Nifty May Resume Almost Flat Tracking Mixed Global Cues Ahead Of Fed; All Eyes May Be On Ongoing Q1 Earnings, Which Is So Far Stable Except Some GST Shocks

Market Mantra: 26/07/2017 (09:00)

SGX-NF: 9980 (+7 points)

For the Day:

Key support for NF: 9935-9895/9860

Key resistance for NF: 10005-10050

Key support for BNF: 24700-24875

Key resistance for BNF: 24500-24300

Hints for positional trade:

Time & Price action suggests that, NF has to sustain over 10005 area for further rally towards 10050-10115 & 10195-10250 in the short term (under bullish case scenario).

On the flip side, sustaining below 9985 area, NF may fall towards 9935-9895/9860 & 9775-9715 area in the short term (under bear case scenario).

Similarly, BNF has to sustain over 24700 area for further rally towards 24875-25050 & 25275-25580 area in the near term (under bullish case scenario).

On the flip side, sustaining below 24650-24600 area, BNF may fall towards 24500-24300 & 24100-24000 area in the near term (under bear case scenario).

As par early SGX indication, Nifty Fut (July) may open around 9980, almost flat tracking mixed global cues; China/HKG market is in red today amid neutral PBOC & ongoing effort of deleveraging and some reports of US sanctions on certain China companies/entities over the NK issue. 

But most of the other major Asian markets are in green today following optimism over commodities (metals/oil) and higher USD (i.e. lower Yen, AUD & other Asian currencies aiding for the export narratives).

Overnight, US market (DJ-30) also closed upbeat at another record high around 21613 (+0.47%) amid hopes of Trumpcare (which failed early in the morning today again), blockbuster US consumer confidence and a decent housing report; but primarily aided by surprised report card from Caterpillar & Mac.

The upbeat earnings of CAT may be very much encouraging for the reflation trade, as it’s indicating a modest increase in demand (+10%) for its construction equipments from China, which has also boosted commodities like Dr. Copper; CAT performance is being regarded as one of the main barometer of the global growth engine (like L&T in India).

Back to home, all eyes may be on the ongoing Q1 report cards, which is so far termed as largely mixed/stable, except some GST shockers; yesterday’s Axis Bank report card may be at par estimates, but the overall trend of stressed assets may be also indicating that the NPA cycle may not be at its peak.

Apart from corporate/business NPA, retail stressed assets may also surge for the Indian Banks & NBFC in the days ahead considering the recent surge in personal loan/credit cards/consumer loans from Mobile to AC to even subprime customers, which may be reminding us the era of 2008-10 greed of banks & retails.

 SGX-NF