Market Mantra <https://www.iforex.in/news>: 12/09/2017 (09:00)
SGX-NF: 10050 (+26)
For the Day:
*Key support for NF: 10045-10000/9980*
*Key resistance for NF: 10095-10115/10160*
*Key support for BNF: 24500-24300*
*Key resistance for BNF: 24775-24875*
*Hints for positional trading:*
*Time & Price action suggests that, NF has to sustain over 10115 area
for further rally towards 10160-10205 & 10250-10325 area in the short
term (under bullish case scenario).*
*On the flip side, sustaining below 10095 area, NF may fall towards
10045-10000/9980 & 9940-9850 area in the short term (under bear case
scenario).*
*Similarly, BNF has to sustain over 24775 area for further rally towards
24875-25050 & 25150-25250 area in the near term (under bullish case
scenario).*
*On the flip side, sustaining below 24725 area, BNF may fall towards
24600-24500 & 24300-24125 area in the near term (under bear case scenario).*
As par early SGX indication, Nifty Fut (Sep) may open around 10050, up
by almost 26 points tracking positive *global cues* on Irma & NK relief.
As Irma did not hit the US cities of Florida & Miami directly, estimated
damage may be now around $50 bln against earlier projection of $200-300
bln. Although overall damage from Harvey & Irma is huge, it’s still
manageable for the US economy and not catastrophic scenario for US.
Also, yesterday’s US sponsored UN sanction on NK may also be termed as
symbolic as it diluted significantly to accommodate China & Russia’s
concern by removing an all out oil embargo and freeze of NK’s important
foreign assets, such as Air Koryo & Kim’s personal financial assets.
The lighter NK sanction now includes a cap on crude & refined products
shipments to NK (2mpd/year), complete ban on LNG import and NK’s export
of its textile products. Notably, yesterday NK has issued a “dire
warning” to US just before the UN sanction that “US will face the
greatest pain & suffering it has ever gone through in its entire history
if the sanctions came to pass”.
Thus, market is in risk-on mode in this “great game of chickens” & “war
of words” and Trump is also happy to let this game going as NK
geo-political tension is now a great instrument to keep USD lower in
times of needs in order to make “America great again”. A weak USD may be
now good for US economy (export & imported inflation) and also for the
corporate earnings & the stock market.
*Overnight US market*closed above 1% on an average on strength of
insurers, financials, and tourism & power sector in a relief rally after
plunge on fears of Irma (short covering & bargain hunting). Also, Apple
helped the market before launching of its new i-Phone model coupled with
Teva (new CEO) & Tesla on optimism about e-car & a free software update
for extending the battery life for some of its cars in the Irma/Harvey
affected areas.
DJ-30 has gained around 1.19%, while S&P-500 closed around 2488, up by
almost 1.08% to end at record high and NASDAQ was in green by almost 1.13%.
US stock future (SPX-500) is now trading around 2485, almost flat
(-0.07%) ahead of EU market opening. Looking ahead, USD/US stock market
may be driven by Trump’s tax reform talk, US CPI & Fed stance on 20^th
Sep apart from geo-political issues. Technically, SPX-500 now need to
sustain over 2495-2505 area for further rally; otherwise it may again
came down.
Back to home, *Indian market* (Nifty Fut) is also now being driven by
positive global cues on relief from Irma & NK dooms day like tensions on
lack of any meaningful domestic triggers. Also, stretched valuation &
muted Q1FY18 earnings may be one of the primary reasons for lack of
follow up buying and thus market is hovering within a defined range.
Thus, market may look into Q2FY18 earnings & macro data trajectory after
some disappointment in Q1 and in that sense, today’s CPI (Aug) & IIP
(July) data may be important to have an idea about inflation vs growth
equations.
Indian CPI is expected to come as 3.20% for Aug against 2.36% recorded
in July; food inflation may surge in Aug; IIP is expected to come at
1.2% in July against -0.1% in June, marked by Pre-GST disruptions. But
irrespective of CPI, RBI may not cut again in Oct as it’s very rare for
the central bank to cut consecutively in its bi-monthly meet, everything
being equal.
Technically, consecutive closing above 10050 area, Nifty Fut may scale
10160 and even 10205 area by 14-15^th Sep, when NAMO will inaugurate
India’s dream project of “Bullet Train” with Abe (JP).
<https://1.bp.blogspot.com/-3y5psgcWVY0/Wbdyz2CyvkI/AAAAAAAANEM/dzBmL8wiW-ATsCDF6rme7qsomy4RcUKogCLcBGAs/s1600/SGX-NF-FIBB-12-09-2017.png>
SGX-NF
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Thanks & Regards,
Asis Ghosh
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