Index Trend & Conditions – 07:15 a.m. I.S.T.
• Resistance zone for Nifty 50 is at 15,260 15,321 and 15,425 for the week. For Friday, Mar. 12, Support area is seen at 15,166 15,090 14,870-850 and 14,760
• Support levels for Bank Nifty is at 35,700 35,080 and 34,737; while Resistance zone is at 36,470 and 36,580 for Mar. 12
• The MSCI Asia Pacific ex-Japan is trading higher 0.75%, and the MSCI Emerging Market index is up 0.69%
• Trends on SGX Nifty look poised for a 200 points gap-up opening for Nifty 50 in India. The Nifty futures are trading 6 points, or -0.03% lower at 15,414 on the Singaporean Exchange at 07:15 a.m. I.S.T.
• U.S. equity futures were mostly mixed in early morning trade with S&P 500 and Dow Jones dropping and Nasdaq futures in green territory; alongside a positive opening in Asia-Pacific benchmarks gauges in early Friday trade with stocks rising in Japan, Korea, Hong Kong and Australia; a positive MSCI Asia-Pacific ex-Japan index; U.S. Dollar sinking to 91.41 with 10-Yr Treasury Yields pulling back to 1.53% and Gold futures rising steadily to $1,725 indicate a stable-to-positive outlook amid witnessing channel-wise resistance
• U.S. households ended 2020 with a record $130.2 trillion in wealth, according to a Federal Reserve report on Thursday
India Markets
Domestic market were shut on Thursday, Mar 11 on account of Mahashivratri
Yield curve on the benchmark 10-year government bond eased to 6.37%, while the rupee strengthened to 72.6940 per U.S. dollar
India’s markets regulator, SEBI unveiled new rules that will limit investments by mutual funds in some debt instruments, after investors suffered losses from writedowns on riskier bonds last year
The regulations, which take effect April 1, relate to debt such as some securities sold by banks to boost their capital buffers, known as Additional Tier 1 or Tier 2 notes. The restrictions are:
• A mutual fund can own, under all its portfolios, at most 10% of such debt sold by a single issuer
• A debt portfolio can invest at most 10% of its net assets in such debt by all issuers and at most 5% of net assets in such debt sold by a single issuer
“Markets are expecting a rise in inflation due to the rapid increase in the monetary base across economies, and more recently the increase in commodities prices,” said Nagaraj Kulkarni, senior Asia rates strategist at Standard Chartered in Singapore. “However, central banks are more sanguine about their own inflation expectations so far.”
“The market is swept up by high intensity global reflation trade,” said Suyash Choudhary, head of fixed income at IDFC Asset Management. “Within this, India’s sensitivity to crude oil prices as well as the V-shaped rebound in economic activity may be creating divergent expectations of the monetary policy path ahead.”
America Markets
Wall Street’s benchmark indices jumped to an all-time high on Thursday trade, powered by a renewed rally in tech shares as Treasury yields show signs of stabilizing and a $1.9 trillion spending bill becoming a law
The broad-based S&P 500 climbed 43 points, or 1.11%, to settle at 3,942
The Dow Jones Industrial Average, composed mostly of cyclical stocks, rose 218 points, or 0.68%, to settle at 32,516
The tech-heavy Nasdaq Composite Index gained 330 points, or 2.55%, to settle at 13,401
U.S. equity futures mostly mixed in early Friday trade. S&P500 futures is down -0.10%; Dow Jones futures is down -0.19% and Nasdaq futures is up 0.17%
10-yr U.S. Treasury yields, which move inversely to the price, pulled back to 1.53% with dollar extending declines to 91.41
The Cboe Volatility Index, known as Wall Street’s “fear gauge,” fell -3.95% to 21.91 on Thursday
New filings for unemployment benefits last week neared their lowest level since the pandemic fueled a surge in layoffs last March, adding to evidence of renewed labor-market growth
Jobless claims a proxy for layoffs, fell to a seasonally adjusted 712,000 in the week ended Mar 6, down about 200,000 from an early Jan peak and close to a pandemic low point reached last Nov
U.S. households ended 2020 with a record $130.2 trillion in wealth, the Federal Reserve said in a report on Thursday. Balances in cash, checking accounts, and savings deposits rose by a combined $642.7 billion in the fourth quarter to a record $14.1 trillion. Household wealth rose $12 trillion from the year-earlier period, and consumers paid off a record $118.3 billion in credit card debt.
Market sentiment is getting a boost from Wednesday’s weaker-than-expected report on U.S. consumer prices, which eased concern about broader inflationary pressures
President Joe Biden signed his $1.9 trillion stimulus bill into law on Thursday, commemorating the one-year anniversary of a U.S. lockdown over the coronavirus pandemic with a measure designed to bring relief to Americans and boost the economy
Most Americans will be receiving direct payments of $1,400, with the money starting to go out within days
“It is one of the most far-reaching federal relief efforts to ever pass Congress and another reason to be confident of the outlook for U.S. equities,” said Willem Sels, chief investment officer at HSBC Private Banking and Wealth Management. “We think that the bond market has sold off too much.”
Asia-Pacific Markets
Asian benchmark stocks climbed higher in early Friday trade, after stronger risk appetite swept their U.S. peers to an all-time high on the passage of Washington’s $1.9 trillion stimulus package
Japan’s Nikkei 225 added 0.69% to 29,400 and Topix 500 added 0.50% to 1,504
South Korea’s Kospi added 1.38% to 3,055
In Hong Kong, Hang Seng added 0.01% to 29,390 and Hang Seng China Enterprises added 0.61% to 11,414
In China, CSI 300 added 0.32% to 5,144 and Shanghai Composite dropped -0.12% to 3,433
Australia’s S&P/ASX 200 added 0.92% to 6,775
Australia’s bid to reach a free-trade deal with Europe just got a little harder, due to its refusal to set a hard target to reach net-zero carbon emissions
Japan’s wholesale prices fell at a slower pace in February for a third straight month, offering an encouraging sign a recent rebound in fuel costs and pick-up in domestic demand will ease deflationary pressures across the economy
• The corporate goods price index dropped -0.7% YoY in Feb, which measures the price companies charge each other for their goods and services, follows a -1.5% annual decrease in Jan
• Domestic final goods prices, which loosely track the consumer price index, fell -0.1% YoY in Feb, following a -0.8% drop in Jan
Car sales in China jumped 365% YoY to 1.455 million in Feb, the 11th straight month of increases, as the automobile industry’s recovered further from the coronavirus crisis. Sales of new energy vehicles (NEVs), which include battery-powered electric, plug-in hybrid and hydrogen fuel-cell vehicles surged 585% YoY to 110 thousand units
China’s government outlined new economic targets last week, setting a goal of about 3% for consumer inflation for this year, down from 3.5% in 2020. It’s aiming for economic growth of more than 6%
“Metal prices were on the rise due to global fiscal stimulus money to be spent on infrastructure projects,” said Iris Pang, chief economist at ING Wholesale Banking. “If crude oil price keeps increasing it would push up other prices, like transportation, and therefore production cost, then it could generate inflation.”
EU Markets
European equities at fresh one-year peak on Thursday trade, as worries about a spike in inflation eased and the European Central Bank said it was ready to accelerate money-printing to keep a lid on euro zone borrowing costs
The pan-European Stoxx Europe 600 added 0.50% to 423 and Stoxx 50 added 0.67% to close at 3,845
Germany’s DAX30 added 0.20% to life high of 14,569
London’s blue-chip FTSE 100 added 0.17% to 6,737
France’s CAC40 added 0.72% to 6,033
Denmark’s OMX Copenhagen 20 added 0.84% to 1,451
Spain’s IBEX 35 added 0.80% to 8,539
Italy’s FTSE MIB added 0.82% to 24,121
France’s state-controlled power group EDF jumped 10.9% after Finance Minister Bruno Le Maire told local TV that there will be no break-up of the company as negotiations between Paris and Brussels over an overhaul of the company enter a final stage
The European Central Bank said it would accelerate its purchases of eurozone debt after a recent rise in borrowing costs, a surprise decision that diverges from the Federal Reserve as it seeks to shore up the region’s flagging economy
The ECB said it would use its 1.85 trillion Pandemic Emergency Purchase Programme (PEPP) more generously over the coming months to stop any unwarranted rise in debt financing costs. ECB President Christine Lagarde also warned against premature policy tightening
“Ongoing vaccination campaigns, together with the gradual relaxation of containment measures – barring any further adverse developments related to the pandemic – underpin the expectation of a firm rebound in economic activity in the course of 2021,” ECB President Christine Lagarde said. “We will purchase flexibly according to market conditions and with a view to preventing a tightening of financing conditions.”
“The market was concerned about rising yields which could lead to quickly shrinking equity risk premia in the euro zone,” said Florian Regnery, cross asset strategist at Commerzbank, noting the favourable reaction to the ECB’s commitment to contain rising bond yields
Oil & Natural Gas Markets
Crude-oil prices held onto gains in early Friday trade, with OPEC choosing to keep supply tighter for longer
A growing wave of fiscal stimulus and the continuing rollout of coronavirus vaccinations are helping to brighten this year’s outlooks for economic growth and oil demand, the Organization of the Petroleum Exporting Countries (OPEC) said on Thursday
Major banks had upgraded price forecasts. Goldman Sachs raised its Brent forecasts by $5 a barrel and now sees the global crude benchmark at $80 in Q3. JPMorgan increased its Brent projection by $2 to $3 a barrel and Australia & New Zealand Banking Group Ltd. boosted its 3-month target to $70. Citigroup said crude could top $70 before the end of March
WTI Crude is trading at $66.01 per barrel
Brent Crude, the international benchmark for oil, is trading at $69.60 per barrel
Natural Gas futures is trading lower at $2.664/MMBtu
Commodities Markets
Gold futures facing headwinds in early Friday trade, amid a pick up in recovery phase. It is down more than 8% this year, while a gauge of the U.S. currency has risen about 1.8%
Global money manager BlackRock warned that bullion is proving to be a less effective equity hedge against moves in stocks, as well as inflation. Gold has lost ground in 2021 as the recovery from the pandemic gained more traction and Treasury yields surged
Gold’s recent correlation with stocks and inflation has been positive to effectively zero, it is still demonstrating a strong, negative relationship with the dollar. For this reason, gold should probably still be thought of as a dollar hedge
U.S. Gold futures (Comex) is trading at $1,727 an ounce
Silver futures (Comex) is trading at $26.12 an ounce
Gold / Silver Ratio declined to $66.05
Copper futures (Comex) steadied at $4.1145 per pound
Citigroup forecasts copper prices will rally to $5 per pound in six to 12 months on a better-than-expected recovery in demand, most notably outside China
SGX Iron-Ore futures is trading at $169.90 per tonne
In India, Spot Gold is trading at INR 44,744 per 10 grams
Currency Markets
U.S. dollar index, DXY remained lower at 91.41 in early Friday trade, after pulling back from multi-month high as a retreat in Treasury yields reduced the currency’s appeal
INR strengthened with USD / INR at 72.6940
JPY weakened with USD / JPY at 108.4600
CNY strengthened with USD / CNY at 6.4938
EUR strengthened with EUR / USD at 1.1982
GBP weakened with EUR / GBP at 0.8567
GBP strengthened with GBP / USD at 1.3986
“Usually, a healthy U.S. economy benefits the rest of the world. But the explosive rebound in U.S. growth is allowing the dollar a three to six month advantage over other currencies,” said Aaron Hurd, a portfolio manager who helps manages $145.3 billion in assets at State Street Global Markets. “This is about the differential pace of economic recovery, and the macro risk sentiment due to the potential for occasional risk-off moves.”
| 3-Month LIBOR Rate | As on 11 Feb 2021 |
| US DOLLAR | 0.18 per cent |
| Euro | – 0.55 per cent |
| British Pound | 0.08 per cent |
| Swiss Franc | – 0.75 per cent |
| Japanese Yen | – 0.09 per cent |
Bitcoin
Bitcoin / U.S. Dollar fell 1.25% in early Friday trade to $57,050 as of 07:15 a.m. I.S.T.
Bitcoin has rallied to a two-week high as a risk-on sentiment returned following selloffs in more speculative corners of financial market
“Bitcoin is unlikely to be a great ‘flight to safety’ play going further,” Matt Maley, chief market strategist at Miller Tabak + Co. said. “Instead, we feel that it is more of a ‘risk-on/risk-off’ play. Therefore, if we see a deeper decline in the stock market, then we think that Bitcoin will likely see a decent decline.”
Bond Markets
Americas : 10 – Year Govt Bond Yields
United States : 1.53%
Canada : 1.43%
Europe, Middle East & Africa : 10 – Year Govt Bond Yields
Germany : -0.34%
United Kingdom : 0.73%
France : -0.10%
Italy : 0.60%
Netherlands : -0.21%
Asia Pacific : 10 – Year Govt Bond Yields
India : 6.37%
Japan : 0.09%
Australia : 1.64%
Hong Kong : 1.07%
Singapore : 1.49%
South Korea : 2.02%
Fund Flows on NSE, BSE and MSEI — 10 Mar 2021
FII/FPI Net Sell Rs (15.69) Crore in Capital Market
DII Net Buy Rs 447.67 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
