NSE-NF (Aug):10004 (-87; -0.87%) (TTM PE: 25.26; Abv 2 SD of 25; Avg PE:
20; TTM EPS: 395; NS: 9979)
NSE-BNF (Aug):24705 (-293; +0.61%) (TTM PE: 30.94; Abv 3 SD of 30; Avg
PE: 20 TTM EPS: 795; BNS: 24599)
*Key support for NF: 9940-9890*
*Key resistance for NF: 10065-10115*
*Key support for BNF: 24500-24250*
*Key resistance for BNF: 24900-25150*
*Hints for positional trading:*
*Time & Price action suggests that, NF has to sustain over 10065 area
for further rally towards 10115-10155 & 10205-10275 in the short term
(under bullish case scenario).*
*On the flip side, sustaining below 10045 area, NF may fall towards
10000-9940 & 9890-9825 area in the short term (under bear case scenario).*
*Similarly, BNF has to sustain over 24950 area for further rally towards
25050-25150 & 25250-25500 area in the near term (under bullish case
*On the flip side, sustaining below 24900 area, BNF may fall towards
24700-24500 & 24250-23900 area in the near term (under bear case scenario).*
Nifty Fut (Aug) today closed around 10004, virtually “shell shocked” by
yesterday’s SEBI directive about freezing of a long list of so called
shell cos and slumped by almost 87 points (-0.87%) after making an
opening session high of 10105 and day low of 9958; overall market
sentiment got affected severely as there may be wider probes into other
clean cos also and above all valuations may be quite stretched.
The surprised SEBI move may be a logical follow up by the Govt’s
clampdown on black money/corruption (DeMo) suspected on illegal offshore
transfers & tax evasion; although the regulator did not specify the
Indian market today opened around 10085, almost flat, tracking mixed
global cues; but soon after opening it fall into severe selling pressure
after SEBI decision to bar nearly 331 suspected “shell companies” from
regular trading and further strict action, if allegation proves right.
Apart from various small companies, there are also so called “multi
baggers” & “quality names” in that list, which may be very shocking to
the investors/traders and may also, destabilize the overall market
mechanism and it may be a serious question of credibility. These “shell
cos” data has been compiled by MCA (Govt OF India), may be with the help
of other investigating agencies in an ongoing fight against corruption
by the Govt.
But, as Govt may also need a vibrant Indian capital market to keep its
disinvestment target intact, one may expect some soothing clarification
from the Govt/FMO soon and if there is any wrong communication, SEBI may
also admit that and will hopefully rectify it soon.
Nifty was today supported by Hindalco (upbeat report card from Novelis &
optimistic outlook), Tata Steel (upbeat results/guidance & optimistic
outlook for the domestic industry, thanks to the huge infra spending by
the Govt), Cipla (new product approval from US FDA), GAIL (OMC
optimism), Bajaj-Auto (new model launch) & HUL (optimistic outlook &
near normal monsoon with little probability of an EL-Lino even by 2018
Spring as projected by the IMD).
Nifty was today dragged by RIL, PSBS (tepid credit growth) & Infratel
(stake sale by Bharti Airtel to reduce debt), DRL, Lupin, Sun Pharma,
ITC, ICICI & Axis Bank.
Globally, most of the major Asian markets except Hong-Kong were trading
in negative tracking mixed global cues after USD softened more amid
subdued China export/import (trade balance) data. There is also some
buzz that China may widen its USDCNY trading (fixing) band in its
ongoing effort of currency reform ahead of Trump’s visit in Oct-Nov. A
lower USD is generally not good for export heavy Asian indices/markets.
Today China trade data for July flashed disappointed and may have raised
some question mark over the narratives of global reflation trade based
on China; on YOY basis, export grew by 7.2% against estimate of 10.9%
(prior: 11.3%); similarly import grew by 11% against estimate of 16.6%
(prior: 17.2%), leaving the headline trade balance at $46.74 bln vs
estimate of 46.08 (prior: 42.77).
Overall, global market may have great faith on the Chinese reflation,
being the manufacturing power house & growth engine of the world, but a
tepid export & import figure for July may be also a big disappointment,
although a strong Yuan over the last few months may be also responsible
for the subdued export data to some extent.
Overnight US market (DJ-30) closed almost flat, but at another record
high around 22118 (+0.12%) supported by techs/semi conductor stocks &
consumer staples and some M&A buzz; but energy related shares dragged
the market to some extent in a relatively light day of trading amid
ongoing summer holiday season.
Overall, US market may be quite complacent nowadays due to upbeat
earnings (thanks to a lower USD), dovish Fed (lower interest rate) and
an environment of low inflation despite lingering US political jitters &
poor visibility of Trumponomics.
Technically, SPX-500 (Fut) which is now trading around 2475 (-0.11%)
need to stay over 2495-2505 area for further rally from here; otherwise
2445-2400 zone may come in the days ahead.
Overall, AU economic data may be quite good in the recent times, but RBA
talk down effort may be also a major headwind for the currency at this
moment although it may also be not working as much expected by the RBA
AUDUSD is being controlled by carry trade flow in search of better &
attractive yields from a stable commodity country like Australia and as
long as this attractive bond yield differential remains, AUD can’t go
ASX-200 today is being dragged by banks & financials amid lingering
regulatory concern about CBA money laundering probe; also materials &
commodities (energy) were in pressure today.
Japan also closed in negative around 19996, (-0.30%) tracking a stronger
Yen; but it was supported by some upbeat earnings & guidance from Soft
Today another influential Ex-BOJ Dy Gov (Iwata) again called for a
gradual BOJ QE tapering to JPY 40 tln from JPY 80 tln/year to contain
financial bubbles as 2% BOJ inflation target is increasingly looking
elusive; even 1% CPI target may be now difficult to sustain on longer
term basis; JGB may be also suffering from acute scarcity amid huge BOJ
buying, which may be also distorting the Japanese market. Iwta may be is
also a potential next BOJ chief after Kuroda’s term expires in April’17.
China (SSE) is also trading around 3277, almost flat (-0.02%), but off
the low amid subdued China trade data and a buzz that PBOC may widen the
USDCNY band. Today PBOC fixed USDCNY a little lower at 6.7184 vs 6.7228
and remained neutral on the money market today. PBOC has also made the
China FX reserve quite stable in the last few months amid effort of
deleveraging from acquiring foreign assets apart from the general
devaluation of USDCNY.
Hong-Kong (HKG-33) is trading around 27810, up by almost 0.60% amid
earning optimism and tepid China trade data and is the only major Asian
market, which is in green today being also helped by energy sector.
Oil (WTI) is in green now, trading around 49.55, almost up by 0.25%
ahead of OPEC-NOPEC production cut compliance meeting and hopes of
further boost up in the same after tepid compliance report card in July
on production squabbling from Libya, Nigeria and also some other key oil
Elsewhere, European market was also came under pressure after
yesterday’s tepid German IIP & today’s subdued China & Germany trade
data coupled with mixed earnings report and a stronger EUR hovering
around 1.18; thus Indian market also sold off in the close after some
attempt of failed short covering today.
Exports for June from EU’s economic power house Germany fell by 2.8%
against estimate of -0.3% (prior: 1.5%-R); similarly imports gone down
by 4.5% against estimate of 0.2% growth (prior: 1.3%-R), resulting a
headline trade balance of 21.2 bln against estimate of 21 bln (prior:
Overall, subdued German IIP & trade balance data may be an adverse
effect of s stronger EUR and a weaker GBP, as UK may be a prime
beneficiary of devalued currency, which is aiding its export at the cost
Gloomy China trade data has also made the EU miners & metal producers
lower as China is a major consumer of industrial metals & iron ore.
Also, consumer stocks (Jewelry, Hotels, Financial services) are down
today due to weak earnings & guidance/outlook.
DAX-30 is now trading around 12185, down by over 0.50%; FTSE-100 is
almost flat around 7523 (-0.11%) on weak GBP, helpful for Britain’s
export heavy index, but being pulled by Leisure & miners and also
financials (tepid earnings), while CAC-40 is down by almost 0.20% around
5197 amid mixed earnings
Asian session update
Thanks & Regards,
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