Finance - Stock Market Forecast

Index Trend & Conditions | 08:30 I.S.T.

• Major Resistance seen at 12,820 — 12,900 area for Nifty50

• For Wednesday, Nov 18, Support at 12,470 and 12,660 with Resistance at 12,820 — 12,900 area for Nifty50

• Trends on SGX Nifty indicate a negative outlook for Nifty 50 in India with a 16 points loss. The Nifty futures were trading at 12,882 on the Singaporean Exchange at 08:30 I.S.T. having formed a gravestone-doji on the day-scale

• Contracts tied to S&P500, Dow Jones Industrial Average and Nasdaq futures trading in red in early Wednesday morning, a stable outlook of Asia-Pacific early morning trade, MSCI APAC ex-Japan up 0.17% on the day and a strengthening US 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
Tuesday	12,932	12,934	12,797	12,874

Indian stocks scaled fresh high on Tuesday, as favorable initial results for a second Covid-19 vaccine fanned optimism of an exit from the pandemic

NSE Nifty 50 Index advanced 99 points or 0.74% on Tuesday to close at 12,874 due to improving business sentiments and a festive spirit

Nifty 50 index took out the psychologically important mark at the open—12,900 and formed a ‘Hanging Man’ candle on the daily chart

From a technical standpoint, the market is giving us chances, it was the second session in a row that Nifty formed a ‘Hanging Man’ sort of candle. Such a formation, if it comes following a substantial bounce, would be a warning sign for a trend reversal—an impending corrective move

Pharma and Energy stocks were the weak performers in Tuesday’s session, while Metal and PSU Bank stocks were at the vanguard of the rally

Nifty P/E for Nov 17, 2020 is at 34.93 as recorded by NSE India

On the up side, crucial level or resistance is seen at 12,820 — 12,900 area for Wednesday

While, on the downside, support is seen at 12,470 and 12,660 for Wednesday

The S&P BSE Sensex climbed 314 points or 0.72% to 43,952 as of close on Tuesday

Bank Nifty opened with a gap-up on Tuesday, adding 587 points or 2.05% to close at 29,181 due to heavy buying of PSU Bank stocks for their attractive valuations. Failing to settle above levels of 28,500 could attract under-performance from a near-term perspective

India VIX added 3.52% from 19.13 to 19.80 level

Broader market indices outperformed their headline peers. Midcap index added 1.11% while Smallcap index advanced 0.50%. Nifty500, the broadest index on NSE, advanced 0.80%

The overnight call money rate weighted average stood at 3.21% according to RBI data. It moved in a range of 1.80 — 3.50% as on Nov 13

The yield on the benchmark 10-year government bond was little changed at 5.88% while the rupee strengthened 0.2% to 74.4350 against the U.S. dollar

“The biggest uncertainty was the pandemic, so if there is a solution, there is naturally a big sigh of relief,” said Sudip Bandyopadhyay, who oversees investments at Inditrade Capital Ltd. in Mumbai. “Investors are also watching for how fast any potential vaccines can be delivered and what the logistics will involve.”

“Morgan Stanley has revised its BSE Sensex target upward to 50,000 points by December 2021 in the base case scenario, saying that the coming growth cycle is not fully priced in. The overseas firm had earlier projected the 30-share index target at 37,300 by June 2021.
The target indicates an upside of nearly 14 per cent from the current levels of around 43,890. At the same time, Morgan Stanley believes that the broader market is likely to outperform large caps in 2021.”
“We add another 100 basis points to financials at the expense of healthcare and also added SBI to our focus list while removing Apollo Hospitals. We are overweight in consumer discretionary, industrials, financials and utilities. We are underweight in technology and energy,” Ridhan Desai and Sheela Rathi of Morgan Stanley said.

“The upbeat global markets combined with the news of successful vaccine trails is helping the benchmark inch higher with every passing day. Given the sharp up move recently, markets may see some consolidation, however, the bias would remain on the positive side,” said Ajit Mishra, VP – Research, Religare Broking.

“We recommend investors to start considering partial profit booking, on a short-term basis, due to high gaps developing between the actual performance of the economy and the market,” said Vinod Nair, Head of Research at Geojit Financial services.

America Markets

Wall Street closed in the red on Tuesday, as steep losses in drug store shares and disappointing economic data weighed on sentiments

Declines were led by CVS Health and Walgreens after Amazon launched a pharmacy business that allows free delivery of medications for Prime members

The Dow Jones shed 167 points or -0.6% to 29,783

The S&P 500 retreated 17 points or -0.5% to 3,610

The Nasdaq dropped 25 points or -0.2% to 11,899

Today in the derivatives market, contracts tied to the Dow Jones Industrial Average is down -0.14%, S&P 500 is down -0.18% while Nasdaq 100 futures dropped -0.15%

On the economy front, industrial production jumped 1.1%, slightly higher than expectations of 1%

On the corporate front, earnings from Home Depot, Kohl’s, and Walmart topped estimates

“Chief Executive Elon Musk has taken another step to turning the Silicon Valley electric-vehicle maker into a mainstream car maker, parking the company in the S&P 500 index. S&P Dow Jones Indices on Monday said Tesla would join the index on December 21. The company’s third-quarter profit was a record $331 million, propelled by production from its Shanghai factory, where Tesla benefits from cheaper labor, and strong demand for its more-affordable Model 3 car. Tesla was buoyed by $397 million in regulatory credits in the third quarter which helped tip it into profitability.”

“Former U.S. Secretary of State Henry Kissinger said the incoming Biden administration should move quickly to restore lines of communication with China that frayed during the Trump years or risk a crisis that could escalate into military conflict.”

“Speaking in conversation with former U.K. Prime Minister Tony Blair at the Bloomberg New Economy Forum, Clinton said the U.S. could strengthen its negotiating position with China by enlisting partners, from Europe to Asian nations which were part of the Trans Pacific Partnership trade pact abandoned by President Donald Trump.”

Asia-Pacific Markets

Asian stocks were steady Wednesday after U.S. shares retreated as investors weighed escalating Covid-19 cases against optimism over a vaccine

Japan’s Nikkei 225 dropped -0.70% to 25,831 in early Wednesday trade

Topix 500 dropped -0.54% to 1,339 in early Wednesday trade

South Korea’s Kospi added 0.04% to 2,540 in early Wednesday trade

In Hong Kong, the Hang Seng Index added 0.01% to 26,419 in early Wednesday trade

China’s CSI 300 Index added 0.14% at 4,901in early Wednesday trade

Hang Seng China Enterprises Index added 0.12% to 10,562 in early Wednesday trade

Shanghai Composite Index added 0.32% at 3,350 in early Wednesday trade

Australia’s S&P/ASX 200 added 0.32% to 6,518 in early Wednesday trade

Singapore’s Straits Times Index added 0.19% to 2,783 in early Wednesday trade

Overall, MSCI’s broadest index of Asia-Pacific shares outside Japan, is up 0.17%

The Tokyo metropolitan government is making final arrangements to raise the city’s Covid-19 alert to the highest level to warn the virus is spreading, the Nikkei newspaper reported Wednesday

“Overseas investors purchased $55.4 billion of listed South Korean notes in the year through Nov. 16, according to data from the Financial Supervisory Service. In contrast, they withdrew almost $20 billion from bonds in India, Indonesia and Thailand.
South Korea’s 10-year bonds offer about 1.60%, a hefty premium compared to the sub-zero yields on nearly $17 trillion of debt worldwide. The nation is rated AA by S&P Global Ratings, the third-highest investment grade.”

EU Markets

European equities cut early losses to close mixed on Tuesday

The pan-European Stoxx Europe 600 dropped -0.28% to 388 on Tuesday

Stoxx 50 added 0.07% to close at 3,468 on Tuesday

Germany’s DAX30 dropped -0.04% to 13,133 on Tuesday

London’s FTSE 100 dropped -0.87% to close to 6,365 on Tuesday

France’s CAC40 added 0.21% to 5,483 on Tuesday

Denmark’s OMX Copenhagen 20 Index dropped -0.47% to 1,383 on Tuesday

Luxembourg’s LuxX Index dropped -1.18% at 1,237.50 on Tuesday

Sweden’s OMX Stockholm 30 Index added 0.19% at 1,922 on Tuesday

Italy’s FTSE MIB Index added 0.55% at 21,435 on Tuesday

Hungary and Poland said they would veto the €750 billion coronavirus stimulus package as they need to uphold rule-of-law standards to access the money

In Italy, Lombardy and Piedmont, the first regions in the country that entered a lockdown, have seen a decline in the infection rate for 4-days

European Union are nearing a breakthrough on Brexit as early next week

Oil & Natural Gas Markets

Oil prices edged down on Tuesday, with WTI crude falling as low as $40.57

Brent crude fell towards $43 a barrel on Tuesday

Looking to the supply side, prospects that OPEC+ will delay a production increase planned for January gave support to markets

Natural gas futures weakened -2.32% to $2.697/MMBtu on Tuesday

WTI Crude is trading lower at $41.11 per barrel in early Wednesday trade

Brent Crude is trading lower at $43.50 per barrel in early Wednesday trade

Natural Gas futures is trading lower at $2.694 per mmbtu in early Wednesday trade

On MCX-India, Crude oil futures dropped -0.81% to 3,049 on Tuesday’s session

On MCX-India, Natural gas futures dropped -2.44% to 200 on Tuesday’s session

Gold & Silver Markets (+ copper futures)

Gold futures hovered below the $1,900 mark since November 9th, as progress towards an effective coronavirus vaccine brightened the global economic outlook

Silver reversed trend and fell near 1% to $24.48 an ounce on Tuesday

Copper futures weakened to $3.2065 per pound on Tuesday

US Gold futures (Comex) weakened to $1,876.60 an ounce in early Wednesday trade

US Spot Gold weakened to $1,877.45 an ounce in early Wednesday trade

Silver futures (Comex) weakened to $24.46 an ounce in early Wednesday trade

Copper futures (Comex) weakened to $320.90 per pound in early Wednesday trade

In India, Spot Gold strengthened to INR 49,950 per 10 grams in early Wednesday trade

India – NCDEX Agridex

Agricultural futures index tracking the performance of the 10 liquid commodities, was down -1.08% trading at 1,213.05 ; with major demand seen in Cotton Seed Oilcake and Guar Gum futures on Tuesday

Currency Markets

The dollar index has lost further momentum and tested the 92.40 area on Tuesday

“Despite bets for a smaller aid packaged under Biden’s administration, investors have grown concerned that rising levels of debt could drag the economy and likely weighing on the world’s reserve currency.”

INR strengthened 0.19% with USD — INR at 74.4600

JPY weakened -0.01% with USD — JPY at 104.2000

CNY strengthened 0.43% with USD — CNY at 6.5568

EUR strengthened 0.01% with EUR — USD at 1.1863

GBP strengthened 0.08% with GBP — USD at 1.3257

SEK strengthened 0.06% with USD—SEK at 8.6248

*3-Month LIBOR Rate*	*As on 17 Nov 2020*
US DOLLAR	0.22 per cent
Euro	– 0.54 per cent
British Pound	0.05 per cent
Swiss Franc	– 0.78 per cent
Japanese Yen	– 0.10 per cent

Bond Markets

Americas : 10-Year Govt Bond Yields

United States : Down 5 basis points at 0.86%
Canada : Down 5 basis points at 0.68%

Europe, Middle East & Africa : 10-Year Govt Bond Yields

Germany : Down 2 basis points at -0.56%
United Kingdom : Down 3 basis points at 0.32%
France : Down 2 basis points at -0.33%
Italy : Down 1 basis point at 0.64%
Spain : Down 3 basis points at 0.07%
Netherlands : Down 2 basis points at -0.49%

Asia Pacific : 10-Year Govt Bond Yields

India : Unchanged at 5.88%
Japan : Unchanged at 0.01%
Australia : Up 1 basis point at 0.90%
Hong Kong : Up 1 basis point at 0.48%
Singapore : Up 2 basis points at 0.95%
South Korea : Unchanged at 1.64%

Fund Flows on NSE, BSE and MSEI — Nov 17 2020 (source NSE)

FII Net Buy Rs 4,905.35 Crore in Cash Market
DII Net Sell Rs (3,829.16) Crore in Cash Market

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