Finance - Stock Market Forecast

Index Trend & Conditions – 08:30 a.m. I.S.T.

• Resistance area for Nifty 50 is at 13,000 — 13,250. For Wednesday, Dec 02, Support area is seen at 13,050 12,950 and 12,840

• Resistance area for Bank Nifty at 29,750 — 30,000, while Support area is at 28,900 and 28,270

• The MSCI Asia Pacific ex-Japan is up 0.13% in early Wednesday trade, while the MSCI Emerging Market index is up 0.18%

• Trends on SGX Nifty indicate a muted outlook for Nifty 50 in India with 02 points gain. The Nifty futures were trading at 13,152 on the Singaporean Exchange at 08:30 a.m. I.S.T.

• Contracts tied to U.S. futures opened lower on the day with S&P500, Dow Jones and Nasdaq futures trading in red. A negative Asia-Pacific early morning trade and a weakening U.S. dollar with falling 10-Year Treasury yields indicate a stable-to-negative outlook for Nifty 50 India

• The current mood in the market is bracing and non-committal

India Markets

NIFTY 50	OPEN	HIGH	LOW	CLOSE
Tuesday	13,062	13,128	12,962	13,109

Domestic equity markets opened gap-up on Tuesday trade

Nifty 50 added 140 points or 1.08% to 13,109 and the BSE Sensex added 505 points or 1.15% to 44,655

The index formed a bullish candle on the daily chart, which resembled a Hanging Man candle. It also formed a higher high and low for the second straight session

As long as Nifty stays below 13,200 – 13,250 zone, all up moves, if there are any, will stay vulnerable to sharp profit taking bouts as Nifty is struggling around the upper boundary of the 40-day-old ascending channel, which is in progress from its September low of 10,790 level

Most broader markets under-performed their headline peers — Midcap 100 index added 0.96% ; Smallcap 250 index added 1.16% ; Nifty 500 added 1.08% ; Nifty Alpha 50 added 0.44% and Nifty Alpha Low Volatility 30 added 0.50%

Nifty P/E for Dec 01, 2020 advanced to 36.05 as recorded by NSE India

Bank Nifty opened gap-up and witnessed selling pressure at 29,900 level. The index added 208 points or 0.71% to 29,817. Levels of 28,900 and 28,270 to act as good support levels. Resistance area is at 29,700 — 30,000

India VIX added 1.84% from 20.22 to 21.18 levels

Overnight call money rate weighted average stood at 3.13% as per RBI data. It moved in a range of 1.90 — 3.40% for Nov 27

The yield on the benchmark 10-year government bond fell two basis points to 5.95%, while the rupee strengthened to 73.5360 against the U.S. dollar

Indian drugmaker Wockhardt Ltd. has entered into an agreement with the UK government to supply AstraZeneca Oxford’s Covid-19 vaccine

Bajaj Auto has initiated discussions with KTM’s parent Pierer Mobility AG (PMAG) to swap its stake in KTM for a stake in the latter

America Markets

Wall Street traded deeply in the green Tuesday trade building on the strong gains from the previous month fuelled by vaccine breakthroughs

The Dow Jones added 185 points or 0.63% to 29,823 and the S&P 500 added 41 points or 1.13% to 3,662 ; while the Nasdaq added 156 points or 1.28% to 12,355

Contracts tied to U.S. futures opened lower in early Wednesday trade. S&P500 futures is down -0.26%, Dow Jones futures is down -0.26% whereas Nasdaq futures is down -0.18%

According to Bloomberg, Federal Reserve Chair Jerome Powell is expected to caution lawmakers that the U.S. economy remains in a damaged and uncertain state. In testimony released ahead of a Tuesday hearing before the Senate Banking Committee, Powell gave no indication how the central bank may respond to those worries when it conducts its next policy meeting

U.S. biotech company Moderna Inc. closed more than 20% higher on Monday, after seeking U.S. clearance for its Covid vaccine. A look at Moderna’s stock sheet from March low ($ 30) to Monday, 01 December ($ 152), when it unveiled an analysis of 196 cases confirming its 94.1% effective rate

As per a report by Wall Street Journal, there are new signs that the coronavirus first started its global spread before researchers and public health officials were aware of it. U.S. health authorities have found evidence of infection in blood donations collected by the American Red Cross in mid December 2019 from residents in nine U.S. states

Vice President Mike Pence told governors on Monday that distribution of a coronavirus vaccine could begin by the third week of December

“Recent news on the vaccine front is very positive for the medium term,” Powell said in testimony released Monday ahead of a Tuesday hearing before the Senate Banking Committee. “For now, significant challenges and uncertainties remain, including timing, production and distribution, and efficacy across different groups.”

Asia-Pacific Markets

Asian stocks were mixed in early Wednesday trade after a record close for their U.S. peers, as investors assess revived fiscal-spending talks and progress on coronavirus vaccines

Japan’s Nikkei 225 dropped -0.12% to 26,756, with Topix 500 adding 0.26% to 1,376

South Korea’s Kospi added 1.41% at 2,671

In Hong Kong, Hang Seng dropped -0.60% to 26,407 while Hang Seng China Enterprises dropped -1.06% to 10,546

In China, CSI 300 dropped -0.04% to 5,065 and Shanghai Composite dropped -0.09% to 3,448

Australia’s S&P/ASX 200 dropped -0.26% to 6,571

Singapore’s Straits Times Index dropped -0.41% to 2,802

Overall, MSCI Asia-Pacific, is up 0.98% on the day

South Korea’s consumer price inflation (chart below) increased 0.6% YoY in November 2020 following a 0.1% rise in the previous month, while markets expected a 0.9% gain

The Caixin China General Manufacturing PMI rose to 54.9 in November 2020 from 53.6 in October and beating market estimates of 53.5. This was the 7th-straight month of growth in factory activity and both output and new orders rose at the fastest rate since November 2010

China Caixin General Manufacturing Purchasing Managers’ Index (Jan – Nov 2020)

SoftBank Group Corp. has agreed to acquire a 10.1% stake in a Swedish cloud-based platform provider Sinch AB for over $800 million. Sinch has soared 300% this year

China’s No. 2 smartphone maker Xiaomi Corp. is seeking up to $3.2 billion in share placement and selling $855 million in convertible bonds

Australia’s economy (Real GDP) rebounded 3.3% in September-ended Q3 FY21, after a record contraction -7% in the prior period and beating market consensus of 2.6% growth. It was the first expansion since the fourth quarter of 2019 and the fastest since the March quarter of 1976, as massive monetary and fiscal stimulus boosted household consumption.

The Reserve Bank of Australia held a policy meeting on Tuesday — retaining the official interest rate at 0.1% but has flagged the economic road to recovery out of the coronavirus pandemic will be long and bumpy

“The positive news on vaccines has boosted equity markets, lowered risk premiums and supported further increases in some commodity prices,” said Reserve Bank of Australia’s governor Philip Lowe. “In the RBA’s central scenario, it will not be until the end of 2021 that the level of GDP reaches the level attained at the end of 2019.”

EU Markets

Major bourses in Europe traded in the green on Tuesday trade, following strong double-digit gains in November

Cyclicals led gains in Europe

The pan-European Stoxx Europe 600 added 0.38% to 391 and Stoxx 50 added 0.91% to close at 3,524

Germany’s DAX30 added 0.77% to 13,393

London’s FTSE 100 added 1.73% to close to 6,375

U.K. stocks were up almost 2% after Goldman Sachs Group Inc. strategists called them a buy ahead of a Brexit trade deal

France’s CAC40 added 0.89% to 5,568

Denmark’s OMX Copenhagen 20 dropped -0.51% to 1,397

Luxembourg’s LuxX Index added 1.56% at 1,269

Sweden’s OMX Stockholm 30 added 0.32% at 1,923

Italy’s FTSE MIB added 0.23% at 22,111

With the Brexit transition period ending on Dec. 31, i.e. when the U.K. is scheduled to leave the EU’s single market and customs regime. U.K. Prime Minister Boris Johnson’s officials believe a Brexit trade deal could be reached within days if both sides continue working in “good faith” to resolve what the U.K. sees as the last big obstacle in the talks — fishing rights

Industrials giant Siemens AG and technology firm SAP SE will collaborate with automaker BMW AG and others to build a cloud-based data exchange platform that doesn’t rely on U.S. or Chinese technology, mainly due to geopolitical tensions. This platform will enable German car manufacturers to identify production bottlenecks or parts shortages, and avoid any production outage

Pfizer Inc. and partner BioNTech SE sought regulatory clearance for their vaccine in the European Union

Debenhams Plc., a 232-year-old U.K. department store chain, said it’s preparing to close its doors for good after failing to find a buyer. That’s just a day after Philip Green’s Arcadia Group, which includes Topshop, began insolvency proceedings. The news means that within 24 hours, two of the biggest retailers in Britain, which collectively employ 25,000 people, have failed.

Oil & Natural Gas Markets

Oil slid in early Wednesday trade

OPEC+ talks were delayed for two days to give ministers more time to reach a deal on whether to delay January’s oil-output increase, leaving the matter unresolved

WTI Crude is trading lower at $44.12 per barrel in early Wednesday trade

Brent Crude is trading lower at $47.04 per barrel in early Wednesday trade

Natural Gas futures is trading lower at $2.850/MMBtu in early Wednesday trade

On MCX-India, Crude oil futures dropped -0.36% to 3,314 on Tuesday trade

On MCX-India, Natural gas futures dropped -3.00% to 210/MMBtu on Tuesday trade

Gold & Silver Markets (+ Copper Futures)

Gold is on course for its largest monthly decline in four years, in early Wednesday trade

Meanwhile, Copper surged to a seven-year high, again, in early Wednesday trade

U.S. Gold futures (Comex) strengthened to $1,784.50 an ounce

U.S. Spot Gold strengthened to $1,810.18 an ounce

Silver futures (Comex) strengthened to $23.81 an ounce

Copper futures (Comex) weakened to $3.4900 per pound — highest since 2014

Copper is seen as a Bellweather for the global economy & an important part of the transition to low-carbon energy resources.

In India, Spot Gold weakened to INR 47,519 per 10 grams

India — NCDEX Agridex

Agricultural futures index tracking the performance of the 10 liquid commodities, was down -0.78% trading at 1,183.75 ; with demand seen in Mustard Seed and Coriander futures on Tuesday trade

Currency Markets

The U.S. dollar index, DXY extended its slide, trading at 91.167 in early Wednesday trade to a more than two-year low

INR strengthened with USD / INR at 73.6675

JPY weakened with USD / JPY at 104.5000

CNY strengthened with USD / CNY at 6.5710

EUR strengthened with EUR / USD at 1.1994

GBP strengthened with GBP / USD at 1.3358

SEK strengthened with USD / SEK at 8.5327

*3-Month LIBOR Rate*	*As on 01 Dec 2020*
US DOLLAR	0.23 per cent
Euro	– 0.55 per cent
British Pound	0.04 per cent
Swiss Franc	– 0.77 per cent
Japanese Yen	– 0.12 per cent