*Market Mantra: 17/10/2016*

As par early SGX indication, NF may open around 8585 (-26 ) area today following tepid global cues and relatively weak US market closing on Friday.

*Technically, NF has to sustain above 8550-8530* zone for any bounce back today; otherwise it may further fall towards 8500-8465* & 8405 area for the day.*
*For any meaningful strength, NF need to stay above 8630-8650* area for further rally towards 8690-8740* & 8785 zone as the day progress.*

*Similarly for BNF (LTP: 19090), immediate support may be around 18950-18890* and sustaining below that 18700-18650* & 18400 might be the target for the day.*
*On the other side, for any strength, BNF need to stay above 19050-19200* area for further rally towards 19300*-19400 & 19580 zone as the day progress.*

On Friday, overall US economic data was mixed as retail sales & PPI was above estimates, but U-Mich consumer confidence was very bad. Further, Yellen speech, although didn't have so much about US monetary policy, but overall tone was hawkish. Probability of "Trumpism" is getting reduced day by day and market is getting itself ready for the Dec'16 rate hike by Fed.

But, more than one 0.25% rate hike, Market may be also slowly being discounted for future path of steady rate hike (1/2 per year) in 2017-18. But, any Brexit, China & EU banking crisis related market turmoil in the months ahead may also keep the Fed on the sideline till Dec'2017 after one hike in Dec'16.

Thus one 0.25% hike a year may be the real dot-plots of Fed in the years ahead.

Apart from the ongoing global headwinds, Indian market sentiment may be also affected for pressure on Rupee as FCNR redemption is getting closer. Previous estimate was around $15 bln because of some roll over; but now there are reports of $22.4 bln possible outflow and around $10 bln position may be in unhedge condition. Analysts are expecting steady INR depreciation towards 70 level in the months ahead for this outflow and divergence between RBI & Fed's monetary stance (strong USD).





Thanks & Regards,

Asis Ghosh

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