Index Trend & Conditions – 07:30 a.m. I.S.T.
• Resistance for Nifty 50 is at 15,115 15,160 15,250 15,322 and 15,425 zone. For Monday, Feb. 22, Support area is seen at 14,760 and 14,644
• Support levels for Bank Nifty is at 35,584 and 34,810 ; while Resistance zone is at 36,200 and 37,350 for Feb. 22
• The MSCI Asia Pacific ex-Japan is trading higher 0.28%, and the MSCI Emerging Market index is up 0.10%
• Trends on SGX Nifty look poised for a positive opening for Nifty 50 in India. The Nifty futures are trading 21 points, or 0.14% higher at 15,016 on the Singaporean Exchange at 07:30 a.m. I.S.T.
• U.S. equity futures rose in early morning trade with S&P 500, Dow Jones and Nasdaq futures trading in green; alongside a positive opening in Asia-Pacific benchmarks gauges in early Monday trade amid positive news on vaccine efficacy; a positive MSCI Asia-Pacific ex-Japan index; U.S. Dollar extending Friday’s declines to 90.24 with 10-Yr Treasury Yields climbing to new high of 1.37% amid a global bond selloff on rising inflation expectations and Gold futures remaining under pressure at $1,786, after falling to the lowest in almost eight months, indicate stable-to-positive outlook for Nifty 50 India
• Federal Reserve Chair Jerome Powell delivers his semi-annual testimony before Congress this week, and European Central Bank’s President Christine Lagarde is also expected to sound dovish in a speech later Monday
India Markets
| NIFTY 50 | OPEN | HIGH | LOW | CLOSE |
|---|---|---|---|---|
| Friday | 15,074 | 15,144 | 14,898 | 14,981 |
India’s equity benchmarks ended lower for the fourth successive session on Friday trade, as cues from global markets were less supportive
The blue-chip NSE Nifty 50 index dropped 137 points or -0.90% to 14,981 and the benchmark S&P BSE Sensex dropped 435 points or -0.90% at 50,889
Nifty has a critical support at 14,750 and a decisive break-down may result in further fall; else, consolidation is to continue. As we witness the corrective phase, more focus on position management is suggested by domestic analysts
Broader markets under-performed headline peers — Midcap 100 index dropped -1.62%; Smallcap 250 index dropped -0.83% and Nifty 500 dropped -1.01%
Nifty P/E for Feb 19 decreased from 41.26 to 40.88, and Nifty P/B dropped from 4.28 to 4.24, as recorded by NSE India
Bank Nifty opened with a gap down and escalated downwards throughout the session to touch an intraday low of 35,584. The index has dropped 745 points, or -2.04%, to settle at 35,841
India VIX or Fear gauge rose 3.30% from 21.54 to 22.25 level
VIX needs to cool down and hold below 20 level to attract support-based buying and again make an attempt to go towards its lifetime high with a higher market base
Overnight Call Money rate weighted average stood at 3.22% as per RBI data. It moved in a range of 1.90 — 3.50% for Feb 17
Yield on the benchmark 10-year government bond stayed unchanged at 6.18%, while the rupee strengthened to 72.5600 per U.S. dollar
America Markets
Wall Street’s main indexes finished mostly lower on Friday trade, as benchmark Treasury yields climbed to the highest levels in a year, renewing concern that rising borrowing costs and price pressures could derail the economic recovery
The broad-based S&P 500 lost 7 points, or -0.19%, to close at 3,906
The Dow Jones Industrial Average, composed mostly of cyclical stocks, rose 0.98 point, or less than 0.1%, to finish at 31,494
The tech-heavy Nasdaq Composite Index added 9 points, or 0.07%, to end at 13,874
U.S. equity futures rose in early Monday trade. S&P500 futures is up 0.18%; Dow Jones futures is up 0.16% and Nasdaq futures is up 0.24%
10-yr U.S. Treasury yields, which move inversely to the price, rose to new one-year highs of 1.37%, as global bond selloff continues on higher inflation expectations, with dollar extending Friday’s declines to 90.24
The Cboe Volatility Index, known as Wall Street’s “fear gauge,” fell -1.96% to 22.05 on Friday
Core bond yields have pushed higher globally, led by the so-called reflation trade, where investors wager on a pickup in growth and inflation. Growing momentum for coronavirus vaccine programs and hopes of massive government spending under U.S. President Joe Biden have spurred reflation trades
Indications of resilience in global industry, a surge in American retail spending, along with fiscal stimulus around the world, especially from the Biden administration, point to higher growth in the U.S., according to projections from JPMorgan economists led by Bruce Kasman
Sales of previously owned houses in the U.S. were up 0.6% from the previous month to 6.69 million units in Jan 2021, beating market forecasts of 6.61 million continued to be supported by historically low mortgage rates and demand for bigger space. Year-on-year, sales jumped 23.7%, 107 straight months of gains. The median existing-home price was $303,900, up 14.1% from Jan 2020
U.S. factory activity slowed in early February likely as a global semiconductor chip shortage hurt production at automobile plants, while prices of inputs and manufactured goods soared, which could heighten fears of strong inflation growth this year
IHS Markit’s flash U.S. manufacturing PMI dropped to 58.5 in the first half of this month from a final reading of 59.2 in Jan
The IHS Markit’s flash services sector PMI edged up to 58.9 from a final reading of 58.3 in Jan. The services sector, which accounts for more than two-thirds of U.S. economic activity, has borne the brunt of the pandemic
The report from data firm IHS Markit on Friday also showed businesses in the services industry were experiencing higher costs related to the procurement of PPEs, a greater proportion of which they were passing on to clients “through a marked rise in selling prices.”
Manufacturing and housing are leading the economy’s recovery from the pandemic recession
The latest fund manager survey by BofA Global Research showed a record in the net percentage of investors taking higher-than-normal risk, cash allocations at their lowest level since March 2013 and allocations to stocks and commodities at their highest point in around a decade.
“The two big things right now are waiting for stimulus and this idea of the reflation trade — investors have a keen eye out for signs of inflation,” said Shawn Snyder, head of investment strategy at Citi Personal Wealth Management. “You see Treasury yields moving higher, that’s causing a bit of consternation in the markets.”
Asia-Pacific Markets
Asian benchmark stocks inched higher in early Monday trade, as expectations for faster economic growth and inflation globally batter bonds and boost commodities, though rising real yields also make equity valuations look more stretched in comparison
Japan’s Nikkei 225 added 1.20% to 30,379 and Topix 500 added 1.20% to 1,522
South Korea’s Kospi added 0.55% to 3,124
In Hong Kong, Hang Seng added 0.83% to 30,881 and Hang Seng China Enterprises added 0.24% to 12,131
In China, CSI 300 added 0.18% to 5,778 and Shanghai Composite dropped -0.18% to 3,689
Australia’s S&P/ASX 200 added 0.18% to 6,805
The Chinese government is currently conducting a review of its rare-earths policy, and is looking at banning sales of the technology to some countries or companies. China controls most of the world’s mined output of rare earths, a broad group of 17 elements that are used in everything from smartphones to fighter jets
China’s banking regulator imposed new restrictions on banks and financial institutions working with online microlenders including Jack Ma’s Ant Group Co. Banks must cap overall joint lending with internet platforms or other partners at no more than 50% of their outstanding loans, the China Banking and Insurance Regulatory Commission said in a statement on Saturday. Co-lending with one platform should not exceed 25% of the bank’s tier-1 net capital
The People’s Bank of China (PBoC) left its benchmark interest rates or loan prime rates (LPR) for corporate and household loans steady for a 10th month in Feb. The 5-year loan prime rate was set at 4.65%, while the 1-year loan prime rate was at 3.85%
The LPR is a revamped market indicator of the price that lenders charge clients for new loans, released on or around the 20th day of every month
Taiwan’s economy is expected to grow 4.64% in 2021, the statistics agency said on Saturday, upgrading a previous forecast of 3.83% predicted in Nov. 2020 on the back of a strong rebound in exports. For the full year of 2020, it was revised up to 3.11% from an initial 2.98%. The statistics office also revised up the export growth forecast for 2021 to 9.58% from a previous 4.59%
EU Markets
European equities rose on Friday trade, marking a third week of gains, as data showed factory activity in Feb. jumped to a three-year high, while upbeat quarterly earnings boosted confidence in a broader economic recovery
The pan-European Stoxx Europe 600 added 0.75% to 414 and Stoxx 50 added 0.88% to close at 3,713
Germany’s DAX30 added 0.77% to 13,993
London’s blue-chip FTSE 100 added 0.10% to 6,624
France’s CAC40 added 0.79% to 5,773
Denmark’s OMX Copenhagen 20 dropped -0.36% to 1,484
Spain’s IBEX 35 added 1.16% to 8,151
Italy’s FTSE MIB added 0.94% to 23,136
Minutes of the European Central Bank’s Jan. meeting, released on Thursday, showed policymakers expressed fresh concerns over the Euro’s strength but appeared relaxed over the recent rise in govt bond yields
PMI data showed the Eurozone business activity fell for a 4th-successive month in February due to a slump in the services sector but the manufacturing growth picked up to a near a three-year high
On the corporate front, Renault posted its biggest full-year loss on record last year while profits from Allianz fell less than expected and Danone warned of a tough first quarter
The U.K.’s factory orders book balance at 1-year high
The IHS Markit/CIPS UK Services PMI jumped to 49.7 in Feb 2021, up from 39.5 in the previous month and well above market expectations of 41.0
Retail sales in the U.K. slumped 8.2% MoM in Jan 2021, the most since a record 18% fall in April, and much worse than market forecasts of a 2.5% decline. The biggest decrease was seen in sales of textiles, clothing and footwear at -34%
The IHS Markit Euro Area Manufacturing PMI jumped to 57.7 in Feb from 54.8 in Jan, beating forecasts of 54.3; while the IHS Markit Eurozone Services PMI dropped to 44.7 in Feb, down from 45.4 in the previous month and below market expectations of 45.9
Italy’s consumer prices or inflation rate went up 0.4% year-over-year in Jan 2021, following a -0.2% drop in the previous month and slightly above a preliminary estimate of a 0.2% rise. Main upward pressure came from prices of recreation & culture (1.4% vs 0.7%) and restaurants & hotels (1.2% vs 0.8%)
Oil & Natural Gas Markets
Crude-oil prices rose in early Monday trade, aided by tightening supplies and freezing weather
Oil is still up more than 20% this year due to Saudi Arabia’s unilateral output cuts in February and March and an improving demand outlook
Spread for Brent has moved further into backwardation, reflecting the supply tightness
WTI Crude is trading higher at $59.66 per barrel
Brent Crude, the international benchmark for oil, is trading higher at $63.38 per barrel
Natural Gas futures increased to $3.074/MMBtu
“The cold snap and power cuts affected more than 20 refineries in Texas, Louisiana and Oklahoma. Crude-processing capacity fell by about 5.5 million barrels a day,” said Amrita Sen, chief oil analyst for Energy Aspects Ltd.
Commodities Markets
Gold futures remained under pressure in early Monday trade, pressured by a combination of a stronger dollar and rising U.S. Treasury yields
However, the inflationary risks posed by record-high debt levels should drive prices higher in the long-run
U.S. Gold futures (Comex) is trading lower at $1,786 an ounce
Silver futures (Comex) rose to $27.51 an ounce
Gold / Silver Ratio has climbed down to $64.80
Copper futures (Comex) jumped to its highest in more than nine years to $4.1530 per pound, as tight supplies and bullish sentiment toward base metals continues in a sign of optimism on the global recovery
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 steadied at $165.20 per tonne
In India, Spot Gold is trading at INR 46,247 per 10 grams
Currency Markets
U.S. dollar index, DXY lost ground in early Monday trade, to 90.24 extending Friday’s decline as improved risk appetite sapped demand for the safe-haven currency and drew buyers to riskier, higher-yielding currencies
INR weakened with USD / INR at 72.5600
JPY strengthened with USD / JPY at 105.4500
CNY strengthened with USD / CNY at 6.4577
EUR strengthened with EUR / USD at 1.2119
GBP strengthened with EUR / GBP at 0.8650
GBP strengthened with GBP / USD at 1.4016
| 3-Month LIBOR Rate | As on 19 Feb 2021 |
| US DOLLAR | 0.18 per cent |
| Euro | – 0.55 per cent |
| British Pound | 0.06 per cent |
| Swiss Franc | – 0.76 per cent |
| Japanese Yen | – 0.08 per cent |
Bitcoin
Bitcoin / U.S. Dollar dropped -0.98% in early Monday trade to $56,960 as of 07:30 a.m. I.S.T.
Bitcoin’s market value reached $1 trillion for the first time. The largest digital-asset has added more than $450 billion of value in 2021
The “long Bitcoin” trade is seen as among the most crowded in the world alongside technology exposure and dollar shorts, according to the February edition of Bank of America’s global fund manager survey
Bond Markets
Americas : 10 – Year Govt Bond Yields
United States : 1.37%
Canada : 1.20%
Europe, Middle East & Africa : 10 – Year Govt Bond Yields
Germany : -0.31%
United Kingdom : 0.70%
France : -0.06%
Italy : 0.62%
Netherlands : -0.17%
Asia Pacific : 10 – Year Govt Bond Yields
India : 6.18%
Japan : 0.10%
Australia : 1.43%
Hong Kong : 0.86%
Singapore : 1.22%
South Korea : 1.87%
Fund Flows on NSE, BSE and MSEI — 19 Feb 2021
FII/FPI Net Buy Rs 118.75 Crore in Capital Market
DII Net Sell Rs (1,174.98) 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
