Finance - Stock Market Forecast

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

• Resistance for Nifty 50 is near 15,425. For Wednesday, Feb. 17, Support area is seen at 15,250 and 15,045

• Support levels for Bank Nifty is at 36,400 and 36,208; while Resistance zone is at 37,350 and 37,708 for Feb. 17

• The MSCI Asia Pacific ex-Japan is trading lower -0.08%, and the MSCI Emerging Market index is up 0.06%

• Trends on SGX Nifty look poised for a gap-down opening for Nifty 50 in India. The Nifty futures are trading 88 points, or -0.57% higher at 15,240 on the Singaporean Exchange at 07:30 a.m. I.S.T.

• U.S. equity futures slipped in early morning trade with S&P 500 and Dow Jones and Nasdaq futures trading in red; alongside a lower start in Asia-Pacific benchmarks gauges in early Wednesday trade; a negative MSCI Asia-Pacific ex-Japan index; U.S. Dollar strengthening to above 90.70 with 10-Yr Treasury Yields easing from 1.32% to 1.29% on inflation bets and Gold futures trading lower at $1,791 on the day indicate negative-to-stable outlook for Nifty 50 India

• The market is fairly frothy here from a sentiment perspective

India Markets

NIFTY 50	OPEN	HIGH	LOW	CLOSE
Tuesday	15,371	15,431	15,242	15,313

India’s equity benchmarks could not capitalise on a strong start on Tuesday trade, as it witnessed selling pressure

Nifty 50 and Bank Nifty had given a Flag breakout on the daily chart on Monday close. Flag patterns signify trend reversals or breakouts after a period of consolidation

The blue-chip NSE Nifty 50 index dropped less than 2 points or -0.01% to 15,313 and the benchmark S&P BSE Sensex dropped 50 points or -0.10% at 52,104

Most broader markets under-performed headline peers — Midcap 100 index added 0.44%; Smallcap 250 index added 0.23% and Nifty 500 added 0.12%

Nifty P/E for Feb 16 2021 increased from 41.59 to 41.78, and Nifty P/B unchanged at 4.34, as recorded by NSE India

Bank Nifty opened with a gap up, but descended throughout the day. Banking stocks witnessed some lag and as a result the rate-sensitive index fell towards 36,750 level. The index has dropped 207 points, or -0.56%, to settle at 37,098

India VIX or Fear gauge moved up 1.40% from 21.47 to 21.71. 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 15

Yield on the benchmark 10-year government bond increased to 6.15%, while the rupee weakened to 72.8120 per U.S. dollar

America Markets

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

Wall Street’s main indexes registered all-time highs before easing on Tuesday trade, underpinned by the potential for more fiscal stimulus and hopes for a successful vaccine rollout

The broad-based S&P 500 edged down 2.24 points, or -0.1%, to 3,932

The Dow Jones Industrial Average, composed mostly of cyclical stocks, rose 64 points, or 0.2%, to 31,522; an eighth record close of 2021

The tech-heavy Nasdaq Composite Index fell 48 points, or -0.3%, to 14,047; , weighed down by losses in shares of heavily-weighted Apple and Microsoft

U.S. equity futures slipped in early Wednesday trade. S&P500 futures is down -0.25%; Dow Jones futures is down -0.14% and Nasdaq futures is down -0.37%

10-yr U.S. Treasury yields, which move inversely to the price, pushed above 1.30%, the highest in a year with dollar strengthening to 90.72

The Cboe Volatility Index, known as Wall Street’s “fear gauge,” rose 7.46% to 21.46 on Tuesday

Foreign property investors are increasingly shaking up the U.S. real-estate market by directing their attention to suburban warehouses. Aside from warehouses, foreign demand has mirrored American investor interest in U.S. data centers, healthcare and research facilities and student housing, according to a recent report from real-estate services firm Newmark

Elon Musk’s SpaceX raised $850 million, at $419.99 a share, sending the company’s valuation to about $74 billion

Warren Buffett’s Berkshire Hathaway cut its Apple Inc. holding during the last few months of 2020, as per an updated document released Tuesday. The conglomerate bought stock in Verizon Communications, insurance broker Marsh & McLennan and Chevron, bets that were granted confidential status and not revealed in Q3 regulatory filing. Berkshire cut a few bank holdings, exiting JPMorgan Chase, PNC Financial Services Group and M&T Bank while slashing its Wells Fargo stake by 59%

Friday will also see major economies, including the U.S., release preliminary February purchasing managers’ indexes (PMI)

“The market is fairly frothy here from a sentiment perspective,” Liz Ann Sonders, chief investment strategist at Charles Schwab & Co., said. “You have to put a move higher in yields that goes out of the comfort zone as a potential risk associated with that.”

“Continued monetary stimulus and bursts of fiscal support maintain a strong foundation for risk assets,” said Seema Shah, chief strategist at Principal Global Investors

Asia-Pacific Markets

Asian benchmark stocks opened lower in early Wednesday trade

Shares were down in Japan, South Korea, Hong Kong and Australia

Japan’s Nikkei 225 dropped -0.79% to 30,227 and Topix 500 dropped -0.45% to 1,526

South Korea’s Kospi dropped -1.25% to 3,123

In Hong Kong, Hang Seng dropped -0.47% to 30,594 and Hang Seng China Enterprises dropped -0.34% to 11,995

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

Australia’s S&P/ASX 200 dropped -0.70% to 6,868

Reserve Bank of Australia releases minutes from February policy meeting – Philip Lowe and his board ruled out any premature tapering speculation and said that the monetary support will be needed for some time to meet its inflation and unemployment goals

The RBA had announced two weeks ago that it was extending its QE program by a further A$100 billion ($77.9 billion) and doesn’t expect to raise interest rates until 2024

Singapore’s budget on Tuesday is expected to offer more targeted measures to support the economy’s recovery from its worst year since independence, setting up a third straight budget deficit for the traditionally fiscally conservative state

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

“The bond purchase program had helped to lower interest rates and had contributed to a lower exchange rate than otherwise,” the Reserve Bank of Australia said in the minutes released in Sydney on Tuesday. “Given this, it would be premature to consider withdrawing monetary stimulus.”

EU Markets

European equities were little-changed on Tuesday trade amid economic data showing that the Eurozone economy contracted slightly less than previously estimated in the fourth quarter of 2020

The pan-European Stoxx Europe 600 dropped -0.19% to 417 and Stoxx 50 dropped -0.21% to close at 3,726

Germany’s DAX30 dropped -0.32% to 14,064

London’s blue-chip FTSE 100 dropped -0.11% to 6,748

France’s CAC40 added 0.01% to 5,786

Denmark’s OMX Copenhagen 20 dropped -0.15% to 1,511

Spain’s IBEX 35 dropped -0.61% to 8,153

Italy’s FTSE MIB dropped -0.69% to 23,441

Brexit is hindering London’s efforts to stay as the world’s top financial center. The U.K. capital is viewed as the world’s leading hub by 31% of financiers, down from 34% last year, according to a survey of 250 financial services executives by advisory firm Duff & Phelps

The U.K. could need tax increases of about 60 billion pounds ($84 billion) if Chancellor of the Exchequer Rishi Sunak wants to balance the books

The ZEW Indicator of Economic Sentiment for Germany edged up by 9.4 points from the previous month to 71.2 in Feb of 2021, well above market forecasts of 59.6

The Eurozone economy shrank -0.6% on Dec quarter of 2020, less than an initially estimated -0.7% slump, amid pandemic lockdowns

Year-on-year, the GDP shrank -5.0%, also revised lower from a preliminary -5.1% decline

Oil & Natural Gas Markets

Crude-oil prices eased but continued to push higher in early Wednesday trade

Prices are also driven by an Arctic blast in the U.S., which has threatened to disrupt crude output by well shutdowns, traffic jams and power outages

WTI Crude is trading higher at $59.69 per barrel

Brent Crude, the international benchmark for oil, is trading higher at $62.91 per barrel

Natural Gas futures increased to $3.104/MMBtu, a 3-month high, as a frigid airmass plunged much of the central U.S. into deep freeze, boosting heating demand in the residential and commercial sectors

Commodities Markets

Gold futures weakened below its 200-day EMA while Silver continues to push higher in early Wednesday trade, as risk assets are in favor on the back of intensified stimulus hopes

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 $1,791 an ounce

Silver futures (Comex) is pushing lower at $27.19 an ounce

Gold / Silver Ratio has climbed down to $65.76

Copper futures (Comex) jumped to their highest since 2012 to $3.8275 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 rose to $162.80 per tonne

In India, Spot Gold is trading at INR 46,690 per 10 grams

Currency Markets

U.S. dollar index, DXY strengthened to 90.71 in early Wednesday trade, hitting a four-month high against the yen as U.S. bond yields jumped on the prospects of further economic recovery and a possible acceleration in inflation

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 weakened with USD / INR at 72.8120

JPY weakened with USD / JPY at 105.8200

CNY weakened with USD / CNY at 6.4582

EUR weakened with EUR / USD at 1.2110

GBP strengthened with EUR / GBP at 0.8706

GBP strengthened with GBP / USD at 1.3910

“I think the dollar’s downtrend is over. At the start of the year, speculators were betting on a fall in the dollar below 100 yen. They seem to have abandoned such a view now,” said Yukio Ishizuki, senior strategist at Daiwa Securities

*3-Month LIBOR Rate*	*As on 16 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

Bitcoin

Bitcoin / U.S. Dollar added 0.02% in early Wednesday trade to $49,184 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 crossed a new milestone, surpassing $50,000 for the first time on Tuesday

“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 : 1.29%
Canada : 1.11%

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

Germany : -0.35%
United Kingdom : 0.62%
France : -0.12%
Italy : 0.56%
Netherlands : -0.23%

Asia Pacific : 10 – Year Govt Bond Yields

India : 6.15%
Japan : 0.07%
Australia : 1.32%
Hong Kong : 0.79%
Singapore : 1.05%
South Korea : 1.84%

Fund Flows on NSE, BSE and MSEI — 16 Feb 2021

FII/FPI Net Buy Rs 1,144.09 Crore in Capital Market

DII Net Sell Rs (1,559.53) Crore in Capital Market

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