Index Trend & Conditions – 07:30 a.m. I.S.T.
• Resistance zone for Nifty 50 is at 14,830 and 14,940. For Thursday, Apr. 01, Support area is seen around 14,540 14,507 14,307 and 14,264
• Support levels for Bank Nifty is around 32,322; while Resistance zone is at 33,568 33,872 and 34,150 for Apr. 01
• The MSCI Asia Pacific ex-Japan is trading higher 0.85%, and the MSCI Emerging Market index is up 0.84%
• Trends on SGX Nifty look poised for a gap-up opening for Nifty 50 in India. The Nifty futures are trading 110 points, or 0.74% higher at 14,855 on the Singaporean Exchange at 07:30 a.m. I.S.T.
• U.S. equity futures mostly edged higher in early morning trade with S&P 500 and Nasdaq futures trading in green and Dow Jones in red territory; alongside a steady and positive start in Asia-Pacific benchmarks gauges in early Thursday trade with shares rising in Japan, Hong Kong and South Korea, while Australia and China had more modest gains; a positive MSCI Asia-Pacific ex-Japan index; U.S. dollar easing but staying on course for best quarter in a year to 93.20 with 10-Yr Treasury Yields rising for the fourth time in five days to 1.74% amid President Biden’s infrastructure initiative of $2 trillion, which is seen to bolster economic growth and debt issuance and Gold futures steadied after a two-day slump at $1,711 an ounce indicate a negative and volatile outlook in Indian equity markets amid channel-wise resistance
• Indian equity markets are currently witnessing “Sell on Rise” due to climbing daily new Covid cases in India now close to 50,000 cases per day and strengthening U.S. dollar
India Markets
India’s equity benchmarks opened muted and saw selling pressure on Wednesday trade, but respected its immediate support zones forming a Bearish Belt Hold pattern on the daily chart
The blue-chip NSE Nifty 50 index dropped 154 points or -1.04% to 14,690 and the benchmark S&P BSE Sensex dropped 627 points or -1.25% to close at 49,509
Broader markets out-performed headline peers — Midcap 100 index added 0.35%; Smallcap 250 index added 0.53% and Nifty 500 dropped -0.60%
Nifty P/E for Mar. 30 increased to 40.43 from 39.51 with Nifty P/B rose to 4.21 from 4.11, as recorded by NSE India
Bank Nifty opened negative and remained under pressure for the first half of the session. The index dropped 571 points, or -1.69%, to settle at 33,303
India VIX or the barometer of nervousness in the market, remained flattish at 20.64 level
Overnight Call Money rate weighted average stood at 3.22% as per RBI data. It moved in a range of 1.90 — 3.50% for Mar 30
Under Liquidity Operations by RBI, Reverse Repo for the week (Mar 15 to Mar 21) stood below 5 lakh crores, marking lower surplus liquidity in the market
Yield curve on the benchmark 10-Yr government bond rose to 6.17%, while the rupee weakened to 73.4540 per U.S. dollar
India will infuse 145 billion rupees ($2 billion) into four state-run banks to help strengthen capital buffers and potentially free some of the lenders from regulatory curbs. Central Bank of India, Indian Overseas Bank, Bank of India and UCO Bank will receive the funds through zero-coupon bonds. The capital injection will help the banks exit the RBI’s so-called prompt corrective action program in the financial year starting April 1
The Indian government and central bank have agreed to retain the bank’s inflation target of 2%-6% for the next five years, a finance ministry official said on Wednesday. However, analysts say high commodity prices could fan inflation in the coming months. India’s retail inflation accelerated to 5.03% year-on-year, a three-month high, in February on higher fuel prices. India’s economy is projected to contract 8% in the current financial year ending in March, before growing around 11% next financial year. The Reserve Bank of India’s Monetary Policy Committee (MPC) is expected to keep the benchmark repo rate at 4% at its next meeting from April 5-7
India’s budgetary fiscal deficit — the difference between revenue and expenditure — for the April-February 2020-21 period stood at Rs 14.06 lakh crore (~8% of real GDP), or 76% of the revised estimates (RE) of Rs 18.48 lakh crore (9.5% of real GDP) in 2021-22 Union Budget, Controller General of Accounts (CGA) data showed on March 31, against 10.37 lakh crores on year-on-year basis. February fiscal deficit stands at 1.72 lakh crore versus Rs 51,013 crore on a YoY basis. Finance Ministry said that the April to February 2021 revenue gap stood at Rs 10.43 lakh crore versus Rs 7.83 lakh crore (YoY). For February alone, the revenue deficit stood at Rs 1.31 lakh crore versus 32,400 crore (YoY). Capital expenditure for April-February stood at Rs 4.05 lakh crore, or 92.4 per cent of the full year revised estimates, compared with 3.04 lakh crore for the same period last year. The capex target for the year was revised upwards by around Rs 27,000 crore
The government will auction 7.24 trillion rupees ($99 billion) of bonds in the six months to September, or about 60% of the full-year target, Economic Affairs Secretary Tarun Bajaj said Wednesday. That compares with 60% to 65% of total debt the government usually issues for the period. Underwriters had to rescue a string of sales early this year. Governor Shaktikanta Das has repeatedly assured ample liquidity and vowed to buy at least 3 trillion rupees of bonds in the new financial year
(A) Business Activity in India’s dominant services sector expanded at its quickest pace in a year in February, helped by an increase in new orders and optimism generated by a roll-out of vaccines. The IHS Markit India Services Purchasing Managers’ Index rose to 55.3 last month from 52.8 in January, with a reading above 50 signaling expansion. The manufacturing sector also expanded, lifting the Manufacturing Composite PMI index to 57.3 in February. As a result, input price inflation quickened, pushing the aggregate rate of cost inflation to an 88-month high — a wrinkle for the nation’s inflation-targeting monetary policy makers who meet early next month to decide on interest rates
(B) Exports were up 0.7% year-on-year last month, slower than the 6.2% rise seen in January. More importantly, imports rose 7% as non-oil and non-gold imports saw robust growth, mirroring domestic demand
Under (C) Consumer Activity, Passenger vehicle sales, a key indicator of demand, rose nearly 18% in February from a year ago, with two-wheelers and tractor sales leading the pack. Demand for loans picked up. Bank credit grew around 6.6% in February from a year earlier, faster than the 5.9% rise seen in late January, central bank data showed. Liquidity conditions were little changed. A pullback in surplus liquidity, as well as rising yields, pose a risk to loan demand
(D) Industrial Activity contracted 1.6% in January from a year earlier. Consumer non-durables, comprising essential goods, contracted 6.8% in January, while demand for white goods and mobile phones shrank 0.2%. Output at infrastructure industries, which makes up 40% of the industrial production index, rose 0.1% in January from a year ago, after a 1.3% contraction in December. Both data are published with a one-month lag
America Markets
Big tech surged on Wall Street on Wednesday trade as Apple Inc, Microsoft Corp, Amazon.com Inc, Tesla Inc and Facebook Inc rose, as President Joe Biden announced a multi-trillion-dollar infrastructure investment plan
The broad-based S&P 500 gained 14 points, or 0.36%, to 3,972.89 to a fresh peak
The Dow Jones Industrial Average, composed mostly of cyclical stocks, fell 85 points, or 0.26%, to 32,981
The tech-heavy Nasdaq Composite Index gained 201 points, or 1.54%, to 13,246
U.S. equity futures edged higher in early Thursday trade. S&P500 futures is up 0.06%; Dow Jones futures is up 0.01% and Nasdaq futures is up 0.20%
10-Yr U.S. Treasury yields, which move inversely to the price, on track for 4th-straight monthly gain at 1.74% in early Thursday, with dollar edging off near 5-month peak at 93.20
The Cboe Volatility Index, known as Wall Street’s “fear gauge,” fell -1.07% to 19.40 on Wednesday
Private businesses in the U.S. hired 517K workers in March of 2021, compared to market forecasts of 550K. It is the highest increase in private payrolls in 6 months. The service-providing sector created 437K jobs led by leisure and hospitality (169K)
President Biden unveils $2.3 trillion Infrastructure Plan and proposal would increase corporate taxes to pay for fixing roads and bridges, boosting research and tackling climate change. Biden’s expansive infrastructure proposal also includes $50 billion for the American semiconductor industry
U.S. government is due to publish its closely-watched employment report for March on Friday
“We continue to be in this rotational kind of market and in particular some of what had been — to use a supermarket term — the hot pockets of speculative excess,” said Liz Ann Sonders, chief investment strategist at Charles Schwab. “But it obviously has not taken the market down with it more broadly, nor did the spectacle of Archegos do that either, so there’s clearly still resilience in the market.”
Asia-Pacific Markets
Asian stocks opened higher in early Thursday trade, as traders assessed U.S. President Joe Biden’s infrastructure plan
Shares rose in Japan and South Korea, while Australia and China had more modest gains
Japan’s Nikkei 225 gained 1.15% to 29,520 and Topix 500 gained 0.79% to 1,531
South Korea’s Kospi added 0.45% to 3,083
In Hong Kong, Hang Seng added 0.86% to 28,620 and Hang Seng China Enterprises added 1.22% to 11,105
In China, CSI 300 added 0.25% to 5,063 and Shanghai Composite added 0.20% to 3,448
Australia’s S&P/ASX 200 added 0.37% to 6,815
The official NBS Manufacturing PMI for China rose to 51.9 in March 2021 from 50.6 in February, beating market consensus of 51.0. This was the highest reading since December 2020. Output (53.9 vs 51.9 in February), new orders (53.6 vs 51.5), and buying levels (53.1 vs 51.6) all grew the most in three months, export sales returned to expansion (51.2 vs 48.8) and employment rose for the first time in eleven months (50.1 vs 48.1). As for prices, both input costs (69.4 vs 66.7) and output charges (59.8 vs 58.5) continued to rise at a solid pace
China gave approval for a restructuring of Sinochem Group and ChemChina Group, two companies that have been long the target of merger speculation. The two firms will become wholly-owned subsidiaries of a new holding company, operated by SASAC. The move is said to optimize resource allocation, strengthen innovation, stimulate business growth and also aiding in the development of the chemical industry in China
EU Markets
European equities were flat on Wednesday trade as a 30% slump for delivery company Deliveroo in its London debut took the shine off the fourth straight quarterly rise for the benchmark STOXX 600
The pan-European Stoxx Europe 600 fell -0.01% to 426 and Stoxx 50 fell -0.18% to 3,919
Germany’s DAX30 added 0.01% to 15,008
London’s blue-chip FTSE 100 fell -0.86% to 6,713 as the much-hyped stock market debut for Deliveroo falls flat
France’s CAC40 dropped -0.34% to 6,068
Denmark’s OMX Copenhagen 20 added 1.15% to 1,455
Spain’s IBEX 35 fell -0.18% to 8,580
Italy’s FTSE MIB added 0.88% to 24,636
Sweden’s OMX Stockholm 30 dropped -0.57% to 2,192
Economically sensitive sectors such as autos, banks and travel and leisure have been the top performers in Europe this quarter as investors hoped that the reopening of economies would spur growth in these cheap sectors
Credit Suisse extended declines for a third day, down -4.9%, on worries about its losses linked to the downfall of Archegos Capital, which defaulted on margin calls earlier this week
French business IT services provider Capgemini rose 0.1% after it raised its medium-term margin targets
“A lot of the winners of 2020 have become losers of 2021 on the recovery aspect,” said Roger Jones, head of equities at London & Capital. “European stocks still have the cyclical element to them that will continue to be favoured by investors.”
Oil & Natural Gas Markets
Crude-oil prices continued to fall in early Thursday trade, ahead an OPEC+ meeting where major producers are likely to extend the current production cut into May when they meet on Thursday amid concerns about extended restrictive measures in Europe
WTI Crude is trading at $59.53 per barrel
Brent Crude, the international benchmark for oil, is trading at $63.06 per barrel
Natural Gas futures slipped to $2.602/MMBtu
Commodities Markets
Gold futures clawed back in early Thursday trade, boosted by a marginally weaker dollar but was still set for its biggest quarterly decline in more than four years as elevated U.S. bond yields dented its appeal
Gold unlikely to rise above $1,700 – $1,750 range in the near-term, until growth and inflation likely stalls with investors favoring assets and commodities that track higher inflation
U.S. Gold futures (Comex) is trading at $1,712 an ounce
Silver futures (Comex) is trading at $24.40 an ounce
Gold / Silver Ratio rose marginally to $70.12
Copper futures (Comex) rose to $3.9985 per pound
SGX Iron-Ore futures fell to $162.00 per tonne
In India, Spot Gold is trading at INR 44,678 per 10 grams
“Gold and silver markets seem to be looking beyond a third wave to focus on the projected vaccination progress, especially in the United States,” Julius Baer analyst Carsten Menke said.
Currency Markets
U.S. dollar index, DXY edges off near 5-month peak 93.20 in early Thursday trade, on the back of a $2 trillion structural infrastructure plan adding concern about inflationary pressures
INR strengthened with USD / INR at 73.1600
JPY weakened with USD / JPY at 110.6800
EUR weakened with EUR / USD at 1.1739
GBP strengthened with EUR / GBP at 0.8509
GBP 73.1600 with GBP / USD at 1.3799
“In a week when the market is feeling so optimistic about the forthcoming payrolls release, it seems very likely that the greenback will find strong support,” Rabobank currency strategist Jane Foley said. “However, the market is in danger of pricing in too much inflation risk, meaning we see scope for the USD to soften in the months ahead.”
| 3-Month LIBOR Rate | As on 30 Mar 2021 |
| US DOLLAR | 0.20 per cent |
| Euro | – 0.55 per cent |
| British Pound | 0.09 per cent |
| Swiss Franc | – 0.76 per cent |
| Japanese Yen | – 0.07 per cent |
Bitcoin
Bitcoin / U.S. Dollar added 0.81% in early Thursday trade to $59,254 as of 07:30 a.m. I.S.T.
Goldman Sachs is close to offering investment vehicles for Bitcoin and other digital assets to clients of its private wealth management unit. Wall Street banks have largely shied away from cryptocurrencies. While Bitcoin is now more than 11 years old, there are very few things it can actually buy, and volatility is a major risk
“Goldman will leverage the firm’s capabilities to ensure we can best meet client interest across digital asset classes and technologies,” Mary Rich, global head of digital assets for Goldman Sachs said. “As a firm, we believe in the possibility of blockchain technologies, and it is imperative that we continue.”
Bond Markets
Americas : 10 – Year Govt Bond Yields
United States : 1.74%
Canada : 1.54%
Europe, Middle East & Africa : 10 – Year Govt Bond Yields
Germany : -0.29%
United Kingdom : 0.84%
France : -0.05%
Italy : 0.67%
Netherlands : -0.16%
Asia Pacific : 10 – Year Govt Bond Yields
India : 6.17%
Japan : 0.08%
Australia : 1.78%
Hong Kong : 1.2018%
Singapore : 1.70%
South Korea : 2.08%
Fund Flows on NSE, BSE and MSEI — 31 Mar 2021
FII/FPI Net Sell Rs (1,685.91) Crore in Capital Market
DII Net Buy Rs 2,081.52 Crore in Capital Market
Where We’ve Been Reading —
- Bloomberg
- The Wall Street Journal
- Reuters
- Trading Economics
- Seeking Alpha
- Axios
- Tech Crunch
- NSE Indices India
- Morningstar India
- The Star
- Harvard Business Review
- The Economic Times
