Finance - Stock Market Forecast

Index Trend & Conditions – 07:30 a.m. I.S.T.

• For Wednesday, Feb. 10, Support area for Nifty 50 will be at 15,045 and 14,878

• Resistance zone for Bank Nifty is at 36,208 and 36,615 for Feb. 10

• The MSCI Asia Pacific ex-Japan is trading higher 0.56%, and the MSCI Emerging Market index is up 0.49%

• Trends on SGX Nifty look primed for a positive opening for Nifty 50 in India. The Nifty futures are trading 33 points, or 0.22% higher at 15,150 on the Singaporean Exchange at 07:45 a.m. I.S.T.

• U.S. equity futures rose in early morning trade with S&P 500 and Dow Jones and Nasdaq futures trading in green; alongside a upwardly-momentum start to most Asia-Pacific benchmarks gauges in early Wednesday trade; a positive MSCI Asia-Pacific ex-Japan index; U.S. Dollar languishing near its lowest at 90.46 with rising 10-Yr Treasury Yields at 1.16% and Gold futures continuing to push higher to $1,840 on the day indicate stable-to-positive outlook for Nifty 50 India

India Markets

NIFTY 50	OPEN	HIGH	LOW	CLOSE
Tuesday	15,164	15,257	15,064	15,109

India’s equity benchmarks took a breather on Tuesday trade, forming a Spinning Top-like indecisive candle on the daily chart

The blue-chip NSE Nifty 50 index dropped 6.5 points or -0.04% at 15,109 and the benchmark S&P BSE Sensex lost 20 points or -0.04% at 51,329

Broader markets out-performed headline peers — Midcap 100 index dropped -0.08%; Smallcap 250 index dropped -0.44% and Nifty 500 dropped -0.06%

Nifty P/E for Feb 09 2021 decreased from 42.00 to 41.97, and Nifty P/B stayed unchanged at 4.28, as recorded by NSE India

Bank Nifty opened flat and drifted towards the 35,600 mark in the initial hour of trade. However, it recovered sharply from lower levels and extended its momentum towards the 36,500 level. The index is sustaining well above its breakout range of 32,600; adding 72 points, or 0.20%, to 36,056

India VIX or Fear gauge increased 1.30% from 23.95 to 24.27 levels. It needs to cool down and hold below 21 level for a continuation in the ongoing momentum

Overnight Call Money rate weighted average stood at 3.23% as per RBI data. It moved in a range of 1.90 — 3.50% for Feb 08

Yield on the benchmark 10-year government bond rose sharply to 6.16%, while the rupee strengthened to 72.8850 per U.S. dollar

The tussle between two of the world’s richest men – Jeff Bezos and Mukesh Ambani – to dominate India’s estimated $1 trillion retail market is testing foreign investor patience with flip-flopping court rulings. Future Retail had argued in court that the pact with another group firm doesn’t bind it and the Singapore’s emergency arbitration order wasn’t enforceable in India. That prompted Amazon to petition the Delhi High Court to ensure compliance. A detailed hearing of the case will be held from Feb. 26

India sees economy bouncing back with a 35 lakh crore rupees or $480 billion budget. While Prime Minister Narendra Modi’s administration sees a 26% jump in capital expenditure for the year starting April 1, the increase in total spending is less than 1 percentage point. That’s partly due to cuts or slim increases for some social sector programs, even after the government has spent a record this fiscal year on rural jobs and food programs

“India is well qualified to be the world’s alternative to the China supply chain,” said P.N. Sudarshan, partner at Deloitte India. “Once component makers move, vibrant manufacturing clusters will form.”

America Markets

https://images.wsj.net/im-296746?width=1260&size=1.5 — House Democrats led by Speaker Nancy Pelosi are forging ahead with a coronavirus-relief spending plan

Wall Street’s main indexes edged lower after a six-day rally on Tuesday trade, as investors debated whether commitments by the Federal Reserve and the Biden administration to let the economy run hot will spark destabilizing inflation

The broad-based S&P 500 edged down 4.36 points, or -0.1%, to 3,911; after the benchmark gauge posted its eighth all-time closing high of 2021 on Monday

The Dow Jones Industrial Average, composed mostly of cyclical stocks, fell 9.93 points, or less than -0.1%, to 31,375

The tech-heavy Nasdaq Composite Index rose 20.06 points, or 0.1%, to 14,007, a record

U.S. equity futures rose in early Wednesday trade. S&P500 futures is up 0.18%; Dow Jones futures is up 0.27% and Nasdaq futures is up 0.29%

10-year U.S. Treasury yields increased to 1.16% on the day, with dollar staying lower at 90.46

The Cboe Volatility Index, known as Wall Street’s “fear gauge,” rose 1.84% to 21.63 on Tuesday

The number of job openings in the U.S. rose by 74K from the previous month to 6.646 million in Dec. 2020, compared with market expectations of 6.5 million but remaining below its pre-pandemic level of 7 million

The NFIB small business optimism index in the U.S. edged down to 95 in Jan. 2021 from 95.9 in Dec., a new low since May, mainly due to weaker expectations of business conditions and sales in the short-term

House Democrats released the biggest piece of their coronavirus relief bill late Monday, offering a measure that would extend a $400-a-week unemployment insurance payment through Aug. 29 and send $1,400 per-person payments to most households. It will be combined with pieces advancing through other House committees with the aim of getting through the full House later this month

“We are getting to the point where we have to start worrying about the risk of how do we pull back on that stimulus, will it cause the economy to overheat, are these valuations becoming too expensive,” Saira Malik, Nuveen head of global equities, said.

Asia-Pacific Markets

Asian benchmark stocks mostly opened positive in early Wednesday trade

Stocks dipped in South Korea, though rising in Japan, Hong Kong, China and Australia

Japan’s Nikkei 225 added 0.06% to 29,524 and Topix 500 added 0.29% to 1,503

South Korea’s Kospi dropped -0.10% to 3,082

In Hong Kong, Hang Seng added 1.67% to 29,965 while Hang Seng China Enterprises added 1.67% to 11,798

In China, CSI 300 added 1.38% to 5,763 and Shanghai Composite added 0.58% to 3,623

Australia’s S&P/ASX 200 added 0.55% to 6,859

China’s factory prices rose in annual terms in January for the first time in 12 months and at the fastest rate since May 2019, suggesting gathering growth momentum for the world’s second-largest economy. The producer price index (PPI) rose 0.3% from a year earlier. PPI declined 0.4% in December

The Chinese economy is expected to grow 8.4% this year, following a 2.3% rise in 2020

China’s factory activity grew at the slowest pace in five months in January

The consumer price index (CPI) unexpectedly fell -0.3% in January from a year earlier

EU Markets

European equities dipped on Tuesday trade, as a recent rally powered by hopes of a swifter global economic recovery and vaccine roll-outs showed signs of cooling, while shares in French oil major Total rose after its earnings recovered in the fourth quarter

The pan-European Stoxx Europe 600 dropped -0.17% to 409 and Stoxx 50 dropped -0.25% to close at 3,656

Germany’s DAX30 dropped -0.29% to 14,019

Germany’s DAX index was down even as data showed German exports rose in December as robust trade with China and the United States helped

London’s blue-chip FTSE 100 added 0.10% to 6,530

France’s CAC40 dropped -0.06% to 5,682

Denmark’s OMX Copenhagen 20 dropped -0.44% to 1,461

Spain’s IBEX 35 dropped -1.36% to 8,107

Italy’s FTSE MIB dropped -0.33% to 23,348

Italy’s industrial production went down 0.2% from a month earlier in Dec. 2020, following a 1.4% drop in Nov., missing to market expectations of a 0.3% growth

Sweden will set monetary policy on Wednesday while Bank of Russia’s policy decision is up on Friday

“There is this view that Europe is getting a bump in business investment which I think is right, because when that consumer spending is unleashed, it will lift corporate profits, which have so far been the field indicators of business investments,” said Mike Bell, global market strategist at J.P. Morgan Asset Management

Oil & Natural Gas Markets

Crude-oil prices continues to climb in early Wednesday trade, after industry data showed a fall in U.S. crude oil stocks

Crude inventories fell by 3.5 million barrels in the week to Feb. 5 to about 474.1 million barrels, as per data from the American Petroleum Institute on Tuesday

Top exporter Saudi Arabia is curbing supply in February and March, on top of cuts by producers in the OPEC and their allies, prompting forecasts of a supply deficit this year

WTI Crude is trading higher at $58.36 per barrel

Brent Crude, the international benchmark for oil, is trading higher at $61.17 per barrel

Natural Gas futures is trading lower at $2.822/MMBtu

“Given the amount of liquidity in the system thanks to the U.S. Fed (Federal Reserve), all asset prices are inflated. We see prices reaching $80 per barrel next year,” said Amrita Sen, co-founder of the Energy Aspects think tank

Commodities Markets

Gold futures continues to rise in early Wednesday trade, for 4-straight sessions

Long-term appeal of Gold remains high on the back of record-high debt levels

U.S. Gold futures (Comex) is trading higher at $1,840 an ounce

Silver futures (Comex) is trading higher at $27.37 an ounce

Copper futures (Comex) is trading higher at $3.7065 per pound

SGX Iron-Ore futures is trading higher at $158 per tonne

In India, Spot Gold is trading at INR 47,858 per 10 grams

Currency Markets

U.S. dollar index, DXY came under heavy selling pressure this week, slipping to 90.46 in early Wednesday trade

INR strengthened with USD / INR at 72.8850

JPY strengthened with USD / JPY at 104.5300

CNY strengthened with USD / CNY at 6.4353

EUR strengthened with EUR / USD at 1.2097

GBP strengthened with EUR / GBP at 0.8769

GBP strengthened with GBP / USD at 1.3794

*3-Month LIBOR Rate*	*As on 09 Feb 2021*
US DOLLAR	0.19 per cent
Euro	– 0.55 per cent
British Pound	0.05 per cent
Swiss Franc	– 0.76 per cent
Japanese Yen	– 0.09 per cent