Finance - Stock Market Forecast

Index Trend & Conditions – 08:10 a.m. I.S.T.

• Resistance for Nifty 50 is at 13,636 zone. For Thursday, Dec 10, Support area is seen at 13,400 and 13,330

• Support area for Bank Nifty is at 30,200 — 30,250 zone

• The MSCI Asia Pacific ex-Japan is down -0.33%, while the MSCI Emerging Market index is down -0.30%

• Trends on SGX Nifty indicate a gap-down opening with negative outlook for Nifty 50 in India with a 60 points loss. The Nifty futures were trading at 13,505 on the Singaporean Exchange at 08:10 a.m. I.S.T.

• Contracts tied to U.S. futures wavered on the day after the gauge slid from a record, with S&P500 and Dow Jones futures in green while Nasdaq futures traded in red. A negative outlook of Asia-Pacific trade in early Thursday morning, a negative MSCI Asia-Pacific ex-Japan index, weakening U.S. Dollar Index at 91.039 with 10-Year Treasury Yield sliding at 0.926 and Gold futures strengthening on the day 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
Wednesday	13,458	13,548	13,449	13,529

India stocks rose, in line with peers in Asia on Wednesday trade as investors remained optimistic about a U.S. stimulus deal and steady foreign inflows continued

Nifty 50 added 136 points or 1.02% to a fresh all-time high 13,529, while the BSE Sensex added 495 points or 1.09% to a new high of 46,103

The index formed a bullish candle on the daily scale and witnessed strong buying momentum for most part of the session

Foreign net equity purchases of nearly $18 billion so far this year as of Dec. 7 are already the most since 2013 as funds pour in, chasing returns. The relative strength (RSI) index on both the Sensex and Nifty is over 70, a level that some traders read as overbought

Broader markets under-performed their headline peers — Midcap 100 index added 0.61% ; Smallcap 250 index added 0.76% ; Nifty 500 added 0.83% ; Nifty Alpha 50 added 0.09% and Nifty Alpha Low Volatility 30 added 0.37%

On Sectoral Indices front, Media and Private Bank stocks were at the vanguard of the rally, while PSU Bank, Metal and Auto stocks were the laggards on the day

Nifty P/E for Dec 09, 2020 is at 37.20, as recorded by NSE India

Bank Nifty opened positive and gradually extended the gains towards 30,800 level in the latter part of the session. The index formed a bullish candle on the daily scale, as strong buying emerged in major private banks, adding 450 points or 1.5% to 30,709

India VIX gained 1.61% from 18.62 to 18.92 levels. Higher volatility would suggest the bears are getting a grip on the market and any decline may trigger selling 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 — 3.50% for Dec 08

The yield on the benchmark 10-year Government Bonds fell to 5.92%, while the rupee weakened to 73.5650 per U.S. dollar

On the stocks front, HDFC Bank Ltd. contributed the most to the Sensex advance, increasing 2.2%, while Asian Paints Ltd. had the largest gain, rising 3.4%

Shares of YES Bank rallied nearly 10% on Wednesday after the bank said that Brickwork Ratings has upgraded the rating on Tier I Subordinated Perpetual Bonds

Govt to sell 20% stake in IRCTC via Offer for Sale, to raise Rs 4,374 crore

“The exuberance is likely to continue since the market remains flush with liquidity,” said Kranthi Bathini, a strategist at Mumbai-based WealthMills Securities Ltd. “The vaccine rollout and a possible U.S. stimulus deal are driving positive sentiment across the world.”

“The strong performance of equity markets in November seems to have encouraged more investors to book profits and move to short-term investments,” according to G. Pradeepkumar, chief executive officer at Union Asset Management Co. “There is a significant amount of money that can come back to the market in the event of any correction. The medium-to-long term potential remains strong.”

America Markets

Wall Street stocks wavered on Wednesday trade, as traders assessed prospects for a U.S. stimulus deal amid fears about resurgent coronavirus cases

The Dow Jones retreated 105 points or -0.4% to 30,065 and the S&P 500 lost 29 points or -0.8% to 3,673 ; while the Nasdaq dropped 243 points, or -1.9% to 12,339 advancing for a 10th straight day, the longest rally in about a year

U.S.’s weekly Cboe ratio of volume traded in puts versus calls fell to the lowest since July 2000 last week, signalling extreme positioning to the upside, as investors look beyond short-term uncertainty toward a continuing global recovery in 2021

Contracts tied to U.S. futures ticked higher in early Thursday trade. S&P500 futures is up 0.06%, Dow Jones futures is up 0.09% and Nasdaq futures is down -0.12%

Yield on the 10-year Treasury note ticked lower to 0.926

On the stimulus front, Treasury Secretary Steven Mnuchin presented a $916 billion coronavirus relief proposal to House Speaker Nancy Pelosi, opening up a potential new path to a year-end deal

Top central banks are embarking on fresh waves of bond-buying, with the European Central Bank expected to increase its purchase plans when it meets on Thursday

On the stocks front, Facebook Inc. sank after being sued by U.S. antitrust officials. Tesla Inc. fell after JPMorgan Chase & Co. said the electric-car maker is “dramatically” overvalued

Jobless claims data are due in the U.S. on Thursday

Asia-Pacific Markets

Asian stocks saw modest declines in early Thursday trade after U.S. technology giants dragged Wall Street benchmarks lower amid dimming prospects for fresh stimulus

Japan’s Nikkei 225 dropped -0.33% to 26,728, with Topix 500 falling -0.14% to 1,379

South Korea’s Kospi dropped -0.04% to 2,754

In Hong Kong, Hang Seng dropped -0.34% to 26,416 while Hang Seng China Enterprises dropped -0.45% to 10,442

In China, CSI 300 added 0.19% to 4,951 and Shanghai Composite added 0.10% to 3,375

Australia’s S&P/ASX 200 dropped -0.62% to 6,687

Singapore’s Straits Times Index dropped -0.53% to 2,828

Overall, MSCI Asia-Pacific, is up 0.63%

China state-backed covid vaccine has 86% efficacy as per United Arab Emirates report after the data from trials that included 31,000 volunteers in the UAE, found the vaccine highly effective

China’s yuan weakened as much as 0.26% to 6.5490 per dollar, minutes before Wednesday’s official close, reversing an earlier gain that had pushed the currency to its strongest level in more than two years. It is reported that a few large Chinese banks were seen buying dollars in large volumes on the mentioned day

China’s 32 year old state-linked firm Tsinghua Unigroup said it won’t be able to repay the principal on a $450 million dollar bond due Thursday, which would trigger cross defaults on a further $2 billion of debt. This would be the first dollar bond default by the Chinese chipmaker, which had defaulted on a 1.3 billion yuan ($199 million) local bond in mid-November

EU Markets

European equities were slightly up on Wednesday trade

Investors await developments in post-Brexit trade talks just ahead of a highly anticipated EU summit on a stimulus package and an ECB policy meeting Thursday, which will probably see policymakers announcing fresh monetary stimulus

The pan-European Stoxx Europe 600 added 0.36% to 394 and Stoxx 50 added 0.23% to close at 3,533

Germany’s DAX30 added 0.55% to 13,348

London’s FTSE 100 added 0.26% to close to 6,575

France’s CAC40 dropped -0.25% to 5,546

Denmark’s OMX Copenhagen 20 added 0.96% to 1,406

Italy’s FTSE MIB added 0.01% at 22,056

Thursday brings the European Central Bank policy decision and a press briefing from Christine Lagarde. Economists widely expect the central bank to increase and extend its pandemic bond-buying program

Oil & Natural Gas Markets

Crude oil retreated for a fourth day in early Thursday trade after EIA data showed a surprise increase in U.S. crude inventories of 15.189 million barrels in the previous week, most since April

WTI Crude is trading lower at $45.39 per barrel

Brent Crude is trading lower at $48.78 per barrel

Natural Gas futures is edging up at $2.475/MMBtu after falling more than 18% in the last sessions

On MCX-India, Crude oil futures weakened to 3,355 on Wednesday trade

On MCX-India, Natural gas futures strengthened to 183/MMBtu on Wednesday trade

“It’s a bloodbath, there’s not really much of anything to be positive about,” said Matt Sallee, portfolio manager at Tortoise, a firm that manages roughly $8 billion in energy-related assets. “The mobility data is going to tick down with the infection rate so high. As the the vaccine gets rolled out, that part will improve, but it’s going to be an issue for the time being.”

Gold & Silver Markets (+ Copper Futures)

Gold declined from a two-week high in early Thursday trade, as investors weighed vaccine roll-outs against surging Covid-19 cases and fresh hopes for a U.S. stimulus deal

According to JP Morgan quantitative strategists, money has poured into Bitcoin funds and out of gold since October, as more institutional investors take a position in cryptocurrencies. Digital currencies have become increasingly popular as an asset class

U.S. Gold futures (Comex) weakened to $1,843.40 an ounce

Silver futures (Comex) weakened to $24.11 an ounce

Copper futures (Comex) strengthened to $3.5060 per pound

In India, Spot Gold weakened to INR 48,460 per 10 grams

India — NCDEX Agridex

Agricultural futures index tracking the performance of the 10 liquid commodities, was down -0.78% trading at 1,136.65 ; with top gains inCoriander and Cotton Seed OIlcake futures, while Chana and Soy Bean futures led losses on Wednesday trade

Currency Markets

The U.S. dollar index, DXY is gaining upside momentum in early Thursday trade at 91.045

INR weakened with USD / INR at 73.5625

JPY weakened with USD / JPY at 104.2100

CNY weakened with USD / CNY at 6.5435

EUR strengthened with EUR / USD at 1.2090

EUR strengthened with EUR / GBP at 0.9044

Pound fell amid a stalemate in Brexit negotiations

“In the case of a no deal Brexit, we expect a profound GBP collapse — EUR/GBP above 0.95, possibly briefly touching parity — due to the fact that this outcome would come as a surprise and investors have not been pricing this in,” ING Groep NV strategists including Petr Krpata wrote in a note.

*3-Month LIBOR Rate*	*As on 09 Dec 2020*
US DOLLAR	0.23 per cent
Euro	– 0.56 per cent
British Pound	0.03 per cent
Swiss Franc	– 0.78 per cent
Japanese Yen	– 0.10 per cent