Finance - Stock Market Forecast

Index Trend & Conditions – 08:30 a.m. I.S.T.

• Resistance area for Nifty 50 is at 13,000 — 13,250. For Friday, Dec 04, Support area is seen at 13,123 13,050 and 12,950

• 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 0.63%, while the MSCI Emerging Market index is up 0.58%

• Trends on SGX Nifty indicate a gap-up opening with mixed outlook for Nifty 50 in India with 42 points gain. The Nifty futures were trading at 13,245 on the Singaporean Exchange at 08:30 a.m. I.S.T.

• Contracts tied to U.S. futures ticked higher on the day with S&P500, Dow Jones and Nasdaq futures trading in green. A mixed Asia-Pacific early morning trade with stocks gaining in South Korea while retreating in Japan and China, a positive MSCI Asia-Pacific ex-Japan index, a weakening U.S. dollar index below 91 with sliding 10-Year Treasury Yield and rallying Gold CFDs indicate a positive-to-stable outlook for Nifty 50 India

• The current market sentiment is hit by news that Pfizer’s Covid-19 vaccine roll-out is facing near-term supply-chain hurdles and California has issued a statement to lock down its economy if its critical-care capacity reaches its limit

India Markets

NIFTY 50	OPEN	HIGH	LOW	CLOSE
Thursday	13,215	13,216	13,107	13,133

Domestic equity markets closed positive on Thursday trade

Nifty 50 added 20 points or 0.15% to a fresh all-time high 13,133, while the BSE Sensex added 15 points or 0.03% to 44,632

Nifty formed a Bearish candle with a large body, resembling a ‘Bearish Belt Hold’ pattern

Failing to breach month-long resistance levels with 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 0.63% ; Smallcap 250 index added 0.87% ; Nifty 500 added 0.33% ; Nifty Alpha 50 added 0.08% and Nifty Alpha Low Volatility 30 added 0.92%

On Sectoral Indices front, PSU Bank and Metal stocks were at the vanguard of the rally, while IT and Private Bank stocks performed poorly

Nifty P/E for Dec 03, 2020 advanced to 36.12 as recorded by NSE India

Bank Nifty opened positive, but descended throughout the session with a range-bound bias even as it formed an Inside Bar on the daily scale. It formed a bearish candle on the daily scale, continuing to move sideways. The index lost 14 points or -0.05% to 29,448. Levels of 28,900 and 28,270 to act as good support levels. Resistance area is at 29,700 — 30,000

India VIX fell 4.57% from 19.90 to 19 levels. Lower volatility suggests the bulls are holding a grip on the market and any decline trigger buying in the market

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 02

The yield on the benchmark 10-year Government Bond rose to 5.981%, while the rupee weakened to 73.80 against the U.S. dollar

Focus of the bi-monthly review of the credit policy by the RBI‘s monetary policy committee is likely to be on “ensuring adequate liquidity” in the system while maintaining an “accommodative” stance

In its preceding policy meet in October, RBI had kept the key repo rate unchanged in view of heightened retail inflation which has persistently remained above its comfort level

“In our assessment the current inflation should be a temporary phenomenon and would ease as supply disruptions resulting from COVID-19 related restrictions are getting resolved,” said Assocham Secretary General Deepak Sood. “While the cut in repo rate may not be announced on Friday, the accommodative stance should assure the industry and the market participants about the RBI’s commitment to keep the lending rates benign to give a continuous support to growth, especially in the post-Covid period.”

America Markets

Wall Street started positive with fresh highs but closed mixed and cut earlier gains on Thursday trade, after Dow Jones reported Pfizer is cutting its coronavirus vaccine rollout plan for this year due to supply chain issues

The Dow Jones 87 points, or 0.40% to 29,969 and the S&P 500 cut 2 points, or -0.06% to 3,666 ; while the Nasdaq gained 28 points, or 0.23% to 12,377

Small caps outperformed as the reopening rotation continued. Industrial and Real Estate sectors led in the session, while Financials, Utilities and Consumer Staples were in the red

Contracts tied to U.S. futures ticking higher in early Friday trade. S&P500 futures is up 0.20%, Dow Jones futures is up 0.18% whereas Nasdaq futures is up 0.17%

Pfizer shares declined -3.1% on Thursday following a report saying that supply-chain problems mean the drugmaker expects to ship only half the Covid-19 vaccine doses this year it had initially planned — down to 50 million from 100 million

Boeing Co. jumped about 6% after budget airline Ryanair ordered 75 additional 737 MAX jets with a catalogue value of $9 billion, throwing a commercial lifeline to the embattled U.S. planemaker

Heavyweight Tesla Inc.‘s 3% gain provided the biggest support for the Nasdaq after Goldman Sachs upgraded the stock to “buy” in the run-up to the electric-car maker’s addition to the S&P 500

Industrial conglomerate 3M Co.‘s shares gained 0.4% as the company unveiled plans to cut about 2,900 jobs globally and scale back on investments in slower-growing markets as part of a restructuring

Cloud-security provider Zscaler Inc. advanced 11% as it reported better-than-expected first-quarter revenue and adjusted profit

The number of Americans filing for unemployment benefits dropped to 712K in the week ended November 28th, from the previous week’s revised level of 787K and well below market expectations of 775K

“If we do see earnings growth start to pickup, perhaps 25% to 30% on the S&P 500 next year, and if we see rates remain low and stimulus in place, that remains a good backdrop for risk assets,” Mona Mahajan, investment strategist at Allianz Global Investors, said.

“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. “The message here really is that better days are ahead and that dips and consolidations are eminently buyable.”

Asia-Pacific Markets

Asian stocks looked set to slip in early Friday trade, with stocks gaining in South Korea while retreating in Japan and China, after news broke late in the U.S. session that a Covid-19 vaccine roll-out is facing near-term supply-chain hurdles

Japan’s Nikkei 225 dropped -0.47% to 26,683, with Topix 500 dropping -0.19% to 1,375

South Korea’s Kospi added 1.35% to 2,732

In Hong Kong, Hang Seng dropped -0.15% to 26,686 while Hang Seng China Enterprises dropped -0.03% to 10,584

In China, CSI 300 dropped -0.51% to 5,031 and Shanghai Composite dropped -0.63% to 3,420

Australia’s S&P/ASX 200 added 0.36% to 6,639

Singapore’s Straits Times Index added 0.08% to 2,824

Overall, MSCI Asia-Pacific, is up 0.84%

Purchasing managers indexes for Indonesia and Thailand published this week were both above the 50 threshold, indicating expansion. For Indonesia, the gauge has risen for six of the past seven months, while the Thai index has signaled growth for two straight months for the first time this year – this may prove to be a harbinger for their bond-market performances heading into 2021

Indonesia, Thai bonds have extended their rebound this quarter

The robust manufacturing numbers chime with the recent performance of debt from the two nations. Indonesian bonds have returned 10% this quarter to dollar-based investors, leading emerging Asia, while Thailand is second at 5%.

Rising PMIs don’t automatically translate into higher bond prices and a stronger currency, but they remain an important contributor to the overall narrative

EU Markets

European shares mostly in red on Thursday trade, as investors digested key PMI data and positive coronavirus vaccine news while awaiting any development on Brexit negotiations

The pan-European Stoxx Europe 600 added 0.05% to 391 and Stoxx 50 dropped -0.12% to close at 3,517

Travel & leisure shares jumped 3.5%, led by a rally in Flutter Entertainment Plc. after it entered a $4.2 billion U.S. deal, while the sector also got a boost after Deutsche Lufthansa AG said it will add additional flights following a surge in bookings

European stocks are hovering near February high after November rally

“As markets move around record high levels, we can expect some trading sessions of wait-and-see mood with more news around stimulus needed for stocks to keep gaining,” said Diego Fernandez, chief investment officer at A&G Banca Privada in Madrid. “There is still money waiting to enter the market, so as soon as we have more positive news, further gains can be expected.”

Germany’s DAX30 dropped -0.45% to 13,252

London’s FTSE 100 added 0.42% to close to 6,490

U.K.’s output shrank for the first time since June amid restrictions

France’s CAC40 dropped -0.15% to 5,574

Denmark’s OMX Copenhagen 20 dropped -1.52% to 1,369

Italy’s FTSE MIB added 0.16% at 22,007

German factory orders for October are due Friday

The European Commission seeks to have at least 30 million electric vehicles on the region’s roads by the end of the decade under a plan that would require the auto industry to massively accelerate its transformation

Oil & Natural Gas Markets

Oil set for fifth weekly gain in early Friday trade

Oil edged higher as OPEC+ reached an agreement to ease its oil-output cuts next year more gradually than previously planned

WTI Crude is trading lower at $46.29 per barrel

Brent Crude is trading lower at $49.44 per barrel

Natural Gas futures is down -2.02% at $2.513/MMBtu

On MCX-India, Crude oil futures is up 0.77% to 3,385 on Thursday trade

On MCX-India, Natural gas futures is down -10.93% to 187/MMBtu on Thursday trade

Gold & Silver Markets (+ Copper Futures)

Gold gained a fourth day, in early Friday 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 $1,843.70 an ounce

Silver futures (Comex) strengthened to $24.19 an ounce

Copper futures (Comex) strengthened to $3.5010 per pound — highest since 2014

In India, Spot Gold weakened to INR 48,496 per 10 grams

India — NCDEX Agridex

Agricultural futures index tracking the performance of the 10 liquid commodities, was down -0.20% trading at 1,170.15 ; with demand seen in Castor Seed, Guar Seed and Turmeric futures on Thursday trade

Currency Markets

The U.S. dollar index, DXY extended its slide, trading at 90.704 in early Friday trade, falling below 91 for the first time since April of 2018

INR weakened with USD / INR at 73.93

JPY strengthened with USD / JPY at 103.8600

CNY strengthened with USD / CNY at 6.5429

EUR strengthened with EUR / USD at 1.2145

GBP strengthened with GBP / USD at 1.3486

Credit Suisse Group AG is forecasting that the euro may rise to 1.25 by the end of 2021, while Goldman Sachs Asset Management favors shorting the dollar against the yuan, and sees further gains in the euro and yen. Morgan Stanley and Citigroup Inc. have also forecast a weaker greenback

*3-Month LIBOR Rate*	*As on 03 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