Market Mantra <https://www.iforex.in/news>: 15/09/2017 (09:00)
SGX-NF: 10070 (-47)
For the Day:
*Key support for NF: 10075-10025/9975*
*Key resistance for NF: 10105/10160-10205*
*Key support for BNF: 24700-24500*
*Key resistance for BNF: 25050-25150*
*Hints for positional trading:*
*Technicals indicate that, NF has to sustain over 10160 area for further
rally towards 10205-10250 & 10325-10385 area in the short term (under
bullish case scenario).*
*On the flip side, sustaining below 10140 area, NF may fall towards
10105/10075-10025 & 9975-9915 area in the short term (under bear case
scenario).*
*Similarly, BNF has to sustain over 25050 area for further rally towards
25150-25250 & 25350-25500 area in the near term (under bullish case
scenario).*
*On the flip side, sustaining below 25000-24975 area, BNF may fall
towards 24700-24500 & 24400 -24300 area in the near term (under bear
case scenario).*
As par early SGX indication, Nifty Fut (Sep) may open around 10070, gap
down by almost 47 points after NK “tested” another ICBM early in the
morning today over JP airspace towards Guam (?) direction following its
threat yesterday to “sink JP & reduce US mainland into ashes & darkness
by a Nuke”.
But overall risk aversion flows to the safety of heavens (Yen, CHF,
Gold, Bonds) may be quite muted till now as this launch was in expected
line as NK was reported for preparing another ICBM for the last few days
after US/UN sanctions. Market may be also gradually habituating for such
frequent NK provocation & ongoing “war of words” between Kim & Trump
until some serious miscalculations by both the sides.
So far, today’s US reaction is very limited & measured calling for China
& Russia for more “pressure” on NK and Trump has not tweeted till now
his rhetoric about the latest NK ICBM launch. But, this whole NK issue
may also bring some trade protectionist & sanction measure against China
for not agreeing to an all out oil embargo on NK. As par China, this is
not possible as it may pose more risk from NK at its border and due to
porous border; an all out sanction may not be so much effective.
Thus, until “war of bullets/nukes”, all such “regular” NK provocations &
subsequent market volatility may be an opportunity for both traders &
investors. Kim/NK provocations may be also positive for US defence
industry as JP& NK has already increased their defence budget to
“combat” NK, which may be also good for the economy of JP & SK (fiscal
stimulus). Frequent NK missile & nuke games may be also helping the US
economy & Trump to keep USD lower for its export benefit & imported
inflation.
Overnight *US market closed* mixed over fear of another NK ICBM launch
despite an upbeat US CPI data yesterday; USDJPY was unable to sustain
over the 111 mark, equivalent to 10YUSTSY yields of 2.20%. Also, some
confusion about Trump’s tax deal with some of his opposition DNC members
at a WH dinner party may have affected the overall US market sentiment
yesterday.
DJ-30 closed around 0.20% higher, while S&P-500 lost 0.11% & closed
around 2496 and NASDAQ dragged by almost 0.48%; Boeing has helped DJ
yesterday after analyst (DB) upgrade of this aerospace & defence stock.
But techs, consumer discretionary were pressure, while energies has
helped by some extent. *US Stocks Fut (SPX-500)* is now trading almost
flat around 2494 (-0.07%) after some initial drops tracking NK ICBM.
Overall, market may be quite cautious after hawkish hold by BOE
yesterday, indicating an imminent rate hike move by next 3-6 months to
combat the higher trajectory of UK inflation, now around 3%, if overall
economic data looks good (i.e. data dependent).
Fed & ECB are also poised to announce their QE tapering soon and BOC has
already hiked twice in the last two meets. A global QT may not be good
for the risk assets in 2018 and yesterday’s sudden improvement in US
core CPI may also help Fed to keep its hawkish tilt in the coming
months. Even if Fed does not hike rate in Dec’17, its BS tapering may
also help US bond yields to rise as Fed will sell its QE bond holdings
in the market (although it may be very gradual @10 bln/month for next 10
years).
Back to home, *Indian market* (Nifty Fut) after opening gap down may try
to cover but EU market reactions may be also keenly watched. Overall, it
now seems that FIIS are in selling mode for rising geo-political
tensions, global QT bandwagons and coupled with that stretched
valuations, muted Q1 earnings, falling GDP & rising inflation,
widespread farm loan waivers across the states, NPA and concern of
fiscal imbalance in India may be also worrisome despite some green
shoots and attraction of 4-D (Modinomics).
<https://1.bp.blogspot.com/-mkD8KZ1D8Ts/WbtlS5ULHQI/AAAAAAAANHQ/Bjz1rMYk8jc2hhWYP1RnVSqTGn8idDzvwCLcBGAs/s1600/SGX-NF-WK-15-09-2017.png>
SGX-NF
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Thanks & Regards,
Asis Ghosh
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