Index Trend & Conditions – 07:30 a.m. I.S.T.
• Resistance for Nifty 50 is at 14,760 15,115 and 15,160 zone. For Tuesday, Feb. 23, Support area is seen at 14,644 14,590 and 14,432
• Support levels for Bank Nifty is at 34,810; while Resistance zone is at 35725 36,200 and 37,350 for Feb. 23
• The MSCI Asia Pacific ex-Japan is trading higher 0.07%, and the MSCI Emerging Market index is down -0.06%
• Trends on SGX Nifty look poised for a gap-up opening for Nifty 50 in India. The Nifty futures are trading 84 points, or 0.58% higher at 14,758 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 mostly positive opening in Asia-Pacific benchmarks gauges in early Tuesday trade; a positive MSCI Asia-Pacific ex-Japan index; U.S. Dollar resumed its slide to 89.95, reaching multi-year lows with 10-Yr Treasury Yields consolidating at 1.36% amid a global bond selloff on rising inflation expectations and Gold futures climbing steadily to $1,812 amid a weaker dollar, indicate stable-to-positive outlook for Nifty 50 India
• London Metal Index (LMI) surged to above 3800 points for the first time since September 2011 as traders rush to buy metals on expectations of faster economic growth and inflation globally while elevated yields weighed on equities
India Markets
| NIFTY 50 | OPEN | HIGH | LOW | CLOSE |
|---|---|---|---|---|
| Monday | 14,999 | 15,010 | 14,635 | 14,675 |
India’s equity benchmarks succumbed to losses for the 5th straight day on Monday trade, as cues from global markets were not ideal as stocks in Asian and European markets took a hit amid concerns over rising bond yields in the US
The blue-chip NSE Nifty 50 index dropped 306 points or -2.04% to 14,675 and the benchmark S&P BSE Sensex dropped 1,145 points or -2.25% at 49,744
The Nifty Metal index emerged as the only sectoral index on the NSE to end higher, given the rise in global commodity prices
The high selling of 14,500 strike price put option of the Nifty 50 index by options writers suggested that the benchmark could take support at that level going ahead. However, in the futures segment, traders added short positions in the February contract of the Nifty50
Broader markets under-performed headline peers — Midcap 100 index dropped -1.28%; Smallcap 250 index dropped -0.98% and Nifty 500 dropped -1.82%
Nifty P/E for Feb 22 decreased from 40.88 to 40.05, and Nifty P/B dropped from 4.24 to 4.16, as recorded by NSE India
Bank Nifty opened lower and soon escalated downwards throughout the session to touch an intraday low of 35,137. The index dropped 584 points, or -1.63%, to settle at 35,257
India VIX or Fear gauge rose 14.47% from 22.25 to 25.47 levels
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 3.54% as per RBI data. It moved in a range of 2.40 — 3.75% for Feb 20
Yield curve on the benchmark 10-year government bond steepened to 6.21%, while the rupee continues to strengthen to 72.4790 per U.S. dollar
Pump prices are so high in India that some of the gasoline and diesel exported to neighboring countries such as Nepal, is being smuggled back through porous land borders as prices there are cheaper due to tax differentiation. India imports 85% of its crude oil requirements, making it the world’s third-biggest buyer
India’s Supreme Court stopped regulatory approval for the Future Group’s $3.4 billion asset sale to Reliance, delaying the deal in a boost for Amazon.com. The U.S. firm announced this month that it was setting up manufacturing operations in the South Asian country
According to Economic Times analysts report and NSDL data, FPI portfolio value has doubled to record $575 billion since March 2020 lows. Among the major sectors, the FPIs preferred automobiles, banking, and capital goods
Credit Suisse has recently upgraded India’s weight to overweight from earlier market weight following the earnings growth momentum, which is one of the best in the Asia-Pacific region
America Markets
Wall Street’s S&P 500 and Nasdaq closed lower on Monday trade, as climbing Treasury yields and prospects of rising inflation triggered valuation concerns, hitting shares of high-flying growth companies
The broad-based S&P 500 fell 30 points, or -0.8%, to 3,876
The Dow Jones Industrial Average, composed mostly of cyclical stocks, eked out a slight gain, rising 27 points, or less than 0.1%, to 31,521
The tech-heavy Nasdaq Composite Index lost 341 points, or -2.5%, to close at 13,533
U.S. equity futures rose in early Tuesday trade. S&P500 futures is up 0.17%; Dow Jones futures is up 0.19% and Nasdaq futures is up 0.37%
10-yr U.S. Treasury yields, which move inversely to the price, consolidated at 1.36%, as global bond selloff continues on higher inflation expectations, with dollar extending Monday’s declines to 89.95
The Cboe Volatility Index, known as Wall Street’s “fear gauge,” rose 6.35% to 23.45 on Monday
Fed Chair Jerome Powell delivers the central bank’s semi-annual monetary policy report to the Senate Banking Committee on Tuesday
The U.S. House of Representatives Budget Committee on Monday approved legislation with $1.9 trillion in new coronavirus relief, advancing a top priority of President Joe Biden toward a full House vote on passage expected later this week
Wally Adeyemo, President Joe Biden’s nominee for the No. 2 job at the U.S. Treasury, vowed to crack down on authoritarian governments and fight unfair economic practices in China and elsewhere, while working to rectify economic inequality at home
“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 mostly inched higher in early Tuesday trade, as investors assessed expectations for faster growth and inflation that drove up commodities and bond yields
Australian shares fluctuated, while South Korea’s dropped
Japan’s Nikkei 225 and Topix 500 are closed for a holiday
South Korea’s Kospi dropped -0.45% to 3,066
In Hong Kong, Hang Seng added 0.17% to 30,371 and Hang Seng China Enterprises dropped -0.02% to 11,891
In China, CSI 300 dropped -0.98% to 5,542 and Shanghai Composite added 0.24% to 3,651
Australia’s S&P/ASX 200 added 0.06% to 6,784
“The key drivers of equities may be fading as markets come to terms with the next phase of the recovery,” said Chris Iggo, chief investment officer for core investments at AXA Investment Managers. “I wouldn’t be surprised if market returns are more volatile in the coming months. My approach to fixed income would be to look for opportunities to start to buy the long end again.”
EU Markets
European equities fell but trimmed early losses on Monday trade, as comments from the region’s central bank brought down treasury yields, though inflation expectations and profit-taking in technology stocks dragged the benchmark index lower
The pan-European Stoxx Europe 600 dropped -0.48% to 412 and Stoxx 50 dropped -0.23% to close at 3,705
Stoxx 600 index led by declines in technology companies and retail stocks
Germany’s DAX30 dropped -0.18% to 13,968
London’s blue-chip FTSE 100 dropped -0.18% to 6,612
France’s CAC40 dropped -0.11% to 5,767
Denmark’s OMX Copenhagen 20 dropped -1.91% to 1,455
Spain’s IBEX 35 dropped -0.56% to 8,106
Italy’s FTSE MIB dropped -0.60% to 22,996
Netherlands-based insurer, Aegon NV, which offers a range of insurance and savings products to high-net-worth clients in Hong Kong, Singapore, is exploring a sale of its Transamerica business in Asia as it pushes ahead with plans to exit non-core markets. Aegon joins other European insurers, including AXA and Aviva, in seeking to exit peripheral businesses and focus on core geographies such as in Netherlands, U.K. and U.S. and growth markets in Brazil, China, Portugal and Spain
European Central Bank’s Lagarde speaks on Monday at virtual European Parliament conference on stability, economic coordination and governance in the EU
The European Central Bank is “closely monitoring” the recent rise in government bond yields, ECB President Christine Lagarde said on Monday, as policymakers are becoming uncomfortable with the recent surge in borrowing costs
“Risk-free overnight indexed swap rates and sovereign yields are particularly important, because they are good early indicators of what happens at downstream stages of monetary policy transmission. Accordingly, the ECB is closely monitoring the evolution of longer-term nominal bond yields,” ECB President Lagarde said in a speech
“European equities are currently trading at quite higher valuations and with the current upward trajectory in bond yields, it might lead to further added pressure on equities,” said Roland Kaloyan, a strategist at SocGen
Oil & Natural Gas Markets
Crude-oil prices climbed in early Tuesday trade, as Goldman Sachs Group Inc. predicted prices could advance into the $70s in coming months
EIA crude oil inventory report is out Wednesday
WTI Crude is trading higher at $62.53 per barrel
Brent Crude, the international benchmark for oil, is trading higher at $66.20 per barrel
Natural Gas futures rose to $2.921/MMBtu
Commodities Markets
Gold futures climbed in early Tuesday trade
Inflationary risks posed by record-high debt levels should drive bullion prices higher in the long-run
U.S. Gold futures (Comex) is trading higher at $1,812 an ounce
Silver futures (Comex) rose to $28.25 an ounce
Gold / Silver Ratio has climbed down to $64.08
Copper futures (Comex) jumped to its highest in more than nine years to $4.1420 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 rose to $165.95 per tonne
In India, Spot Gold is trading at INR 46,816 per 10 grams
Currency Markets
U.S. dollar index, DXY resumed its slide in early Tuesday trade, to 89.95 reaching multi-year lows against the British pound and the Australian dollar as traders focused on the promise of coronavirus vaccinations and the outlooks for economic growth and inflation that could push bond yields higher
INR weakened with USD / INR at 72.4790
JPY strengthened with USD / JPY at 105.1000
CNY weakened with USD / CNY at 6.4648
EUR strengthened with EUR / USD at 1.2145
GBP strengthened with EUR / GBP at 0.8645
GBP strengthened with GBP / USD at 1.4048
| 3-Month LIBOR Rate | As on 22 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 -2.78% in early Tuesday trade to $52,713 as of 07:30 a.m. I.S.T.
Bitcoin slumped more than 10% at one point as prices pulled back from an all-time high
JPMorgan Chase & Co. strategists have warned about Bitcoin’s declining liquidity. Strategist Nikolaos Panigirtzoglou wrote in a note on Friday that liquidity for the digital coin was lower than that for the S&P 500 Index and gold, meaning that even small flows can have a large price impact
Bond Markets
Americas : 10 – Year Govt Bond Yields
United States : 1.36%
Canada : 1.21%
Europe, Middle East & Africa : 10 – Year Govt Bond Yields
Germany : -0.34%
United Kingdom : 0.68%
France : -0.10%
Italy : 0.59%
Netherlands : -0.21%
Asia Pacific : 10 – Year Govt Bond Yields
India : 6.21%
Japan : 0.10%
Australia : 1.43%
Hong Kong : 0.86%
Singapore : 1.22%
South Korea : 1.87%
Fund Flows on NSE, BSE and MSEI — 22 Feb 2021
FII/FPI Net Sell Rs (893.25) Crore in Capital Market
DII Net Sell Rs (919.88) 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
