Finance - Stock Market Forecast

Index Trend & Conditions – 08:00 a.m. I.S.T.

• Resistance area for Nifty 50 is at 13,055. For Friday, Nov 27, Support area is seen at 12,950 and 12,750

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

• The MSCI Asia Pacific ex-Japan is down -0.15% in early Friday trade, while the MSCI Emerging Market index is down -0.06%

• Trends on SGX Nifty indicate a negative outlook for Nifty 50 in India with 8 points gain. The Nifty futures were trading at 13,054 on the Singaporean Exchange at 08:00 a.m. I.S.T.

• Contracts tied to S&P500, Dow Jones and Nasdaq futures traded in red in early Friday morning with a dip in volume due to holiday-shortened trading hours, a cautious Asia-Pacific early morning trade with shares underperforming in Australia and Hong Kong while edging up in Japan, MSCI APAC ex-Japan down -0.15% on the day and a weakening U.S. dollar with falling 10-Year Treasuries indicate a negative-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
Thursday	12,906	13,018	12,790	12,987

Domestic equity markets opened positive, witnessed a little dip in the initial hour of the session but recovered well thereafter on Thursday trade

Nifty 50 added 128 points or 1.00% to 12,987 and the BSE Sensex added 431 points or 0.98% to 44,259

A candle with a long lower shadow occurred on the daily chart, indicating a likely stalling of the present rally if the market does not move past the previous high point

As long as Nifty stays below 13,000 level, all up moves, if there are any, will stay vulnerable to sharp profit taking bouts

Broader markets under-performed their headline peers — Midcap 100 index added 0.86% ; Smallcap 250 index added 0.77% ; Nifty 500 added 0.94% ; Nifty Alpha 50 added 0.27% and Nifty Alpha Low Volatility 30 added 0.98%

Nifty P/E for Nov 26, 2020 advanced to 35.71 as recorded by NSE India

Bank Nifty opened positive and corrected till 28,900 level (strong support as indicated previously). On the day, the index gained 353 points or 1.21% to close at 29,549. Levels of 28,900 and 28,270 to act as good support levels. Resistance area is at 29,700 — 30,000

India VIX slipped -12.53% from 23.12 to 20.22 levels

Overnight call money rate weighted average stood at 3.12% as per RBI data. It moved in a range of 1.90 — 3.40% for Nov 25

The yield on the benchmark 10-year government bond fell two basis points to 5.87%, while the rupee was little changed at 73.8900 against the U.S. dollar

RBI Governor Shaktikanta Das on Thursday said that the policy will remain accommodative to support growth, while cautioning a resurgence in coronavirus infections remains a risk to recovery

India’s equities have been boosted by net foreign fund purchases that are on course for a monthly record

“Once the economy is fully unlocked the government will need to spend a lot of money on infrastructure to generate employment. Investors are expecting that will lead to good demand for steel,” said Anita Gandhi, an investment adviser at Arihant Capital Markets Ltd. in Mumbai.

America Markets

Cash market is closed, with traders off for Thanksgiving holiday in the U.S.

The Dow Jones lost 174 points or 0.6% to 29,873 and the S&P 500 retreated 6 points or 0.2% to 3,630 ; while the Nasdaq gained 57 points or 0.5% to 12,094

The violent rotation out of tech shares and into cyclicals, sparked by promising vaccine news, reversed Wednesday. The tech-heavy Nasdaq indexes advanced, while small caps slumped

Today in the derivatives market, contracts tied to the Dow Jones is up 0.18%, S&P 500 is up 0.20% while Nasdaq 100 futures added 0.38%

Walt Disney Co. announced another 4,000 job cuts after virus lockdowns forced the closure of its theme parks, taking the total layoff to 32,000, which is more than one-tenth of its workforce

“This week the U.S. Dollar hit its lowest levels against a basket of currencies in more than two years.
A commentary from market strategists at Citigroup recently predicted the dollar could see another 20% drop in 2021. Goldman Sachs analysts predict a 6% decline over the next 12 months, ING analysts forecast up to a 10% drop. High valuations for U.S. stocks, interest rates that don’t keep up with inflation and a recovery of global growth should all weigh on the dollar. Vaccines will allow economies around the world to return to normal within the next year, encouraging investors to step back from the relative safety of U.S. assets and invest in stocks, bonds and currencies outside the U.S.
Money leaving U.S. stock markets may head to the DAX, Germany’s industry heavy stock market index, and to bank stocks. Both have rallied in recent weeks while the dollar has weakened. European and Japanese stocks have done better than the S&P 500 over the past month. Both are filled with companies that benefit from an expanding economy – cyclical and value stocks.”

Asia-Pacific Markets

Asian equities ended the week in a cautious fashion as investors assessed valuations following the rapid rise in global stocks this month and the enduring pandemic in parts of Europe and the U.S. in early Friday trade, with shares underperforming in Australia and Hong Kong while edging up in Japan

Japan’s Nikkei 225 dropped -0.11% to 26,506, while Topix 500 added 0.21% to 1,384

South Korea’s Kospi unchanged at 2,624

In Hong Kong, Hang Seng dropped -0.15% to 26,781 while Hang Seng China Enterprises added 0.01% to 10,704

In China, CSI 300 added 0.32% to 4,935 and Shanghai Composite added 0.42% to 3,383

Australia’s S&P/ASX 200 dropped -0.66% to 6,592

Singapore’s Straits Times Index dropped -0.21% to 2,851

Overall, MSCI Asia-Pacific ex-Japan, is down -0.15%

Bank of Korea Governor Lee Ju-yeol said the economy will likely shrink less than expected this year despite the worsening pandemic, though he issued a warning over rapid Won gains that could undermine the pace of recovery. The central bank now sees the economy contracting -1.1% this year and growing 3% next year

“The negative impact from the resurgence of the virus is still big, but exports will likely outweigh that,” Lee Ju-yeol, Bank of Korea Governor, said at a briefing after the central bank board held the seven-day repurchase rate at 0.5% on Thursday and upgraded its growth forecasts.

EU Markets

Stock markets across Europe closed mostly in the red in thin volume on Thursday trade

Cyclical companies including banks and energy firms that had led the post-vaccine surge retreated while more defensive tech shares gained

The pan-European Stoxx Europe 600 dropped -0.1% to 391

Stoxx 50 dropped -0.03% to close at 3,510

Germany’s DAX30 dropped -0.02% to 13,286

London’s FTSE 100 dropped -0.44% to close to 6,362

France’s CAC40 dropped -0.08% to 5,566

Denmark’s OMX Copenhagen 20 added 0.68% to 1,383

Luxembourg’s LuxX Index dropped -1.64% at 1,265

Sweden’s OMX Stockholm 30 added 0.03% at 1,931

Italy’s FTSE MIB dropped -0.46% at 22,201

On the economic data front, consumer morale in Germany and France came in weaker than expected

Chancellor Angela Merkel said on Wednesday that Germany would extend restrictive measures imposed early on this month to rein in a second wave that is sweeping much of Europe, until at least Dec. 20, as Covid-19 infection numbers remained high

UK’s domestically exposed stocks stabilised after a sell off in the previous day, as Finance Minister Rishi Sunak warned the economy was on course to shrink by 11.3% this year and unveiled plans to borrow amounts not seen before in Britain‘s peacetime

The European Central Bank is also expected to boost stimulus at a Dec. 10 meeting, even as the Federal Reserve returns unused funds meant to backstop five emergency lending programs

BNP is forecasting a 17% drop in gross investment-grade bond supply in Europe next year to 356 billion euros ($425 billion) due to expectations that companies will start deleveraging

AstraZeneca Plc is likely to conduct an additional global trial to assess the efficacy of its Covid-19 vaccine, according to Pascal Soriot, the company’s chief executive officer, after current studies raised questions over its level of protection

“There is less downside in European credit because it has much more robust support,” Viktor Hjort, the bank’s global head of credit strategy, said in an interview. “The ECB buys a lot more corporate bonds than the Fed in both absolute and relative terms.”

“Question marks still surround the speed of a global roll-out and the proportion of populations willing to be vaccinated,” Geir Lode, head of global equities at the international business of Federated Hermes, wrote in a note to clients. “These factors, combined with a second consecutive week of rising jobless claims in the U.S, appear to have brought the rotation into value and back-to-work stocks grinding to a halt for now.”

Oil & Natural Gas Markets

Oil fell from an eight-month high as the dollar recovered, while disparities in demand set the stage for OPEC+’s key policy meeting next week

Oil has jumped around 27% this month as signs that Covid-19 vaccines are imminent boosted expectations for a swift recovery in energy demand next year. However, while there are indications that Asian consumption remains healthy, Europe is still lagging

WTI Crude is trading lower at $45.01 per barrel in early Friday trade

Brent Crude is trading lower at $47.88 per barrel in early Friday trade

Natural Gas futures is trading steady at $2.923/MMBtu in early Friday trade

On MCX-India, Crude oil futures dropped -2.24% to 3,324 on Thursday’s session

On MCX-India, Natural gas futures fell -0.96% to 216/MMBtu on Thursday’s session

Gold & Silver Markets (+ Copper Futures)

Gold halted its slide in early Friday trade

Gold prices are heading for a fourth straight monthly decline as progress on Covid-19 vaccines lifted risk sentiment and reduced demand for havens

U.S. Gold futures (Comex) halted at $1,813.00 an ounce

U.S. Spot Gold weakened to $1,807.97 an ounce

Silver futures (Comex) weakened to $23.32 an ounce

Copper futures (Comex) strengthened to $3.3855 per pound — reaching the highest since 2014

In India, Spot Gold weakened to INR 47,684 per 10 grams

India — NCDEX Agridex

Agricultural futures index tracking the performance of the 10 liquid commodities, was down -1.42% trading at 1,179.65 ; with major demand in Cotton Seed Oilcake futures on Thursday trade

Currency Markets

The U.S. dollar index, DXY has broken its main support level at 92 to trade at 91.995, leaving the door open for deeper retracements as a vulnerable job market raised speculation over further monetary easing or additional government stimulus on Friday trade

INR strengthened 0.04% with USD — INR at 73.8862

JPY strengthened 0.18% with USD — JPY at 104.2700

CNY strengthened 0.05% with USD — CNY at 6.5756

EUR weakened -0.05% with EUR — USD at 1.1911

GBP weakened -0.21% with GBP — USD at 1.3352

SEK weakened -0.36% with USD — SEK at 8.5270

*3-Month LIBOR Rate*	*As on 26 Nov 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	– 0.10 per cent