Nifty May Open Almost Flat Amid Muted Global Cues And Renewed Concerns Of Shell Cos Coupled With Ongoing Border Tensions With China & Subdued Q1 Earnings

Market Mantra: 16/08/2017 (09:00)

SGX-NF: 9810 (-6)

For the Day: 

Key support for NF: 9775/9760-9705

Key resistance for NF: 9860/9895-9930

Key support for BNF: 24000-23800

Key resistance for BNF: 24350-24600

Hints for positional trading:

Time & Price action suggests that, NF has to sustain over 9860 area for further rally towards 9895/9930-9980 & 10030-10095 area in the short term (under bullish case scenario).

On the flip side, sustaining below 9840 area, NF may fall towards 9775/9760-9705 & 9660-9605 area in the short term (under bear case scenario).

Similarly, BNF has to sustain over 24350 area for further rally towards 24500-24600 & 24700-24900 area in the near term (under bullish case scenario).

On the flip side, sustaining below 24300 area, BNF may fall towards 24000-23800 & 23600-23300 area in the near term (under bear case scenario).

As par early SGX indication Nifty Fut (Aug) may open around 9810, almost unchanged tracking muted global cues ahead of FOMC minutes today and ongoing US political jitters. SGX-Nifty yesterday made a high of 9850 in the early Asian session, tracking upbeat global cues induced by NK’s dialing back of Guam missile attack rhetoric; but it fall soon after NAMO’s I-day speech amid concerns of renewed war on blackmoney, corruption & Shell cos etc.

Overall, it seems from the I-day speech of NAMO that, Govt/BJP is preparing for the ground work of general election to be held at either late 2018 or early 2019 and for that it will make the issue of “corruption fighting for the benefit of poor” to mask some other real & important issues like inclusive economic growth, employment, poor free public education & healthcare system in the country compared to its global peers.

Higher trajectory of inflation & subdued trade data may be also worrisome apart from muted Q1FY18 earnings. Also, yesterday’s incident of a small skirmish between Indian & China army at Ladakh LOC may keep the Indian market in stress as border standoff between the two countries ranging from Sikkim to Ladakh is getting serious along with ongoing geo-political tensions at Pak LOC.

Overnight, US market (DJ-30) also closed almost unchanged around 21999 (+0.02%) on concerns of another Fed hike in Dec’17 after a blockbuster US retail sales and upbeat Empire State Mfg Index & US inventories despite NK backs off from its missile game.

Overall, yesterday’s upbeat US retail sales may be also termed as seasonal amid ongoing summer driving season (holidays) and may be also supported by surging US household debts & credit card delinquencies, although it may be also backed by decent wage growth.

Market may be also confused that despite surging US retail sales, US retailers’ earnings or guidance are not so upbeat and coupled with that ongoing political jitters at WH (Trump) on the VG racist incident issues may have also affected the overall US market sentiment.

Although, Trump has signed a deregulation bill on his executive power for faster approval of large infra projects from the environment logjam, it may take still 2 years in US for such infra projects approval in comparison to earlier 10 years, which is still a lengthy process.

Trump may be a smart businessman or a deal maker, but lacks political maturity to lead the WH and other important legislations smoothly and his handling of the current VG racist incident may be also very poor which is reflecting in his dwindling approval rate, now at lowest since his election day win.

Global market update (15/08/2017): 

FX Update (15/08/2017):

SGX-NF