Market Mantra: 14/07/2017 (08:30)
SGX-NF: 9910 (+25 points)
For the Day:
Key support for NF: 9875/9855-9790
Key resistance for NF: 9930-9975
Key support for BNF: 23900-23750
Key resistance for BNF: 24000-24115
Time & Price action suggests that, NF has to sustain over 9930 area for further rally towards 9975-10050 & 10100-10195 in the short term (under bullish case scenario).
On the flip side, sustaining below 9910 area, NF may fall towards 9855-9790 & 9715-9670 area in the short term (under bear case scenario).
Similarly, BNF has to sustain over 24000 area for further rally towards 24115-24250 & 24250-24450 area in the near term (under bullish case scenario).
On the flip side, sustaining below 23950-23900 area, BNF may fall towards 23750-23650 & 23450-23300 area in the near term (under bear case scenario).
As par early SGX indication, Nifty Fut (July) may open around 9910, almost 25 points up following mixed global cues. Overnight US market (DJ-30) also closed almost flat (+0.10%) amid mixed PPI data and QT & valuation concern by Fed & ECB.; but supported by Banks & Financials ahead of key earnings today.
As par reports, Draghi may appear in the Aug Jackson Hall meet and signal the QE tapering of ECB IN 2018; thus it may be a co-ordinated QT move by Fed & ECB and subsequently all the other major G-10 central Banks including BOJ & BOE may also join; BOC has already hiked by 0.25% day before yesterday after 2010 and may further hikes in 2017-18.
Also, as par some reports, BOJ may downgrade its inflation target in its forthcoming meet on 20th July and thus it may also be preparing for an eventual QT just to follow Fed to keep the parity between JPY & USD at present ideal level.
US market yesterday also came under some stress after Yellen sounded less dovish in her 2nd day of testimony and another influential Fed member (Brainard) commented about stretched valuation of US equity assets. All eyes now may be on the US CPI report today after mixed PPI report yesterday as subdued inflation may be the prime concern for Fed now to hike further in 2017; although it may start the QE tapering from Sep’17 itself.
Back to home, although Indian market is now eyeing for the 10k Mt’ Everest, valuations may be already very stretched and the Q1FY18 earnings may not help too much this time also. There are various disturbing signs that Indian/Global bull market cycle may be at its peak and going forward subdued earnings, QT chorus by global central banks and growing US political jitters (high probability of a Trump impeachment) & poor visibility of Trumponomics might be some of the triggers.