Finance - Stock Market Forecast

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

• Major Resistance area for Nifty 50 is at 12,938 12,964 and 13,013. For Tuesday, Nov 24, Support is seen at 12,668 and 12,770

• Major Resistance area for Bank Nifty at 29,400 29,650 and 30,000

• The MSCI Asia Pacific ex-Japan is up 0.27% in early Tuesday trade, while the MSCI Emerging Market index was down -0.04% on Monday

• Trends on SGX Nifty indicate a steady-to-positive outlook for Nifty 50 in India with a 6 points gain. The Nifty futures were trading at 12,959 on the Singaporean Exchange at 08:30 a.m. I.S.T.

• Contracts tied to S&P500, Dow Jones and Nasdaq futures trading in green in early Tuesday morning, a strong Asia-Pacific early morning trade, MSCI APAC ex-Japan up 0.27% on the day and a weakening U.S. dollar with climbing 10-Year Treasuries indicate a positive outlook for Nifty 50 India

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

India Markets

NIFTY 50	OPEN	HIGH	LOW	CLOSE
Monday	12,859	12,892	12,730	12,859

Nifty 50 opened gap-up and closed in the green on Monday trade adding 67 points or 0.52% to 12,926

Financial Services and Private Bank stocks were the poor performers on the day, while IT, Energy and Pharma stocks were at the vanguard on the day’s rally

Nifty P/E for Nov 20, 2020 is standing at 35.55 as recorded by NSE India

On the upside, critical resistance area is 12,938 12,964 and 13,013 ; while on the downside, support area is at 12,668 and 12,770 for Tuesday

The S&P BSE Sensex added 195 points or 0.44% to 44,077 on Monday

Bank Nifty dropped 211 points or -0.72% on Monday to close at 29,024. Level of 28,500 is acting as a good support level now, below which the next support is at 27,388. Critical Resistance at 29,400 29,650 and 30,000

India VIX moved up 6.02% from 19.61to 20.79 levels

Broader market indices outperformed their headline peers — Midcap index added 1.31% ; Smallcap index added 1.67% ; Nifty 500 added 0.71% while Nifty Alpha 50 added 2.21%

Overnight call money rate weighted average stood at 2.78% as per RBI data. It moved in a range of 2.50 — 3.50% for Nov 21

The yield on the benchmark 10-year government bond was up at 5.93% while the rupee strengthened to 74.19 against the U.S. dollar

America Markets

Wall Street spiked and closed in the green on Monday trade after the General Services Administration informed President-elect Joe Biden that the Trump administration is making federal resources available for the transition process

The Dow Jones gained 330 points or 1.1% to 29,594 and the S&P 500 rose 20 points or 0.6% to 3,578 ; while the Nasdaq added 26 points or 0.2% to 11,881

Today in the derivatives market, contracts tied to the Dow Jones Industrial Average is down -0.86%, S&P 500 is down -0.77% while Nasdaq 100 futures dropped -0.21%

U.S. jobless claims, GDP and personal spending data to come on Wednesday

Minutes of the most recent Federal Open Market Committee meeting are due Wednesday

New York’s Metropolitan Transportation Authority (MTA) faces a $16.4 billion deficit through 2024; officials have asked for $12 billion in emergency relief by the end of 2021. Without that aid, the agency warns that it would be forced to make severe service cuts. In a plan presented on Wednesday, the MTA proposed to slash service on subways by 40% and on two commuter rail lines by 50%. Up to a quarter of bus routes across the city face service cuts and more than 9,300 jobs would be eliminated in 2021. In New York City, ridership on the subway remains at about 63-70% below pre-pandemic levels

A report by the NYU Rudin Center for Transportation and Appleseed, an economic consulting firm, estimated that MTA service cuts could trigger a cascade of as many as 450,000 lost jobs and a GDP decline of $65 billion across the New York metropolitan region.

“Large multi-asset investors may need to rotate money into bonds from stocks after strong equity performance so far this month, JP Morgan strategists led by Nikolaos Panigirtzoglou wrote in a note Friday. They include balanced mutual funds, like 60/40 portfolios, U.S. defined-benefit pension plans and some big investors like Norges Bank, which manages Norway’s sovereign wealth fund, and the Japanese government pension plan GPIF.”
“If the stock market rallies into December, there could be an additional $150 billion of equity selling into the end of the month pension funds that tend to rebalance on a quarterly basis,” JP Morgan analysts added.

Asia-Pacific Markets

Most Asian stocks rose broadly in early Tuesday trade, after the triggering of a formal transition process to President-elect Joe Biden

Japan’s Nikkei 225 added 2.65% to 26,203, while Topix 500 added 2.31% to 1,371

South Korea’s Kospi added 0.72% to 2,621

South Korean equities outperformed after encouraging trade data, putting the Kospi index on course for a record close on Monday

In Hong Kong, Hang Seng dropped -0.07% to 26,468

In China, CSI 300 dropped -0.79% to 4,965. Hang Seng China Enterprises dropped -0.51% to 10,611. Shanghai Composite dropped -0.49% to 3,397

Australia’s S&P/ASX 200 added 1.12% to 6,635

Singapore’s Straits Times Index added 0.71% to 2,869

Overall, MSCI Asia-Pacific ex-Japan, is up 0.26%

China opens its $15 trillion Bond Market (fixed-income market) for foreign investors, after having won acceptance into the benchmark bond indexes — such as FTSE Russell, JPMorgan Chase, and Bloomberg Barclays. Global pension funds, starved for yield in a low-growth world, will now have access to safe government debt that pays more than 3%

“With an open financial market with easier inflow and outflow, the Chinese government and central bank will have to be more cautious managing those funding costs and interest rates,” says Lu Ting, chief China economist at Nomura Holdings Inc. in Hong Kong. “And of course, it will make it more challenging to manage the exchange rate.”

“China could enter structural current-account deficits in the future due to its barely positive current-account relative to its size of economy, which will force it to open the market and import capital from abroad,” says Aidan Yao, a senior economist at AXA Investment Managers in Hong Kong

“The harder the U.S. tries to isolate China, the more efforts China should make in opening up,” says Yao Wei, chief China economist at Societe Generale SA in Paris. “Allowing in more foreign investments will further deepen China’s integration into global financial markets, which will make decoupling more difficult.”

“China will turn from an exporter of goods to an exporter of capital, with significant consequences, of course, for the world,” says Stephen Jen, who runs Eurizon SLJ Capital, a hedge fund and advisory firm in London.

EU Markets

European stocks pared gains to close little-changed on Monday trade, as vaccine optimism faded while investors digested weak PMI data

The pan-European Stoxx Europe 600 added 0.10% to 389

Stoxx 50 dropped -0.13% to close at 3,463

Germany’s DAX30 dropped -0.08% to 13,126

London’s FTSE 100 dropped -0.28% to close to 6,333

France’s CAC40 dropped -0.07% to 5,492

Denmark’s OMX Copenhagen 20 dropped -0.99% to 1,395

Luxembourg’s LuxX Index added 0.75% at 1,242

Sweden’s OMX Stockholm 30 dropped -0.24% at 1,921

Italy’s FTSE MIB dropped -0.02% at 21,701

French government plans a three-phase reduction in lockdown measures from next month

U.K. is expected on Wednesday to deliver the government’s spending plans for next year.

Jim Ratcliffe, Britain’s richest man, is joining forces with Hyundai Motor Co. in a bid to give hydrogen fuel cell vehicles the boost they need to become more mainstream. Ratcliffe may also use Hyundai’s fuel cell system in the Grenadier, the Land Rover-like sport utility vehicle Ineos plans to bring to market next year

On the economic data front, flash PMI numbers suggested the Eurozone private sector shrank more than expected in November, as countries introduced more aggressive measures to counter rising coronavirus cases

French bank Credit Agricole shares jumped after its Italian unit launched an offer to buy Italian bank Credito Valtellinese

AstraZeneca Plc. became the third pharmaceutical firm to report that its experimental coronavirus vaccine showed high effectiveness in phase 3 trials, following strong results from Pfizer and Modern

Oil & Natural Gas Markets

WTI and Brent crude futures were up to trade around $42.8 and $45.9 a barrel, respectively on Monday

WTI Crude is trading higher at $43.29 per barrel in early Tuesday trade

Brent Crude is trading higher at $46.28 per barrel in early Tuesday trade

Natural Gas futures is trading higher at $2.714/MMBtu in early Tuesday trade

On MCX-India, Crude oil futures added 2.11% to 3,195 on Monday’s session

On MCX-India, Natural gas futures added 2.60% to 201/MMBtu on Monday’s session

Gold & Silver Markets (+ Copper Futures)

U.S. Gold futures (Comex) weakened to $1,829.60 an ounce in early Tuesday trade

U.S. Spot Gold weakened to $1,825.10 an ounce in early Tuesday trade

Silver futures (Comex) weakened to $23.50 an ounce in early Tuesday trade

Copper futures (Comex) strengthened to $3.2890 per pound in early Tuesday trade

In India, Spot Gold weakened to INR 48,349 per 10 grams in early Tuesday trade

India — NCDEX Agridex

Agricultural futures index tracking the performance of the 10 liquid commodities, was down -1.07% trading at 1,210.60 ; with major decline in Castor Seed and Coriander futures on Monday trade

Currency Markets

The U.S. dollar index, DXY touched 92.52 on Monday trade

INR strengthened 0.07% with USD — INR at 74.0988

JPY weakened -0.52% with USD — JPY at 104.4000

CNY weakened -0.35% with USD — CNY at 6.5860

EUR weakened -0.11% with EUR — USD at 1.1844

GBP strengthened 0.26% with GBP — USD at 1.3310

SEK weakened -0.18% with USD — SEK at 8.6371

*3-Month LIBOR Rate*	*As on 23 Nov 2020*
US DOLLAR	0.21 per cent
Euro	– 0.54 per cent
British Pound	0.05 per cent
Swiss Franc	– 0.77 per cent
Japanese Yen	– 0.10 per cent