Index Trend & Conditions – 07:00 a.m. I.S.T.
• Resistance zone for Nifty 50 is at 14,845 and 14,950 for this week. For Tuesday, Mar. 23, Support area is seen around 14,650 14,513 and 14,450
• Support levels for Bank Nifty is around 33,350 and 32,650; while Resistance zone is at 34,150 34,707 and 35,100 for Mar. 23
• The MSCI Asia Pacific ex-Japan is trading higher 0.24%, and the MSCI Emerging Market index is up 0.20%
• Trends on SGX Nifty look poised to a positive start for Nifty 50 in India. The Nifty futures are trading 71 points, or 0.50% higher at 14,785 on the Singaporean Exchange at 07:00 a.m. I.S.T.
• U.S. equity futures opened mostly higher in early morning trade with S&P 500 and Dow Jones trading in green, while Nasdaq futures fluctuated in red territory; alongside a higher start in Asia-Pacific benchmarks gauges in early Tuesday trade with equities climbing in Japan, South Korea, Hong Kong and Australia; a positive MSCI Asia-Pacific ex-Japan index; U.S. Dollar steady at 91.81 with 10-Yr Treasury Yields stabilizing to 1.69% and Gold futures slipping to $1,733 an ounce indicate a positive and steady outlook amid channel-wise resistance
• Current Bearish movers in India’s markets are — double top creation at 15,400 level for Nifty; Negative divergence on MACD indicator; Nifty breaking Day EMA of 3, 8, 21 and currently taking support from 50-day; Nifty P/E above 40 indicating high valuations; contraction in India’s Industrial Production in Jan-Feb; Rising crude oil prices; Souring sentiments from staggered lockdowns in Maharashtra and Reverse repo rate below 5 lakh crores indicating lower surplus liquidity
India Markets
| NIFTY 50 | OPEN | HIGH | LOW | CLOSE |
|---|---|---|---|---|
| Monday | 14,471 | 14,788 | 14,350 | 14,736 |
India’s equity benchmarks closed on an absolutely flat note after a range-bound session on Monday trade, forming an indecisive Doji candle on the daily chart as investor sentiments were weighed down by concerns over rising Covid-19 cases and global bond yields
The blue-chip NSE Nifty 50 index dropped 7 points or -0.05% to 14,736 and the benchmark S&P BSE Sensex dropped 87 points or -0.17% to close at 49,771
Broader markets out-performed headline peers — Midcap 100 index added 0.82%; Smallcap 250 index added 0.25% and Nifty 500 added 0.20%
Nifty P/E for Mar 22 slid marginally to 40.14 from 40.16 with Nifty P/B unchanged at 4.18, as recorded by NSE India
Bank Nifty opened negative and weakness pulled it to 33389 level in the initial half of the day. However, some recovery emerged thereafter. The index dropped 558 points, or -1.63%, to settle at 33,603
India VIX or the barometer of nervousness in the market, rose 2.51% from 19.99 to 20.49 levels
VIX needs to cool down below 20 level for the bullish grip to continue and smoothen the move in the market. A lower VIX with a rising Put-Call Ratio indicate that the bulls may get some stability after losing ground over the past few sessions
Overnight Call Money rate weighted average stood at 2.97% as per RBI data. It moved in a range of 2.60 — 3.20% for Mar 20
Under Liquidity Operations by RBI, Reverse Repo for the week (Mar 8 to Mar 14) stood below 5 lakh crores, marking lower surplus liquidity in the market compared to 7 lakh crores, 3-months earlier
Yield curve on the benchmark 10-Yr government bond declined by 2 bps to 6.18%, after govt decided to cancel a scheduled weekly auction of 200 billion rupees ($2.7 billion) of bonds, while the rupee appreciated 15 paise to 72.3700 per U.S. dollar, driven by foreign fund inflows and easing crude oil prices
Foreign portfolio investors (FPIs) have bought close to a net $2.5 billion worth of Indian equities so far in March
Among individual stocks, Reliance shares fell as dealers suggested investors were disappointed by the lack of update by Saudi Aramco in their recent investor call on the potential stake acquisition in RIL’s energy business
Dabur managed to shrug off the concerns surrounding its business exposure to Turkey where the sudden sacking of the country’s central bank has sparked a financial rout. Dabur is said to have around 3-4% exposure of its consolidated business in Turkey
Adani Group companies shares rose 5-11% amid rising optimism on the group companies’ financial health as well as their earnings growth
The Hinduja family is partnering with New York-based Focus Financial Partners Inc. to launch a multifamily office that will serve other members of the world’s ultra-rich, Beryllus Capital, which will provide investment management, banking and real estate advisory. It will have offices in London, Geneva and Singapore and be led by co-founder Amit Kotha, a former managing director in London at Royal Bank of Canada
America Markets
U.S. stocks climbed on Monday trade, as gains in technology stocks powered the Nasdaq Composite higher
The broad-based S&P 500 gained 27 points, or 0.7%, to 3,940
The Dow Jones Industrial Average, composed mostly of cyclical stocks, added 103 points, or 0.3% to close at 32,731
The tech-heavy Nasdaq Composite Index rose 162 points, or 1.2%, to 13,377; recovering some ground after it declined last week
U.S. equity futures opened higher in early Tuesday trade. S&P500 futures is up 0.10%; Dow Jones futures is up 0.13% and Nasdaq futures is down -0.20%
10-yr U.S. Treasury yields, which move inversely to the price, stabilized at 1.69%, providing some relief for investors amid fears that a stronger recovery could fuel inflation and a pullback in central bank support in early Tuesday, with dollar steady at 91.81
Many investors expect bond yields to keep rising as the economy picks up speed, posing a challenge to tech stocks that led the broader market higher in 2020
The Cboe Volatility Index, known as Wall Street’s “fear gauge,” fell -9.88% to 18.88 on Monday
Sales of previously owned houses in the US plunged 6.6% from the previous month to 6.22 million units in Feb 2021, the least in 6 months and much worse than market forecasts of a 3 percent drop as supply dropped the most on record. Still, the Feb sales marked a 9.1% increase from a year earlier, according to the National Association of Realtors
The Chicago Fed National Activity Index sank to -1.09 in Feb 2021 from an upwardly revised 0.75 in Jan. It is the lowest reading since April as indicators related to production declined sharply (-0.85 vs 0.37) as adverse weather weighed on activity
Last week’s Treasury sell-off served as a stark reminder that investors remain concerned that a stronger economic recovery could fuel inflation, despite reassuring comments from policy makers
Fed Chair Powell and Treasury Secretary Janet Yellen are expected to make their first joint appearance before the U.S. House Financial Services committee to testify on Fed and Treasury pandemic policies on Tuesday
February U.S. personal income and spending data comes in the wake of $600 stimulus checks but before the latest round of $1,400 payments began hitting Americans’ bank accounts on Friday
“The rise in long-term yields has kind of affected every move we’ve seen in equity markets, from the big selloff in the higher growth stuff to the rotation into the more economically sensitive sectors,” said Ross Mayfield, investment strategy analyst at Baird. “Any time there is some rate stabilization, it’s kind of the spark for tech to capture a little bit of gains.”
Asia-Pacific Markets
Asian benchmark stocks opened higher in early Tuesday trade, following U.S. peers as bond yields maintained Monday’s decline ahead of a series of closely watched Treasury auctions
Opening gains for equity indexes in Japan and Australia buoyed the MSCI Asia Pacific gauge
Japan’s Nikkei 225 rose 0.80% to 29,387 and Topix 500 added 0.48% to 1,552
South Korea’s Kospi added 0.06% to 3,037
In Hong Kong, Hang Seng added 0.16% to 28,920 and Hang Seng China Enterprises added 0.11% to 11,317
In China, CSI 300 dropped -0.10% to 5,047 and Shanghai Composite dropped -0.19% to 3,436
Australia’s S&P/ASX 200 added 0.45% to 6,782
China signed a $1.5 Billion currency swap agreement with Sri Lanka as the South Asian nation looks to reduce reliance on the International Monetary Fund before $3.7 billion of foreign debt matures this year. Faced with low foreign-exchange reserves and looming debt repayments, Sri Lanka is getting closer to China, it’s biggest import partner. More than 22% of the island nation’s foreign purchases were from China last year
Export orders from Taiwan climbed 48.5% over a year earlier to $42.6 billion in Feb 2021, the highest value on record for a Feb month and surpassing market expectations of a 45.1% jump. It is the 12th consecutive rise in export orders amid sustained demand for information & communication products (88.4%) and electronic products (52.4%), but also due to a lower base last year due to the pandemic
EU Markets
European equities were weighed down on Monday trade by a slump in Turkey’s currency and worries about more restrictions due to rising coronavirus cases in the continent, but strength in automakers helped limit the losses
The pan-European Stoxx Europe 600 added 0.05% to 418 and Stoxx 50 dropped -0.10% to close at 3,833
Germany’s DAX30 added 0.24% to 14,658
London’s blue-chip FTSE 100 added 0.28% to 6,727
France’s CAC40 dropped -0.50% to 5,967
Denmark’s OMX Copenhagen 20 added 0.61% to 1,449
Spain’s IBEX 35 dropped -1.87% to 8,334
Italy’s FTSE MIB dropped -0.66% to 24,199
Sweden’s OMX Stockholm 30 added 0.32% to 2,176
France still sees GDP growth of 6% this year, even after new lockdown measures came into force in Paris and other regions on Saturday to contain the coronavirus. Le Maire’s office estimates that the new curbs will knock 0.2 percentage points off off annual economic output
The Euro Area’s current account posted a EUR 5.8 billion surplus in Jan 2021, compared with a EUR 8.2 billion deficit in the same month last year but missing market expectations of a EUR 34.3 billion surplus
Italy posted a current account surplus pf EUR 710 million in Jan 2021, compared to a EUR 988 million deficit in the corresponding month of the previous year. The goods surplus widened sharply to EUR 1,813 million from EUR 874 million and the services gap narrowed to EUR 499 million from EUR 1,257 million
“We have had such a strong period of news-flow and catalysts on the positive end that now that a lot of those have largely been put into the market, we are now a little bit more susceptible to negative news causing big drawdowns,” said Mark Hackett, chief of investment research at Nationwide
“The new lockdown will have a significant impact on economic activity and further deteriorate France’s economic outlook for the first part of 2021,” said Charlotte de Montpellier, economist, France and Switzerland, at ING. “The current slow pace of the vaccination campaign leaves little hope for a full lifting of the restrictions after the end of the 4-week lockdown.”
Oil & Natural Gas Markets
Crude-oil prices was little changed in early Tuesday trade, as investors assessed an uneven demand recovery around the world after slumping the most since October over the last week
Oil prices fell -7% last week, when a new wave of coronavirus infections across Europe dampened expectations of any imminent recovery in fuel demand
WTI Crude is trading at $61.05 per barrel
Brent Crude, the international benchmark for oil, is trading at $64.08 per barrel
Natural Gas futures is trading lower at $2.549/MMBtu
The dollar’s rise has also contributed to the oil sell-off. A stronger dollar makes oil more expensive for holders of other currencies
“The pull lower is the situation in Europe with renewed lockdowns,” and “to the extent there’s any wavering in the reopening in the U.S., that could be big trouble for crude,” said John Kilduff, a partner at Again Capital LLC. Still, “the bull case remains that there’s a lot of pent up demand.”
Commodities Markets
Gold futures slipped in early Tuesday trade, pressured by a surge in US Treasury yields and a rebound in the dollar in earlier sessions
Some investors view gold as a hedge against higher inflation that could follow stimulus measures, but higher Treasury yields have dulled some of the appeal of the non-yielding commodity
U.S. Gold futures (Comex) is trading at $1,733 an ounce
Silver futures (Comex) is trading at $25.63 an ounce
Gold / Silver Ratio rose to $67.60
Copper futures (Comex) rose to $4.1470 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 fell to $164.65 per tonne
In India, Spot Gold is trading at INR 45,144 per 10 grams
“On the technical front, in the near term gold faces resistance around the $1,765/oz level,” said Standard Chartered analyst Suki Cooper.
“Gold remains pressurized by higher US bond yields, rebound in US dollar and continuing ETF outflows. However, supporting price is Fed’s dovish monetary policy stance, mixed economic data from major economies, renewed virus concerns and increased tensions between US-China and US-Russia,” said Ravindra Rao – Head, Commodity Research – Kotak Securities
Currency Markets
U.S. dollar index, DXY stable at 91.81 in early Tuesday trade
INR strengthened with USD / INR at 72.3700
JPY strengthened with USD / JPY at 108.7200
CNY strengthened with USD / CNY at 6.5077
EUR strengthened with EUR / USD at 1.1931
GBP weakened with EUR / GBP at 0.8612
GBP weakened with GBP / USD at 1.3856
| 3-Month LIBOR Rate | As on 22 Mar 2021 |
| US DOLLAR | 0.19 per cent |
| Euro | – 0.55 per cent |
| British Pound | 0.08 per cent |
| Swiss Franc | – 0.75 per cent |
| Japanese Yen | – 0.08 per cent |
Bitcoin
Bitcoin / U.S. Dollar rose 1.21% in early Tuesday trade to $54,743 as of 07:00 a.m. I.S.T.
Bitcoin is seen by some as an appealing digital alternative to gold, or a potential refuge from inflation due to its limited supply
“Bitcoin is extremely sensitive to increased dollar demand,” BofA strategists said in a note on Wednesday. “We estimate a net inflow into Bitcoin of just $93 million would result in price appreciation of 1%, while the similar figure for gold would be closer to $2 billion or 20 times higher. In contrast, the same analysis for the 20-year-plus Treasuries shows that multibillion money flows do not have a significant impact on price, pointing to the much larger and stable nature of the U.S. Treasuries markets.”
Bond Markets
Americas : 10 – Year Govt Bond Yields
United States : 1.69%
Canada : 1.54%
Europe, Middle East & Africa : 10 – Year Govt Bond Yields
Germany : -0.31%
United Kingdom : 0.82%
France : -0.06%
Italy : 0.65%
Netherlands : -0.18%
Asia Pacific : 10 – Year Govt Bond Yields
India : 6.18%
Japan : 0.07%
Australia : 1.75%
Hong Kong : 1.12%
Singapore : 1.59%
South Korea : 2.07%
Fund Flows on NSE, BSE and MSEI — 22 Mar 2021
FII/FPI Net Sell Rs (786.98) Crore in Capital Market
DII Net Buy Rs 542.70 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
