Index Trend & Conditions – 07:30 a.m. I.S.T.
• Resistance for Nifty 50 is seen at 14,284 14,435 and 14,650. For Tuesday, Feb 02, Support area will be at 13,750 and 13,625
• Support levels for Bank Nifty are at 32,700 and 32,400 with Resistance around 33,600
• The MSCI Asia Pacific ex-Japan is trading higher 1.43%, and the MSCI Emerging Market index is up 1.28%
• Trends on SGX Nifty looked poised for a gap-up opening and a modestly firmer start for Nifty 50 in India. The Nifty futures are trading 101 points, or 0.71% higher at 14,465 on the Singaporean Exchange at 07:30 a.m. I.S.T.
• U.S. equity futures climbed in early morning trade with Nasdaq, S&P 500 futures and Dow Jones futures trading in green; alongside a positive opening to Asia-Pacific early Tuesday trade with stocks rising in Japan, South Korea, Hong Kong, China and Australia; a positive MSCI Asia-Pacific ex-Japan index; U.S. Dollar paring overnight gains to 90.89 with 10-Year Treasury Yield easing at 1.08% and Gold futures edging higher to $1,862 on the day indicate a stable-to-positive outlook for Nifty 50 India
India Markets
| NIFTY 50 | OPEN | HIGH | LOW | CLOSE |
|---|---|---|---|---|
| Monday | 13,758 | 14,336 | 13,661 | 14,281 |
India’s equity benchmarks jumped on Monday trade, as sentiments were upbeat as the budget proposed setting up an asset management company to take over stressed assets of banks, commonly referred to as Bad Bank, in addition to plans to divest two state-run lenders
The blue-chip NSE Nifty 50 index added 646 points, or 4.74%, to 14,281 and the benchmark S&P BSE Sensex fell 2,314 points, or 5.00%, to 48,600
Broader markets under-performed headline peers — Midcap 100 index added 3.30% ; Smallcap 250 index added 2.00% and Nifty 500 added 4.14%
Nifty P/E for Feb 01, 2020 increased from 36.57 to 38.26, and Nifty P/B edged higher from 3.86 to 4.05, as recorded by NSE India
Bank Nifty opened with a gap up and touched its lifetime high of 33,305. The index formed a strong bullish candle on the daily scale, adding 2,523 points, or 8.26%, to 33,089
India VIX or Fear gauge fell 7.96% from 25.34 to 23.32 levels
Overnight Call Money rate weighted average stood at 3.20% as per RBI data. It moved in a range of 1.90 — 3.50% for Jan 28
Yield on the benchmark 10-year government bond rose sixteen basis points to close at 6.06%, as bonds tumbled with surging stocks after the government unveiled a spending plan worth almost a half-trillion dollars, while the rupee weakened 0.1% to 73.1840 per U.S. dollar
Govt. unveiled a massive spending plan in its Union Budget Speech 2021-22, focused on healthcare and infrastructure. The economy is projected to contract 7.7% in the current fiscal year, although the government forecasts growth of 11% for the coming fiscal year. Fiscal deficit which started at 3.5% during Feb 2020 has increased to 9.5% of GDP in FY21. Taking a bold move, govt. has increased the permissible limit for FDI for insurance companies to 74% from 49%
FM Sitharaman had thrilled equity market participants by not introducing the “most dreaded” wealth tax or raising LTCG tax on equity investment
India announced a higher farm loan target and additional taxes, to boost agricultural infrastructure and crop production in the country. The government will target to ensure farm loans worth 16.5 trillion rupees ($226 billion) in the next fiscal year. The minister also proposed to impose extra taxes on imports of some commodities, including edible oils, pulses, gold, silver and some alcoholic beverages to finance more infrastructure facilities in rural areas
RBI’s open market bond purchases have been instrumental in keeping sovereign yields anchored despite heavy debt sales. Therefore, bond traders will seek assurance of the continuation of these measures when Governor Shaktikanta Das announces the policy decision on Friday. However, the RBI’s intent of draining excess cash amid a crash in short-term rates may limit the extent of its support measures.
India’s (Markit) service PMIs are due on Wednesday
Reserve Bank of India’s decision on interest rates will be closely watched on Friday
“For a 5-trillion dollar economy, our manufacturing sector has to grow in double digits on a sustained basis. Our manufacturing companies need to become an integral part of global supply chains,” Finance Minister Nirmala Sitharaman said.
“Enhanced farm loans are expected to give a boost to the rural economy,” said Anand Ramanathan, a partner at Deloitte India. “This will not only help address issues related to low productivity in agriculture, but also have a ripple effect on other sectors such as agri-equipment manufacturers, agro-logistics and input providers.”
America Markets
U.S. stocks climbed in a broad-based rally on Monday trade, led by tech giants as several strategists said the recent explosion of speculative buying won’t derail the bull market in equities
The broad-based S&P 500 gained 59 points, or 1.6%, to 3,773
The Dow Jones Industrial Average, composed mostly of cyclical stocks, rose 229 points, or 0.8%, to 30,211
The tech-heavy Nasdaq Composite Index climbed 332 points, or 2.5%, to 13,403
U.S. equity futures declined in early Tuesday trade. S&P500 futures is up 0.42%; Dow Jones futures is up 0.35% and Nasdaq futures is up 0.58%
10-year U.S. Treasury yields edged higher to 1.08% on the day as dollar steadies at 90.89
The Cboe Volatility Index, known as Wall Street’s “fear gauge,” fell -8.61% to 30.24 on Monday
The ISM Manufacturing PMI fell to 58.7 in Jan. 2021 from 60.5 in Dec. 2020 which was the highest since Aug. 2018 and below market forecasts of 60. Still, the reading pointed to an 8th consecutive month of growth in factory activity and at a robust pace
The U.S. January payrolls report is due on Friday, providing a first look at hiring in 2021
“The retail versus hedge fund conflict unfolding currently should be much less severe than the roughly 10% drops that have been occurring almost annually for the past two decades,” JPMorgan strategists noted. “Our bubble tracker based on extreme price momentum, valuations and investor leverage isn’t flashing red at the asset class level, even if it might at the security level.”
Asia-Pacific Markets
Asian benchmark stocks opened higher in early Tuesday trade, after U.S. shares had their biggest rally in about 10 weeks
Japan’s Nikkei 225 added 0.74% to 28,297 and Topix 500 added 0.79% to 1,435
South Korea’s Kospi added 2.38% to 3,128
In Hong Kong, Hang Seng added 1.46% to 29,318 while Hang Seng China Enterprises added 1.90% to 11,666
In China, CSI 300 added 0.22% to 5,429 and Shanghai Composite dropped -0.14% to 3,500
Australia’s S&P/ASX 200 added 1.20% to 6,742
Japan looks set to extend a state of emergency this week for major metro areas, a move that will inflict more pain on the economy
South Korea’s export data, released on Monday, beat expectations by a little more than 1 percentage point, while the nation’s current-account balance is due Friday
Korea’s central bank governor warned against excessive borrowing that has spurred a rally in the country’s stock and property markets
South Korea is due to report January foreign-exchange levels on Wednesday. The Korean won was the worst-performing Asian currency in January
China releases its forex levels on Feb. 7
Reserve Bank of Australia’s Governor Philip Lowe is to announce a policy decision on Tuesday and release his quarterly Statement on Monetary Policy on Friday
EU Markets
European equities rose on Monday trade, bouncing from their worst weekly decline since October helped by a rise in shares of miners after an ongoing retail frenzy shifted its attention to silver
The pan-European Stoxx Europe 600 added 1.47% to 399 and Stoxx 50 added 1.42% to close at 3,530
Germany’s DAX30 added 1.41% to 13,622
London’s blue-chip FTSE 100 added 0.92% to 6,466
France’s CAC40 added 1.16% to 5,461
Denmark’s OMX Copenhagen 20 added 1.67% to 1,443
Spain’s IBEX 35 added 0.52% to 7,798
Italy’s FTSE MIB added 1.17% to 21,825
The Bank of England is preparing to take a significant step into the debate on whether negative interest rates should be used to stimulate the coronavirus-stricken U.K. economy
The U.K. will formally request to join an 11-member transpacific trading bloc, with negotiations expected to start later this year
Germany’s economy minister says tax increases are the wrong way to pay for the Covid crisis and proposed selling state assets instead
Oil & Natural Gas Markets
Crude-oil edged higher in early Tuesday trade, as optimism over demand rebounding this year gained traction and Saudi supply cuts went into effect
Saudi Aramco sees oil demand returning to pre-Covid levels in the later part of the year, saying it is confident the worst of the pandemic is now in the rearview mirror
WTI Crude is trading at $53.95 per barrel
Brent Crude is trading at $56.76 per barrel
Natural Gas futures is trading at $2.827/MMBtu
“The oil market continues to shake off any fears related to lockdown induced demand destruction as we see evidence that crude supply is shrinking at a faster rate than demand,” TD Securities commodities strategists including Bart Melek said in a note. “Crude oil markets remain in good shape to tighten in 2021, and the latest OPEC data suggest the cartel has been diligent in living up to their deal.”
“There’s a sense that normalcy will occur and it’s looking more certain,” boosting the outlook for oil demand, said Michael Lynch, president of Strategic Energy & Economic Research. Meanwhile, “the Saudi production cuts start today, and people are focused on falling inventories and how the market is tightening.”
Commodities Markets
Gold futures firmed above the $1,860 level in early Tuesday trade
U.S. Gold futures (Comex) is trading higher at $1,862 an ounce
Silver futures (Comex) is trading at $28.73 an ounce, jumping to an almost eight-year high aided by Reddit crowd
The calls to buy silver began appearing on WallStreetBets as early as Wednesday, when the mania surrounding GameStop reached a fever pitch
Copper futures (Comex) is trading at $3.5630 per pound
SGX Iron-Ore futures is trading lower $154.20 per tonne
In India, Spot Gold is trading at INR 48,677 per 10 grams
“As we evaluate the markets, it is difficult to know where silver’s price and demand will go in the coming day and weeks,” Ken Lewis, Apmex’s CEO said, adding that his firm is “locking up any metal we can find in the marketplace.”
Currency Markets
The U.S. dollar index, DXY pared overnight gains at 90.89 in early Tuesday trade
INR strengthened with USD / INR at 73.1840
JPY weakened with USD / JPY at 104.9500
CNY weakened with USD / CNY at 6.4679
EUR weakened with EUR / USD at 1.2069
GBP strengthened with EUR / GBP at 0.8826
GBP weakened with GBP / USD at 1.3675
| 3-Month LIBOR Rate | As on 01 Feb 2021 |
| US DOLLAR | 0.21 per cent |
| Euro | – 0.54 per cent |
| British Pound | 0.04 per cent |
| Swiss Franc | – 0.77 per cent |
| Japanese Yen | – 0.10 per cent |
Bitcoin
Bitcoin / U.S. Dollar added 0.15% in early Tuesday trade to $33,577 as of 07:30 a.m. I.S.T.
Cryptocurrencies have been buffeted recently by volatile retail-investor demand shaped online by Twitter feeds and Reddit forums
“Bitcoin is really on the verge of getting broad acceptance by conventional finance people,” Elon Musk said in the social audio app Clubhouse, adding he’s “late to the party.”
Bond Markets
Americas : 10 – Year Govt Bond Yields
United States : 1.08%
Canada : 0.88%
Europe, Middle East & Africa : 10 – Year Govt Bond Yields
Germany : -0.52%
United Kingdom : 0.32%
France : -0.28%
Italy : 0.62%
Netherlands : -0.45%
Asia Pacific : 10 – Year Govt Bond Yields
India : 6.06%
Japan : 0.05%
Australia : 1.14%
Hong Kong : 0.54%
Singapore : 1.02%
South Korea : 1.76%
Fund Flows on NSE, BSE and MSEI — 01 Feb 2021
FII/FPI Net Buy Rs 1,494.23 Crore in Capital Market
DII Net Sell Rs (90.46) Crore in Capital Market
Where We’ve Been Reading —
- Bloomberg
- The Wall Street Journal
- Reuters
- Trading Economics
- Axios
- Tech Crunch
- NSE Indices India
- Morningstar India
- The Star
- The Washington Post
- Harvard Business Review
- Business Standard
- The Economic Times
