Finance - Stock Market Forecast

Index Trend & Conditions – 08:30 a.m. I.S.T.

• Resistance for Nifty 50 is at 13,630 zone. For Friday, Dec 11, 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 up 0.25%, while the MSCI Emerging Market index is up 0.20%

• Trends on SGX Nifty indicate a gap-up opening with positive outlook in the morning session and a mixed outlook in the afternoon session, for Nifty 50 in India. The Nifty futures were trading 0.03% up at 13,531 on the Singaporean Exchange at 08:30 a.m. I.S.T.

• Contracts tied to U.S. futures slid on the day, with S&P500, Dow Jones and Nasdaq futures in red. A mixed outlook of Asia-Pacific trade in early Friday morning, a positive MSCI Asia-Pacific ex-Japan index, a weakening U.S. Dollar Index at 90.676 with 10-Year Treasury Yield edging higher at 0.910 and Gold futures strengthening on the day indicate a stable-to-positive outlook for Nifty 50 India

• The current mood in the market is bracing and non-committal

India Markets

NIFTY 50	OPEN	HIGH	LOW	CLOSE
Thursday	13,488	13,503	13,399	13,478

India stocks took a breather on Thursday trade, on the back of weak global cues, as investors booked profits

Nifty 50 dropped 50 points or -0.38% to 13,478, while the BSE Sensex dropped 144 points or -0.31% to 45,960

The index formed a Small Bearish Candle with long lower shadow on the daily scale, which indicated selling pressure at higher level, while every decline got bought into

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 dropped -0.83% ; Smallcap 250 index dropped -0.64% ; Nifty 500 dropped -0.36% ; Nifty Alpha 50 dropped -0.10% and Nifty Alpha Low Volatility 30 added 0.30%

On Sectoral Indices front, FMCG and Realty stocks were at the vanguard of the rally, while Media, PSU Bank, Financial Services and Auto stocks were the laggards on the day

Nifty P/E for Dec 10, 2020 is at 37.06, as recorded by NSE India

Bank Nifty opened negative and continued to move southward for most part of the session. However, it witnessed a good recovery in the last hour of the session. The index formed a small bearish candle on the daily scale, cutting 200 points or -0.65% to 30,510

India VIX dropped -1.10% from 18.92 to 18.71 levels. Lower volatility would suggest the bulls are getting a grip on the market and any decline may trigger buying in the market

Overnight Call Money rate weighted average stood at 3.15% 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 5.904%, while the rupee weakened to 73.7230 per U.S. dollar

On the stocks front, shares of agrochemicals firm UPL tanked nearly -11% after a whistleblower alleged that the promoters have siphoned off money

Shares of IRCTC declined over 10 per cent after the government kicked off an OFS to sell up to 2.40 crore shares or 15% of the paid-up equity share capital of IRCTC

America Markets

Wall Street stocks swung between gains and losses on Thursday trade, after a report showing applications for U.S. unemployment benefits surged last week and exceeded most estimates

The Dow Jones retreated 71 points or -0.2% to 29,998 and the S&P 500 lost 5 points or -0.1% to 3,668 ; while the Nasdaq added 67 points, or 0.5% to 12,406

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 slid in early Friday trade. S&P500 futures is down -0.31%, Dow Jones futures is down -0.33% and Nasdaq futures is down -0.28%

Yield on the 10-year Treasury note touched 0.908

Annual inflation rate in the US was unchanged at 1.2% in November of 2020, the same as in October and slightly higher than market forecasts of 1.1%

The number of Americans filing for unemployment benefits increased to 853K in the week ended December 5th, from the previous week’s revised level of 716K and well above market expectations of 725K

Adobe Systems (ADBE) released earnings per share at 2.81 USD, compared to market expectations of 2.65 USD

San Francisco-based Airbnb‘s scrip closed at $144.71 up 113% from the $68 initial public offering price, in its public debut. The home rental company now stands at a valuation of $100 billion

Asia-Pacific Markets

Asian stocks traded mixed in early Friday trade with shares rising in Hong Kong and South Korea while they slipped in Japan and Australia.

Japan’s Nikkei 225 dropped -0.54% to 26,612, with Topix 500 falling -0.09% to 1,378

South Korea’s Kospi added 0.89% to a fresh life high of 2,770

In Hong Kong, Hang Seng added 0.53% to 26,549 while Hang Seng China Enterprises added 0.43% to 10,462

In China, CSI 300 dropped -0.12% to 4,934 and Shanghai Composite dropped -0.32% to 3,363

Australia’s S&P/ASX 200 dropped -0.29% to 6,663

Singapore’s Straits Times Index added 0.66% to 2,843

Overall, MSCI Asia-Pacific, is down -0.29%

SoftBank Group Corp.’s paper profit on DoorDash Inc. hit $11.2 billion after the food delivery platform’s initial public offering, sending the Japanese company’s own stock surging for the second day in a row. DoorDash had priced IPO at $102 per share looking to raise $3.4 Billion. The shares closed at $189.51 on the first day of trading, almost 86% higher than the listing price. SoftBank’s stock climbed as much as 13% in Tokyo trading on Thursday, the most intraday since March. SoftBank paid less than $1 billion for its 20% stake. Now, DoorDash is worth $60 billion after shares climb 86%

China, the world’s top soybean importer, is getting an early jump on purchases from the U.S. for next year

EU Markets

ECB President Christine Lagarde gestures

European equities fell on Thursday trade, reversing from small earlier gains, after ECB chief Christine Lagarde said the bank expects the Eurozone GDP to expand by 3.9% next year, compared with its September forecast of 5%

The European Central Bank euro announced fresh stimulus measures broadly in line with expectations on Thursday. The interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.50% respectively. Policy makers have decided to increase the envelope of the Pandemic Emergency Purchase Programme (PEPP) by €500 billion to a total of €1,850 billion, extending the the horizon for net purchases under the PEPP to at least the end of March 2022. An older bond-buying program will continue to run at a monthly pace of €20 billion until shortly before interest rates rise

Full details of the ECB Press Release in the link :

European Central Bank / Monetary Policy / Press Release / 10 Dec 2020

The pan-European Stoxx Europe 600 dropped -0.36% to 393 and Stoxx 50 dropped -0.09% to close at 3,524

Germany’s DAX30 dropped -0.30% to 13,301

London’s FTSE 100 added 0.80% to close to 6,617

France’s CAC40 added 0.13% to 5,554

Denmark’s OMX Copenhagen 20 dropped -0.55% to 1,398

Italy’s FTSE MIB dropped -0.14% at 21,938

On the Brexit front, the meeting between Prime Minister Boris Johnson and EU Commission President Ursula von der Leyen produced no deal on Wednesday and both decided to try to reach an agreement by the weekend

Germany has reported 23,679 new coronavirus cases on Thursday, the biggest daily increase since the outbreak began, as the government struggles to curb the rapid spread of the pandemic even as the country had been under a partial lockdown since November

“Looking ahead, the news of prospective roll-outs of vaccines allows for greater confidence in the assumption of a gradual resolution of the health crisis,” ECB President Christine Lagarde told the conference. “However, it will take time until widespread immunity is achieved, while further resurgences in infections, with challenges to public health and economic prospects, cannot be ruled out.”

Oil & Natural Gas Markets

Crude oil looked seet for sixth weekly gain in early Friday trade, as progress on the vaccine front brightened the outlook for fuel consumption

Rising demand is not just from Asia but also from the U.K., which saw road fuel sales jump by almost 10% last week and Brazil, where fuel use has surpassed pre-virus levels. Still, it’s a less certain picture in the U.S., where gasoline consumption has dropped to the lowest since May

WTI Crude is trading higher at $46.93 per barrel

Brent Crude is trading higher at $50.34 per barrel

Natural Gas futures is edging up at $2.575/MMBtu after falling more than 18% in the last sessions

On MCX-India, Crude oil futures strengthened to 3,515 on Thursday trade

On MCX-India, Natural gas futures strengthened to 190/MMBtu on Thursday trade

“Now that we’ve already started the deployment of vaccines in some part of the world, there is optimism about the normalization of the global economy and therefore higher oil prices,” said Bart Melek, the head of global commodity strategy at TD Securities

Commodities Markets

Gold resumed upward momentum in early Friday trade. Progress on the vaccine front bolstered hopes for a swifter economic recovery weighed heavy on the bullion. The FDA said Pfizer/BioNTech Covid-19 vaccine “met the prescribed success criteria” clearing it for emergency use approval

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) steady at $1,837.68 an ounce

Silver futures (Comex) steady at $23.98 an ounce

Copper futures (Comex) weakened to $3.5575 per pound

In India, Spot Gold weakened to INR 48,369 per 10 grams

India — NCDEX Agridex

Agricultural futures index tracking the performance of the 10 liquid commodities, was up 1.61% trading at 1,156.70 ; with top gains in Guar Gum and Chana futures, while Castor Seed and Turmeric futures led losses on Thursday trade

Currency Markets

The U.S. dollar index, DXY lost momentum and is seen retreating in early Friday trade at 90.6760

INR weakened with USD / INR at 73.6662

JPY weakened with USD / JPY at 104.3900

CNY weakened with USD / CNY at 6.5440

EUR strengthened with EUR / USD at 1.2115

The Euro rose following a second burst of monetary stimulus, 500 billion euros

EUR strengthened with EUR / GBP at 0.9120

Pound is falling 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 10 Dec 2020*
US DOLLAR	0.23 per cent
Euro	– 0.57 per cent
British Pound	0.03 per cent
Swiss Franc	– 0.78 per cent
Japanese Yen	– 0.10 per cent