Index Trend & Conditions – 07:15 a.m. I.S.T.
• Resistance zone for Nifty 50 is at 14,540 14,507 and 14,450. For Friday, Mar. 26, Support area is seen around 14,264
• Support levels for Bank Nifty is around 32,322; while Resistance zone is at 33,568 33,872 and 34,150 for Mar. 26
• The MSCI Asia Pacific ex-Japan is trading higher 0.72%, and the MSCI Emerging Market index is up 0.61%
• Trends on SGX Nifty look poised to a gap-up opening for Nifty 50 in India. The Nifty futures are trading 89 points, or 0.62% higher at 14,520 on the Singaporean Exchange at 07:15 a.m. I.S.T.
• U.S. equity futures opened higher in early morning trade with S&P 500, Dow Jones and Nasdaq futures trading in green territory; alongside a positive start in Asia-Pacific benchmarks gauges in early Friday trade with equities edging higher in Japan, South Korea and Australia; a positive MSCI Asia-Pacific ex-Japan index; U.S. Dollar strengthening to 92.76 with 10-Yr Treasury Yields steady at 1.62% and Gold futures weakening to $1,728 an ounce indicate a mixed and volatile outlook in Indian equity markets amid channel-wise resistance
• Indian equity markets are currently witnessing “Sell on Rise” due to climbing daily new Covid cases in India now close to 50,000 cases per day and strengthening U.S. dollar
• The IMF is considering creating up to $650 billion in additional reserve assets to help developing economies cope with the pandemic
India Markets
| NIFTY 50 | OPEN | HIGH | LOW | CLOSE |
|---|---|---|---|---|
| Thursday | 14,570 | 14,575 | 14,264 | 14,324 |
India’s equity benchmarks languished close to two-week lows on Thursday trade, as investors worried that India’s Covid-19 response was falling behind amid a four-month strong U.S. dollar
The blue-chip NSE Nifty 50 index dropped 224 points or -1.54% to 14,324 and the benchmark S&P BSE Sensex dropped 740 points or -1.51% to close at 48,440
Broader markets under-performed headline peers — Midcap 100 index dropped -2.04%; Smallcap 250 index dropped -1.91% and Nifty 500 dropped -1.67%
Nifty P/E for Mar. 24 fell to 39.02 from 39.63 with Nifty P/B decreased to 4.06 from 4.12, as recorded by NSE India
Bank Nifty opened positive but failed to hold above 33,500 level as it drifted towards 32,400 level. However, the index witnessed a good short-covering bounce before the bears took it back towards 33,000 level. The index dropped 286 points, or -0.86%, to settle at 33,006
India VIX or the barometer of nervousness in the market, moved up 1.06% from 22.45 to 22.69 levels
VIX needs to cool down below 20 level for the bullish grip to continue and smoothen the move in the market
Overnight Call Money rate weighted average stood at 3.27% as per RBI data. It moved in a range of 1.90 — 3.50% for Mar 24
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 to 6.13%, while the rupee weakened marginally to 72.6800 per U.S. dollar
America Markets
U.S. stocks rose on Thursday trade, averting a third consecutive day of declines, as the economic picture continued to brighten
U.S. stock indexes also shrugged off the Labor Department’s jobless claims report – the most timely indicator of economic health – that showed fewer-than-expected Americans filed new claims for state unemployment benefits last week
The broad-based S&P 500 rose 20 points, or 0.5%, to 3,909
The Dow Jones Industrial Average, composed mostly of cyclical stocks, added 199 points, or 0.6%, to 32,619
Utilities, consumer staples and real estate stocks – perceived as safer during times of economic uncertainty – were among the few gainers on the day
The tech-heavy Nasdaq Composite Index rose 15 points, or 0.1%, to 12,977; lagging on account of the weakness among shares of some tech companies
U.S. equity futures opened higher in early Friday trade. S&P500 futures is up 0.07%; Dow Jones futures is up 0.03% and Nasdaq futures is up 0.13%
10-Yr U.S. Treasury yields, which move inversely to the price, steady at 1.62% after another lackluster auction of 7-Yr notes in early Friday, with dollar strengthening to 92.76
The Cboe Volatility Index, known as Wall Street’s “fear gauge,” fell -6.56% to 19.81 on Thursday
In testimonies to Congress this week, Federal Reserve Chair Jerome Powell expressed optimism about a strong U.S. economic rebound, while Treasury Secretary Janet Yellen said future tax hikes will be needed to pay for public investments
The U.S. economy expanded an annualized 4.3% on quarter in Q4 2020, higher than 4.1% in the second estimate, mainly due to an upward revision to private inventory investment that was partly offset by a downward revision to nonresidential fixed investment
The number of Americans filing for unemployment benefits dropped to 684K in the week ended March 20th, its lowest since the pandemic hit the labor market in March 2020 and well below market expectations of 730K, adding to signs of a gradual job recovery
U.S. factory activity picked up in early March amid strong growth in new orders, but supply chain disruptions because of the COVID-19 pandemic continued to exert cost pressures for manufacturers, which could keep inflation fears in focus. Data firm IHS Markit said its flash U.S. manufacturing PMI increased to 59 in the first half of this month from a final reading 58.6 in Feb
Growth in the services industry is also gaining traction. The IHS Markit’s flash services sector PMI climbed to 60 this month, the highest since July 2014, from a final reading of 59.8 in February. That likely reflected broader economic re-engagement amid an acceleration in the pace of inoculations
“It’s a tale of two different markets at this point and it depends on what the market wants to focus on,” said Faron Daugs, founder and chief executive officer of Harrison Wallace Financial Group in Libertyville, Illinois. “Does it want to focus on stimulus, increased vaccinations and re-opening economies or on potential taxes, increased regulation potentially in certain sectors, extremely high spending and inflation.”
Asia-Pacific Markets
Asian stocks followed their U.S. peers higher in early Friday trade, amid progress on vaccine distribution and an end to some restrictions for banks
Shares opened higher in Japan and gains across the region lifted MSCI Inc.’s Asia Pacific gauge
Japan’s Nikkei 225 added 1.20% to 29,072 and Topix 500 added 1.04% to 1,534
South Korea’s Kospi added 0.38% to 3,019
In Hong Kong, Hang Seng added 1.03% to 28,191 and Hang Seng China Enterprises added 1.19% to 10,864
In China, CSI 300 added 0.86% to 4,969 and Shanghai Composite added 0.81% to 3,390
Australia’s S&P/ASX 200 added 0.44% to 6,820
Global sentiment took a hit after a selloff in Chinese technology shares on worries that they will be de-listed from U.S. bourses
China proposed a set of global rules for central bank digital currencies on Thursday, from how they can be used around the world to highly sensitive issues such as monitoring and information sharing
“Interoperability should be enabled between CBDC (central bank digital currency) systems of different jurisdictions and exchange,” he said. The PBOC had shared the proposals with other central banks and monetary authorities, he said. “Information flow and fund flows should be synchronised so as to facilitate regulators to monitor the transactions for compliance.”
EU Markets
European equities inched lower on Thursday trade, as investors grew wary about the economic outlook following a new round of coronavirus restrictions in the euro zone and regulatory concerns hit Chinese stocks
The pan-European Stoxx Europe 600 added 0.14% to 418 and Stoxx 50 stayed unchanged at 3,832
Germany’s DAX30 added 0.08% to 14,621
London’s blue-chip FTSE 100 dropped -0.57% to 6,674
France’s CAC40 added 0.09% to 5,952
Denmark’s OMX Copenhagen 20 added 0.26% to 1,419
Spain’s IBEX 35 dropped -0.41% to 8,409
Italy’s FTSE MIB added 0.39% to 24,208
Sweden’s OMX Stockholm 30 dropped -0.52% to 2,173
H&M dropped -1.9% after at least one Chinese online retailer appeared to drop its products following social media attacks on the Swedish company for saying it was “deeply concerned” about reports of forced labour in the farwestern region of Xinjiang in China
Shares of German sportswear firm Adidas, which also came under fire, was down -3.2%
Cineworld fell 6.8% after it reported a $3 billion loss for 2020 and said it will ask shareholders to approve a raise in its debt ceiling
Euro zone stocks cut losses after IHS Markit’s flash composite PMI, seen as a good guide to economic health, bounced above the 50 mark, separating growth from contraction, to 52.5 this month compared with February’s 48.8, well above forecasts of 49.1
The consumer confidence indicator in the Euro Area rose by 4 points to -10.8 in March of 2021, from the previous month’s figure of -14.8 and well above market expectations of -14.5
“The sharp increase in euro zone consumer confidence in March came as a big surprise given tighter restrictions across the bloc and ongoing difficulties with the AstraZeneca vaccine,” said Melanie Debono, Europe economist at Capital Economics.
Oil & Natural Gas Markets
Crude-oil prices tumbled in early Friday trade, as a strengthening dollar and mounting lockdowns in Europe blunted the potential impact of crude cargoes backing up outside the blocked Suez Canal
WTI Crude is trading at $59.19 per barrel
Brent Crude, the international benchmark for oil, is trading at $62.49 per barrel
Natural Gas futures is trading lower at $2.576/MMBtu
Commodities Markets
Gold futures fell in early Friday trade on the back of a four-month stronger dollar
Gold unlikely to rise above $1,700 – $1,750 range in the near-term, until growth and inflation likely stalls with investors favoring assets and commodities that track higher inflation
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 $1,728 an ounce
Silver futures (Comex) is trading at $25.13 an ounce
Gold / Silver Ratio rose to $69.05
Copper futures (Comex) rose to $4.0110 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 $165.50 per tonne
In India, Spot Gold is trading at INR 45,144 per 10 grams
“Should investors see more runway to challenge the Fed’s outlook and push yields higher, that surge is likely to come at the expense of gold’s upside,” said FXTM market analyst Han Tan. “Gold has all to do to break out of its current downward trend, especially with the recovering dollar standing in its way. Spot gold has to first break above its 50-day simple moving average in order to send a favourable signal to bullion bulls.”
“Gold remains pressurized by higher U.S. bond yields, rebound in U.S. 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 strengthened to a four-month high of 92.74 in early Friday trade, supported by a wave of optimism due to improving U.S. economic data, the rollout of coronavirus vaccines, and rising Treasury yields
INR weakened with USD / INR at 72.6800
JPY weakened with USD / JPY at 109.1200
CNY weakened with USD / CNY at 6.5463
EUR weakened with EUR / USD at 1.1778
GBP strengthened with EUR / GBP at 0.8573
GBP strengthened with GBP / USD at 1.3739
“The dollar is absolutely critical,” said James Athey, investment director at Aberdeen Standard Investments. “If the dollar starts rallying that becomes a problem. It means commodity weakness and emerging-market weakness and it starts to provide a disinflationary countervailing narrative.”
| 3-Month LIBOR Rate | As on 25 Mar 2021 |
| US DOLLAR | 0.20 per cent |
| Euro | – 0.55 per cent |
| British Pound | 0.09 per cent |
| Swiss Franc | – 0.75 per cent |
| Japanese Yen | – 0.07 per cent |
Bitcoin
Bitcoin / U.S. Dollar rose 1.69% in early Friday trade to $52,166 as of 07:15 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 : 1.62%
Canada : 1.45%
Europe, Middle East & Africa : 10 – Year Govt Bond Yields
Germany : -0.39%
United Kingdom : 0.73%
France : -0.14%
Italy : 0.58%
Netherlands : -0.25%
Asia Pacific : 10 – Year Govt Bond Yields
India : 6.13%
Japan : 0.07%
Australia : 1.67%
Hong Kong : 1.12%
Singapore : 1.58%
South Korea : 1.98%
Fund Flows on NSE, BSE and MSEI — 25 Mar 2021
FII/FPI Net Sell Rs (3,383.60) Crore in Capital Market
DII Net Buy Rs 2,267.69 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
