*Updated: 08:10*
*
*
SGX-NF: 10740 (-76; -0.70%)
Expected BNF opening: 26300 (-0.70%)
SPX-500: 2708 (-1; -0.04%)
*Note:*Gap-down opening on subdued global cues amid renewed North Korean
concern and surging US bond yields. The Indian market may face
additional stress on political uncertainty in Karnataka (KA) state
elections, where BJP/NDA fell short of a simple majority and got 104
seats against the requirement of 112, whereas INC got 78 and JDS+ got 38
seats with others at 2 seats. Thus JDS+INC post-poll alliance is
claiming to form the government with the strength of 116 seats.
Now all eyes will be on the KA governor whether he will invite the
single largest party (BJP) or the post-poll alliance majority (JDS+INC)
to form the next government (BJP will be positive for the market, while
JDS+INC being seen as negative for the risk-on sentiment).
Apart from the formation of the KA government, the market is worried
about rising poll influence of smaller regional parties in India (anti
BJP, anti/friendly INC) to fill the political vacuum out of INC
extinction as the party is fast becoming a “signboard” party despite
“very hard work” by RAGA. The problem is that at this point of time,
there is no alternative opposition leader against NAMO, but we may not
see the same 2014 “Modi wave” in 2019 and as such regional
politics/parties will make a greater influence on India’s policy matters
in the coming days.
The government will now also focus on higher rural spend, MSP and also
farm loan waiver and all these political populism coupled with higher
oil may keep the fiscal discipline question alive and we may see higher
Indian bond yields and higher USDINR, both of which may not be good for
the Indian economy and the market.
*Fut-I (Key Technical Levels)*
Support for NF:
10730/10715-10685/10625-10570/10530-10485/10425
Resistance to NF:
10805/10875-10935/10975*-11055/11150-11195/11375
Support for BNF:
26275/26125*-26000/25800-25600/25300-25100/24950
Resistance to BNF:
26700/26825*-27000/27150-27300/27500-27700/27975
Support for SPX-500:
2695*/2675-2655/2625-2610/2590
Resistance to SPX-500:
2715/2725-2750*/2775-2805/2820
*Technical View (Nifty, Bank Nifty, SPX-500):*
Technically, Nifty Fut-I (NF) has to sustain over 10825 for a further
rally towards 10875/10935-10975/11055-11150/11195-11225/11375 in the
short term (under bullish case scenario).
On the flip side, sustaining below 10805 NF may fall towards
10730/10715-10685/10625 and further 10570/10530-10485/10425 in the short
term (under bear case scenario).
Technically, Bank Nifty-Fut (BNF) has to sustain over 26700 for a
further rally towards26825*/27000-27150/27300 and further
27500-27700/27975in the near term (under bullish case scenario).
On the flip side, sustaining below 26650-26450 BNF may fall towards
26275/26125*-26000/25800 and further 25600/25300-25100/24950 in the near
term (under bear case scenario).
Technically, SPX-500 now has to sustain over 2725 for a further rally
towards 2750/2775-2805/2820 and further 2855/2880-2895in the near term
(under bullish case scenario).
On the flip side, sustaining below 2715, SPX-500 may fall
towards2695*/2675-2655/2625 and further 2610-2590in the near term (under
bear case scenario).
*Valuation metrics:*
*
*
Nifty-50: 10802; Q3FY18 EPS: 403; Q3FY18 PE: 26.80; Avg FWD PE: 20; Proj
FY-18 EPS: 418; Proj Fair Value: 8360
Bank Nifty: 26474; Q3FY18 EPS: 807; Q3FY18 PE: 32.81; Avg FWD PE: 20;
Proj FY-18 EPS: 961; Proj Fair Value: 19220
SPX-500: 2711; TTM Q4-2017 EPS: 111; TTM PE: 24.42
*GLOBAL MARKET STORIES: <https://www.iforex.in/news>*
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SGX-NF
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BNF
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SPX-500
<https://2.bp.blogspot.com/-c5bIYROhPIQ/Wvuqo_c_GxI/AAAAAAAAP-0/pqpzsCCjUMk3Mu8ubiaPcrTpfzXlVYNMQCLcBGAs/s1600/USDJPY-FIBB-15-05-2018.png>
USDJPY
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