Nifty May Open Almost Flat Following Muted Global Cues Tracking “Confused” Fed, Slump In Oil & US Threat Of A Military Action Against NK

Indian Market May Focus On NPA/IBC Resolution Mechanism Amid Various Legal Challenges And GST & Q1FY18 Earnings

Market Mantra: 06/07/2017 (08:30)

SGX-NF: 9645 (-2 points)

For the Day:

Key support for NF: 9625/9580-9535

Key resistance for NF: 9675-9725

Key support for BNF: 23300-23000

Key resistance for BNF: 23550-23800

Time & Price action suggests that, NF has to sustain over 9675 area for further rally towards 9725-9775 & 9835-9875 in the short term (under bullish case scenario).

On the flip side, sustaining below 9655 area, NF may fall towards 9605-9580 & 9560-9535 & area in the short term (under bear case scenario).

Similarly, BNF has to sustain over 23550 area for further rally towards 23650-23800 & 23900-24050 area in the near term (under bullish case scenario).

On the flip side, sustaining below 23500 area, BNF may fall towards 23300-23100 & 23000-22800 area in the near term (under bear case scenario).

As par early SGX indication, Nifty Fut (July) may open around 9645, almost flat tracking muted global cues amid threat of a military action by US on NK after the nuke capable ICBM test by the later. Also, FOMC minutes released yesterday reveals nothing new, which market does not know; it seems that Fed is quite divided & confused about timing of B/S tapering & next rate hike. But, it’s clear that Fed sees subdued US inflation as transitory and may be also very optimistic about US job market.

Overall, it now seems that Fed may start its gradual tapering from Sep’17 and may also hike once more in Dec’17, if incoming US economic data supports that; after FOMC minutes FFR is little changed at around 56% for a Dec rate hike by Fed.

Back to home, apart from GST & Q1FY18 earnings, market may also focus on NPA/IBC resolution mechanism after Essar Steel got an interim stay from Gujarat HC against the whole process; there may be some apprehension that other large NPA borrowers may also approach HC and get similar stays against the RBI circular (IBC). In that scenario, the whole resolution process of NPA/IBC may be in doubt.

 SGX-NF