Finance - Stock Market Forecast

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

• For Monday, Feb. 15, Support area for Nifty 50 will be at 15,115 15,045 and 14,878

• Resistance zone for Bank Nifty is at 36,208 and 36,615 for Feb. 15

• The MSCI Asia Pacific ex-Japan is trading higher 0.45%, and the MSCI Emerging Market index is up 0.36%

• Trends on SGX Nifty look poised for a positive opening for Nifty 50 in India. The Nifty futures are trading 70 points, or 0.45% higher at 15,225 on the Singaporean Exchange at 07:30 a.m. I.S.T.

• U.S. equity futures edged higher in early morning trade with S&P 500 and Dow Jones and Nasdaq futures trading in green; alongside an outperforming start to Asia-Pacific benchmarks gauges in early Monday trade amid lunar holidays in Chinese indices; a positive MSCI Asia-Pacific ex-Japan index; U.S. Dollar weakening to below 90.40 with 10-Yr Treasury Yields at 1.21% (Friday) and Gold futures climbing to $1,826 on the day indicate positive outlook for Nifty 50 India

• Stocks began the week on the front foot amid signs the reflation trade has further to run and as the pace of coronavirus outbreaks slowed further

India Markets

NIFTY 50	OPEN	HIGH	LOW	CLOSE
Friday	15,186	15,243	15,081	15,163

India’s equity benchmarks closed with slight gains on Friday trade

The blue-chip NSE Nifty 50 index dropped 10 points or -0.07% to 15,163 and the benchmark S&P BSE Sensex added 12 points or 0.02% at 51,544

Most broader markets under-performed headline peers — Midcap 100 index dropped -0.23%; Smallcap 250 index dropped -0.14% and Nifty 500 dropped -0.04%

Nifty P/E for Feb 12 2021 decreased from 41.65 to 41.58, and Nifty P/B unchanged at 4.30, as recorded by NSE India

Bank Nifty opened flat but extended its positive move gradually towards the 36,300 mark amid buying interest in select private banks. The index has added 356 points, or 1.00%, to 36,108

India VIX or Fear gauge decreased -4.35% from 23.04 to 22.04 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 3.25% as per RBI data. It moved in a range of 1.90 — 3.50% for Feb 11

Yield on the benchmark 10-year government bond increased to 6.10%, while the rupee strengthened to 72.7550 per U.S. dollar

Foreign portfolio investors (FPIs) have pumped in a net 22,038 crore rupees into the Indian markets in Feb. so far amid positive sentiments around the Union Budget

According to depositories data, overseas investors poured in 20,593 crore rupees into equities and 1,445 crore rupees in the debt segment, taking the total net investment to 22,038 crore rupees during Feb. 1-12

In January, FPIs were net investors to the tune of 14,649 crore rupees

RBI bought 50,000 crore rupees ($6.9 billion) of bonds through announced open-market operations and discreet secondary market purchases, according to estimates by Emkay Global Financial Services Ltd., making yields on the 10-year note dip 8 basis points, its biggest drop in 10 weeks

Retail price inflation fell to 4.06% in Jan. 2021 from 4.59% in Dec. 2020. It is the lowest reading since Sep. 2019 and below market forecasts of 4.45%. The inflation rate stayed within the central bank’s target of 2-6% for the second consecutive month

Food inflation slowed sharply to 1.89% from 3.41%, mainly due to a 15.84% slump in vegetables prices

On the other hand, prices increased slightly more for pan, tobacco and intoxicants (10.87% vs 10.74%), housing (3.25% vs 3.21%), fuel and light (3.87% vs 2.99%), and clothing and footwear (3.82% vs 3.49%)

“Sectors like private banks, consumer, FMCG and IT have seen foreign flows as Indian companies have exhibited resilience and demonstrated growth post lifting of the lockdown restrictions in third quarter,” S Ranganathan, head of research at LKP Securities said.

America Markets

Soybeans are harvested from a field on Hodgen Farm in Roachdale, Indiana, U.S.

Wall Street’s main indexes closed higher on Friday trade

The U.S. stock market will be closed on Monday because of the Presidents Day holiday

The broad-based S&P 500 gained 18 points, or 0.47%, to 3,934

The Dow Jones Industrial Average, composed mostly of cyclical stocks, rose 27 points, or 0.09%, to 31,458

The tech-heavy Nasdaq Composite Index added 69 points, or 0.5%, to 14,095

U.S. equity futures edged higher in early Monday trade. S&P500 futures is up 0.32%; Dow Jones futures is up 0.33% and Nasdaq futures is up 0.34%

10-yr U.S. Treasury yields, which move inversely to the price, climbed to 1.21% on Friday, with dollar consolidating below 90.40

The Cboe Volatility Index, known as Wall Street’s “fear gauge,” ended below 20 for the first time since February 2020

The University of Michigan’s consumer sentiment for the U.S. fell to 76.2 in Feb. 2021 from 79 in Jan., well below market forecasts of 80.8

Inflation expectations for the year ahead increased to 3.3% from 3% while the 5-year outlook was unchanged at 2.7%

On the corporate side, Shares of Disney erased earlier gains and closed lower after posting strong growth in paid streaming subscribers, reaching almost 95 million on its Disney+ service

The U.S. budget deficit will be wider than previously forecast this year because of a coronavirus relief package approved in December, but smaller over the next decade amid stronger economic growth, according to the Congressional Budget Office

“We’re underestimating the lag effect of all the money in the system as more and more vaccinations are delivered and as more of the country reopens,” said Thomas Hayes, chairman and managing member of hedge fund Great Hill Capital LLC in New York. “We are continuing this rotation that would be consistent with the new business cycle, and as (bond) yields go up, value and cyclicals will lead.”

Asia-Pacific Markets

Asian benchmark stocks advanced to record highs in early Monday trade

South Korean shares outperformed and Japanese equities were higher, with the Nikkei 225 hitting 30,000 for the first time since 1990

Japan’s Nikkei 225 added 1.04% to 29,828 and Topix 500 added 0.80% to 1,518

South Korea’s Kospi added 1.31% to 3,142

In Hong Kong, Hang Seng and Hang Seng China Enterprises are closed for a holiday

In China, CSI 300 and Shanghai Composite are closed for a holiday until Thursday 18th

Australia’s S&P/ASX 200 added 0.89% to 6,865

China’s fourth-quarter current-account figures will be released on Friday. Net foreign exchange settlements data for January will be closely watched after the very strong spike in corporate conversion rates in December

Japan’s GDP grew an annualized 12.7% from the prior quarter in the three months through December, the Cabinet Office reported Monday. Economists had forecast a 10.1% expansion

EU Markets

European equities reversed earlier losses to close higher on Friday trade, led by ASML and L’Oreal, although a dip in Volkswagen weighed on Germany’s main index

The pan-European Stoxx Europe 600 added 0.68% to 412 and Stoxx 50 added 0.65% to close at 3,695

Germany’s DAX30 added 0.06% to 14,049

London’s blue-chip FTSE 100 added 0.94% to 6,589

France’s CAC40 added 0.60% to 5,703

Denmark’s OMX Copenhagen 20 added 1.64% to 1,500

Spain’s IBEX 35 added 0.22% to 8,055

Italy’s FTSE MIB added 0.44% to 23,410

Among individual stocks, ASML Holding rose 3% after the Dutch equipment maker said the chip shortages slowing car production were a symptom of a broader increase in demand

Britain’s coronavirus-ravaged economy shrank -9.9% in 2020, the biggest annual fall in output since modern records began, but it avoided heading back towards recession at the end of last year. GDP grew by 1.0% in Oct – Dec quarter of 2020

“We believe a hospitalization rate low enough to enable sustainable reopening and economic recovery can be achieved by April in the U.S. and by June in Europe,” said Mark Haefele, chief investment officer at UBS Global Wealth Management

Oil & Natural Gas Markets

Crude-oil prices breached $60 dollars a barrel in early Monday trade, as hopes of a stimulus bill in the U.S. nudged sentiment higher

Prices are driven mainly by cuts in supply, as the OPEC ratcheted down expectations for global oil demand to recover in 2021, cutting its forecast by 110K barrels per day to 5.79 million bpd

WTI Crude is trading higher at $60.81 per barrel

Brent Crude, the international benchmark for oil, is trading higher at $63.61 per barrel

Natural Gas futures is trading lower at $2.878/MMBtu

“If there was one thing to be concerned about, it was that gasoline inventories built,” said Brian Kessens, a portfolio manager at Tortoise, a firm that manages roughly $8 billion in energy-related assets.

Commodities Markets

Gold futures dipped in early Monday trade, as the dollar steadied and stimulus hopes intensified

A pick-up in risk appetite may dent gold’s appeal, the threats posed by record-high debt levels should drive prices higher in the long-run

U.S. Gold futures (Comex) is trading lower at $1,826 an ounce

Silver futures (Comex) is trading higher at $27.59 an ounce

Copper futures (Comex) is trading higher at $3.8295 per pound, a level not seen since Feb 2013

SGX Iron-Ore futures weakened to $160.80 per tonne

In India, Spot Gold is trading at INR 47,260 per 10 grams

Currency Markets

U.S. dollar index, DXY weakened to 90.38 in early Monday trade

Dollar’s weakness is likely to continue well into 2021 amidst prospects of a strong recovery in the global economy and ultra-easy monetary policy

INR strengthened with USD / INR at 72.7550

JPY weakened with USD / JPY at 104.9400

CNY weakened with USD / CNY at 6.4582

EUR weakened with EUR / USD at 1.2120

GBP strengthened with EUR / GBP at 0.8750

GBP strengthened with GBP / USD at 1.3849

*3-Month LIBOR Rate*	*As on 12 Feb 2021*
US DOLLAR	0.20 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

Bitcoin

Bitcoin / U.S. Dollar dropped -1.24% in early Monday trade to $48,000 as of 07:00 a.m. I.S.T.

Bitcoin has been buoyed in recent months by endorsements from the likes of Paul Tudor Jones and Stan Druckenmiller, Morgan Stanley’s bet on Bitcoin in its $150 billion investment arm, BNY Mellon’s plans to service cryptocurrencies for its clients and Tesla’s investments of $1.5 billion into Bitcoin

Bitcoin reached a new record on Sunday, rising above $49,700 for the first time

“With each major announcement like the one BNY Mellon made, other institutions are spurred to more rapid adoption and deployment of digital assets,” said Patrick Campos, chief strategy officer at Securrency

Bond Markets

Americas : 10 – Year Govt Bond Yields

United States : 1.21%
Canada : 1.03%

Europe, Middle East & Africa : 10 – Year Govt Bond Yields

Germany : -0.43%
United Kingdom : 0.51%
France : -0.20%
Italy : 0.48%
Netherlands : -0.30%

Asia Pacific : 10 – Year Govt Bond Yields

India : 6.05%
Japan : 0.06%
Australia : 1.22%
Hong Kong : 0.70%
Singapore : 1.00%
South Korea : 1.83%

Fund Flows on NSE, BSE and MSEI — 12 Feb 2021

FII/FPI Net Sell Rs (37.33) Crore in Capital Market

DII Net Sell Rs (597.62) Crore in Capital Market

Where We’ve Been Reading —