*Updated: 08:20*
*
*
SGX-NF: 10675 (-18; -0.17%)
Expected BNF opening: 26010 (-0.20%)
SPX-500: 2725 (+6; +0.22%)
*Note:*Flat negative opening on subdued global cues amid surging US bond
yields on the concern of higher inflation amid higher oil coupled with
some hawkish talks by Fed and increasing supply of US debts
(treasuries). US 30Y bond yield has broken the previous technical
resistance of 3.25% and made a high of 3.264% on early Friday.
Similarly, the benchmark US 10Y bond yield is also consolidating above
the previous resistance level of 3.05% and made a high of 3.128%.
Apart from higher bond yield (higher borrowing costs), the market is
also concerned about the ultimate fate of US-China trade negotiations,
currently going on in Washington. It now seems that Trump is not so much
optimistic as he raised some doubts and said China "has become very
spoiled on trade" despite China offered some trade package to the US to
reduce the trade deficit by $200B. China has proposed to import more US
agri and energy products such as soybean and LNG, aircraft and will open
up more for US financials and banking services.
But, US have to also increase its production capacities of soybean and
LNG substantially as it’s already exporting the majority of its excess
production to China. Thus, US now more interesting to talk and make a
deal on the alleged IP issues, which Trump believes could reduce the
US-China trade deficits by almost $300B alone. But, China is not ready
to talks about this IP issue at all as it thinks it as “Trump rhetoric”.
For the Indian market, oil (Brent crude) above $80 is an ominous signal
coupled with ongoing political saga unfolding at Karnataka. All eyes may
be now on the SC today. It now also seems that INC/oppositions will also
approach SC for four other states, where BJP was allowed to form a
government on the basis of the largest post-poll alliance rather than
the largest pre-poll party/alliance theory in the Karnataka case.
The market is now concerned that such political uncertainty, “horse
trading” may continue in the coming state elections as well as in the
2019 general election amid rising influence of small regional parties
and a vacuum of INC in the national/state level.
The Indian market is also concerned about the political populism at the
expense of state exchequer after the caretaker BJP government decided to
go for the farm loan waiver in its first cabinet (?) meeting on Thursday
soon after the swearing-in ceremony as par the election campaign. This
may be also against the spirit of the SC’s early morning order on
Thursday regarding the whole issue.
*Fut-I (Key Technical Levels)*
Support for NF:
10625/10605*-10560/10530-10485/10425-10395/10345
Resistance to NF:
10720/10760*-10800/10875-10935/10975-11055/11150
Support for BNF:
26000*/25800-25600/25300-25100/24950-24700/24600
Resistance to BNF:
26150/26350*-26500/26700-26825/27000-27150/27300
Support for SPX-500:
2715/2695*-2675/2655-2625/2610
Resistance to SPX-500:
2740/2750*-2775/2805-2820/2855
*Technical View (Nifty, Bank Nifty, SPX-500):*
Technically, Nifty Fut-I (NF) has to sustain over 10720 for a further
rally towards 10760/10800-10875/10935-10975/11055 in the short term
(under bullish case scenario).
On the flip side, sustaining below 10705 NF may fall towards
10625/10605-10560/10530-10485/10425 in the short term (under bear case
scenario).
Technically, Bank Nifty-Fut (BNF) has to sustain over 26350 for a
further rally towards26500/26700-26825/27000-27150/27300in the near term
(under bullish case scenario).
On the flip side, sustaining below 26300 BNF may fall towards
26150-26000 and further 25800/25600-25300/25100 in the near term (under
bear case scenario).
Technically, SPX-500 now has to sustain over 2750 for a further rally
towards2775/2805-2820/2855 and further 2880-2895in the near term (under
bullish case scenario).
On the flip side, sustaining below 2740, SPX-500 may fall towards
2725/2715 and2695/2675-2655/2625 and further 2610-2590in the near term
(under bear case scenario).
*Valuation metrics:*
*
*
Nifty-50: 10683; Q3FY18 EPS: 403; Q3FY18 PE: 26.51; Avg FWD PE: 20; Proj
FY-18 EPS: 418; Proj Fair Value: 8360
Bank Nifty: 26074; Q3FY18 EPS: 807; Q3FY18 PE: 32.31; Avg FWD PE: 20;
Proj FY-18 EPS: 961; Proj Fair Value: 19220
SPX-500: 2720; TTM Q4-2017 EPS: 111; TTM PE: 24.50
*GLOBAL MARKETS UPDATE <https://www.iforex.in/news>AND ANALYSIS:
<https://www.iforex.in/analysis>*
FOLLOW ME: TWITTER.COM/ASISIIFL
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SGX-NF
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BNF
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SPX-500
<https://1.bp.blogspot.com/-UZoUWNP8QmA/Wv5Tzed5EfI/AAAAAAAAQAY/TCXfXYqitG8_DbnrlshhC_9s-Glaz9_MgCLcBGAs/s1600/USDJPY-PATTERN-17-05-2018.png>
USDJPY
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