Finance - Stock Market Forecast

Index Trend & Conditions – 08:15 a.m. I.S.T.

• Resistance area for Nifty 50 is at 13,000 — 13,250. For Thursday, Dec 03, Support area is seen at 13,050 12,950 and 12,840

• Resistance area for Bank Nifty at 29,750 — 30,000, while Support area is at 28,900 and 28,270

• The MSCI Asia Pacific ex-Japan is up 0.30% in early Thursday trade, while the MSCI Emerging Market index is up 0.22%

• Trends on SGX Nifty indicate a muted outlook for Nifty 50 in India with 18 points gain. The Nifty futures were trading at 13,173 on the Singaporean Exchange at 08:15 a.m. I.S.T.

• Contracts tied to U.S. futures opened lower on the day with S&P500, Dow Jones and Nasdaq futures trading in red. A muted Asia-Pacific early morning trade, a positive MSCI Asia-Pacific ex-Japan index, a weakening U.S. dollar index with rising 10-Year Treasury Yield and sliding Gold CFDs indicate a positive-to-stable outlook for Nifty 50 India

• The current mood in the market is bracing and non-committal

India Markets

NIFTY 50	OPEN	HIGH	LOW	CLOSE
Wednesday	13,121	13,128	12,983	13,113

Domestic equity markets closed mixed on Wednesday trade

Nifty 50 added 4 points or 0.04% to 13,113, while the BSE Sensex dropped 37 points or -0.08% to 44,416

Nifty formed a Bearish Dragonfly Doji candle with a long lower shadow, amid a range bound movement, suggesting that any small decline is being bought into in the market

Failing to breach its month-long resistance levels and increasing volatility can lead to further profit booking

As long as Nifty stays below 13,200 – 13,250 zone, all up moves, if there are any, will stay vulnerable to sharp profit taking bouts as Nifty is struggling around the upper boundary of the 40-day-old ascending channel, which is in progress from its September low of 10,790 level

Most broader markets out-performed their headline peers — Midcap 100 index added 0.49% ; Smallcap 250 index added 0.30% ; Nifty 500 added 0.21% ; Nifty Alpha 50 added 0.24% and Nifty Alpha Low Volatility 30 added 0.66%

On Sectoral Indices front, Realty and Metal stocks were at the vanguard of the rally, while Financial Services and Private Bank stocks performed poorly

Nifty P/E for Dec 02, 2020 advanced to 36.06 as recorded by NSE India

Bank Nifty opened positive, but moved southward for most part of the day. The index lost 354 points or -1.19% to 29,463. Levels of 28,900 and 28,270 to act as good support levels. Resistance area is at 29,700 — 30,000

India VIX fell -1.35% from 20.18 to 19.90 levels

Overnight Call Money rate weighted average stood at 3.09% as per RBI data. It moved in a range of 1.90 — 3.40% for Dec 01

The yield on the benchmark 10-year Government Bond rose to 5.971%, while the rupee weakened to 73.72 against the U.S. dollar

On stocks front, Tata Motors climbed over 2% post November sales data. Phoenix Mills surged 11% on signing deal with GIC affiliate. Kotak Mahindra Bank was the biggest laggard, down 3.35% on the day

Market breadth was in favour of the gainers as 1,719 stocks ended in the green, while 1,202 names settled with cuts

Investors will watch out for the Markit Services PMI data for November which is expected to improve further

“We’re seeing consolidation in the index but the bias is still on the positive side. Going ahead, further updates on Covid vaccines and cues from the global markets will remain in focus. Besides, on the domestic front, RBI’s monetary policy meet would also be on investors’ radar. The MPC is likely to maintain the status quo. However, their commentary on growth and inflation would be critical,” said Ajit Mishra of Religare Broking

America Markets

Wall Street traded mixed on Wednesday trade, with investors assessing renewed optimism over U.S. stimulus talks and vaccine approval

The Dow Jones added 60 points or 0.20% to 29,883 and the S&P 500 added 6 points or 0.18% to 3,669 ; while the Nasdaq dropped 5 points or -0.05% to 12,349

Energy firms led in the session, while tech shares under-performed on concerns about valuations

Contracts tied to U.S. futures opened lower in early Thursday trade. S&P500 futures is down -0.04%, Dow Jones futures is down -0.07% whereas Nasdaq futures is up 0.09%

Federal Reserve Chair Jerome Powell indicated Wednesday that there was no rift between the central bank and Treasury Secretary Steven Mnuchin over the sunsetting of emergency lending programs

The U.S. House cleared legislation that would impose restrictions on Chinese companies listed on U.S. exchanges

“The market has almost immediately priced in a better-than-expected 2021, particularly in the second half and that’s what we are seeing here, and on the yield curve as well,” Alicia Levine, chief strategist at BNY Mellon Investment Management, said on Bloomberg TV. “The message here really is that better days are ahead and that dips and consolidations are eminently buyable.”

Asia-Pacific Markets

Asian stocks opened muted in early Thursday trade, as global stocks paused at all-time highs, with investors assessing renewed optimism over U.S. stimulus talks and vaccine approval

Japan’s Nikkei 225 dropped -0.11% to 26,771, with Topix 500 adding 0.01% to 1,377

South Korea’s Kospi added 0.31% to 2,684

In Hong Kong, Hang Seng dropped -0.13% to 26,532 while Hang Seng China Enterprises dropped -0.81% to 10,573

In China, CSI 300 unchanged at 5,067 and Shanghai Composite dropped -0.07% to 3,449

Australia’s S&P/ASX 200 added 0.22% to 6,604

Singapore’s Straits Times Index dropped -0.39% to 2,799

Overall, MSCI Asia-Pacific, is up 0.25% on the day

The IHS Markit Australia Services PMI increased to 55.1 in November of 2020 from 53.7 in the previous month

Australia’s trade surplus increased to AUD 7.46 billion in October 2020 from AUD 5.82 billion in the previous month. Exports of goods and services from Australia soared 5% MoM to a six-month high of AUD 35.72 billion in October 2020. Imports of goods and services rose by 1% MoM to AUD 28.26 billion in October 2020

EU Markets

European shares slipped on Wednesday trade, as investors took stock following a near 14% rally last month

The pan-European Stoxx Europe 600 dropped -0.28% to 391 and Stoxx 50 dropped -0.11% to close at 3,521

Auto stocks lead declines as carmaker Volkswagen slipped -2.1% amid uncertainty about top management

Germany’s DAX30 dropped -0.52% to 13,313

London’s FTSE 100 added 1.23% to close to 6,463

France’s CAC40 added 0.02% to 5,583

Denmark’s OMX Copenhagen 20 dropped -0.08% to 1,391

Sweden’s OMX Stockholm 30 dropped -0.26% at 1,919

Italy’s FTSE MIB dropped -0.58% at 21,972

Britain granted emergency-use authorization for a Covid-19 vaccine, clearing a shot developed by Pfizer Inc. and BioNTech to be distributed in limited numbers within days. The vaccine is also being reviewed by the F.D.A. in the U.S.

Oil & Natural Gas Markets

Oil surged 0.2% in early Thursday trade

WTI Crude is trading lower at $45.06 per barrel

Brent Crude is trading lower at $48.05 per barrel

Natural Gas futures is down -4.00% at $2.758/MMBtu

On MCX-India, Crude oil futures is up 2.19% to 3,359 on Wednesday trade

On MCX-India, Natural gas futures is down -0.71% to 209/MMBtu on Wednesday trade

Gold & Silver Markets (+ Copper Futures)

Gold gained a second day, in early Thursday trade

If 10-Year U.S. Treasury Yield rises to 1% and above due to reflation trade, then inflation breakevens and Gold prices will keep strengthening above $1,800, but if the yield rises to 1.5% then Gold prices will weaken from $1,800, closer to $1,700

U.S. Gold futures (Comex) strengthened to $1,831.80 an ounce

Silver futures (Comex) strengthened to $24.00 an ounce

Copper futures (Comex) weakened to $3.4895 per pound — highest since 2014

In India, Spot Gold weakened to INR 48,118 per 10 grams

India — NCDEX Agridex

Agricultural futures index tracking the performance of the 10 liquid commodities, was down -0.81% trading at 1,173.75 ; with demand seen in Jeera, Cotton Seed Oilcake and Castor Seed futures on Wednesday trade

Currency Markets

The U.S. dollar index, DXY extended its slide, trading at 91.010 in early Thursday trade to a more than two-year low

INR weakened with USD / INR at 73.80

JPY weakened with USD / JPY at 104.4500

CNY strengthened with USD / CNY at 6.5611

EUR strengthened with EUR / USD at 1.2117

GBP strengthened with GBP / USD at 1.3371

*3-Month LIBOR Rate*	*As on 02 Dec 2020*
US DOLLAR	0.23 per cent
Euro	– 0.55 per cent
British Pound	0.04 per cent
Swiss Franc	– 0.78 per cent
Japanese Yen	– 0.12 per cent