*Market Wrap: 29/05/2017 (17:00)*
*NSE-NF (June): 9610 (+34; +0.36%) (TTM PE: 24.338; Near 2 SD of 25; TTM
EPS: 394; NS-9605)*
*NSE-BNF (June): 23130 (-126; -0.54%) (TTM PE: 31.85; Above 3 SD of 30;
TTM EPS: 728; BNS-23183)*
*For 30/05/2017:*
*Key support for NF: 9600/9580-9530*
*Key resistance for NF: 9680-9770*
*Key support for BNF: 23050-22800*
*Key resistance for BNF: 23275-23400*
*Time & Price action suggests that, Nifty Fut (May) has to sustain over
9680 area for further rally towards 9725-9770 & 9825-9865 in the short
term (under bullish case scenario).*
*On flip side, sustaining below 9660-9640 area, NF may fall towards
9600/9580-9530 & 9475-9425 area in the short term (under bear case
scenario).*
*Similarly, BNF has to sustain over 23275 area for further rally towards
23400/23500-23650 & 23875-24000 area in the near term (under bullish
case scenario).*
*On the flip side, sustaining below 23225 area, BNF may fall towards
23050-22800 & 22650-22450 area in the near term (under bear case scenario).*
Nifty Fut (June) today closed around 9610, almost up by 0.36% after
making an opening session low of 9544 and day high of 9640. Indian
market today opened in a subdued note amid tepid global cues in a
holiday thinned market following another Scud missile launch by NK; UK,
USA & China is closed today for their holidays.
US market closed almost flat at around record high closing following
better than expected Q1 GDP revision and other mixed economic data.
Market may be optimistic that despite soft US economic data, USA &
global economy may withstand gradual Fed rate hike & B/S tightening. FFR
is still showing around 80-90% of a June rate hike as there is still no
indication for a pause by various Fed speakers; all eyes may be now on
Friday’s NFP as its may be a perfect excuse for Fed to be on hold in
June(if the NFP data is terrible). Fed may also consider growing US
political risks, which may flare again this week as Trump returns from
his 1^st “historic” foreign & G7 tour; Trump is back again with his
usual “Twitter Tantrum”, which may be the biggest source of market
volatility in the recent months.
Also, concern for UK election with decreasing lead for the conservative
party (UK PM May) may be a cause of subdued global sentiment; although
May is supposed to win by at least 5% margin. A thin margin for May in
the forthcoming UK election next week may be bad for “soft Brexit”.
Back to home, after 3^rd anniversary of Modinomics rally, Indian market
today focused more on NPA policy, GST, monsoon and macro data (PMI/GDP)
in this week amid mixed Q4 report card (so far). GST, being a “one
product, one national tax” instead of the original concept of “one tax,
one nation”, may be a cause of concern for all the stakeholders for its
multiple taxes and lack of clarity on the input tax credit issue; thus
GST disruption fear may be weighing on the broader market as it could
affect the Q2FY18 earnings adversely with its schedule launch on 1^st July.
Also, lack of clarity of the NPA policy despite marathon meeting on
Friday with the RBI along with all the banks/ARC may be a cause of
concern for the market. Moreover, bond & loan default market buzz of
RCOM may have dampened the overall market sentiment today as the
stressed ADAG group shares were all down significantly, despite
management’s deleveraging assurance (RCOM will sell the real estate
assets in New Delhi to repay debt !!).
Nifty was also under pressure today from Pharma shares following horror
results & tepid guidance from Sun Pharma and overall US FDA concern; but
Cipa bucked the trend and closed almost 3% higher as value buying/short
covering (?) may be slowly emerging for this bitten down sector
(Nifty/overall market is around life time high, but Pharma index is at
lifetime low).
Nifty was under further pressure for Adani Ports today, which was down
by almost 6% amid royalty payment issues of its AU coal project. PSBS
(SBI/BOB) and some of the private banks (Yes/ICICI/Axis) were also under
pressure for NPA policy concern and huge debt of telecom sector, which
may be turning into a major NPA/NPL/stressed asset for the banks in the
coming days as a result of R-Jio led disruption in the telecom sector.
IT, Cement & Metals were also under good pressure today.
But, domestic marker also took some support from the IMD, which is
forecasting an imminent onset of SW monsoon at Kerala, which may be
further expanded to other parts of the country within next two weeks.
Thus, better (normal) monsoon (in advance) with signs of an even
distribution of the same all over the country is boosting the overall
market sentiment significantly. Any disappointment from the same may be
also a cause for worry for the market. Due to better monsoon prospect,
today FMCG & auto counters has supported the market significantly; also
upbeat result of ITC has helped the counter & the market apart from RIL
& Powergrid.
Overall, powers of liquidity from both FPIS & DIIS are helping the
Indian market to a great extent despite stretched valuation on the
assumption of higher earnings growth for FY-18; although overall Q4FY17
report card may be still mixed. Stock selection with earnings visibility
and good debt profile along with a sound management may be the keys in
the days ahead.
Meanwhile, although Draghi is sounded a little upbeat about prospect of
EU economy, it seems that he/ECB has no plan for any QE tapering in the
near term; thus overall Draghi’s stance may be dovish and quite
divergent to Fed’s hawkish stance (unless Yellen surprised the market
with a June hold). Also, Draghi & Co may not be comfortable to let
EURUSD rally further towards 1.15-1.20 area as in that scenario, years
of QE may be in jeopardy.
*Technically, EURUSD (1.1180) has to sustain over 1.11459 area;
otherwise it may fall further towards 1.0840-1.07610 (1.07) ahead of
NFP/Fed; only sustaining above 1.13 (1.1270-1.12930), EURUSD may rally
further for 1.16450-1.1879 & 1.20 area in the coming days.*
<https://3.bp.blogspot.com/-Lv_OtHqH_Ik/WSwqK-PMC_I/AAAAAAAAL34/dZRrCrdpNgQE2gZrbLNwSv9TFcTff-KZgCLcB/s1600/SGX-NF-PATTERN-29-05-2017.png>
SGX-NF
<https://3.bp.blogspot.com/--__RLOxnAoI/WSwqPjXxHNI/AAAAAAAAL38/yKzs8SURaWQYzneqlq_FDIUxgH8cZ3AQwCLcB/s1600/BNF-PATTERN-29-05-2017.png>
BNF
<https://4.bp.blogspot.com/-fKSCreploQY/WSwqT4apnmI/AAAAAAAAL4A/mBIM0L7Ip9sInIM26oLoUa4i3Xr61qm_QCLcB/s1600/EURUSD-29-05-2017.png>
EURUSD
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Thanks & Regards,
Asis Ghosh
https://www.blogger.com
FOR MORE DETAILS & ADVISORY SUPPORT:https://t.me/MarketLive
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