67D5I/AAAAAAAAL3A/i2tw3uS1ygw5BRI6CENf1eOSSeYp65pMwCLcB/s1600/Frontiza-Logo.png>
--
Thanks & Regards,
Asis Ghosh
https://asisghosh.blogspot.in
https://t.me/MarketLive
--
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