Index Trend & Conditions | 08:00 IST
• Major Resistance created at 12,180—12,340 area for Nifty50
• For Monday, Nov 09, Support at 12,020 and 11,760 with Resistance at 12,340 and 12,430 for Nifty50
• Trends on SGX Nifty pointed to a gap-upstart for Nifty50 in India with a 148 points gain. The Nifty futures were trading at 12,416 on the Singaporean Exchange at 08:00 IST
• Contracts tied to S&P500 and Nasdaq futures trading positive in early Monday morning with a strong momentum, a positive outlook of Asia-Pacific early morning trade, MSCI APAC ex-Japan up 0.78% on the day and a weakening US dollar with 10-Year Treasuries surging higher indicate a positive start with a range-bound (between 12,430 and 12,180) bias for Nifty 50 India
• The current mood in the market is bracing and non-committal
India Markets
| NIFTY 50 | OPEN | HIGH | LOW | CLOSE |
|---|---|---|---|---|
| Friday | 12,156 | 12,280 | 12,131 | 12,263 |
Nifty50 witnessed a gap-up opening on Friday, and continued their march for a positive close for the 5th-session in a row, amid a highly volatile global market
Nifty50 added 140 points or 1.18% on Thursday to close at 12,263
Momentum oscillators on short-term charts have reached the extremely overbought zone, and hence, the upward momentum may not sustain
The index formed a bullish candle on the daily and weekly scales and made higher highs and lows for the fourth session in a row
Telecom and Pharma stocks was the worst performers on Friday’s session, while Financial Services and Private Banks stocks were at the vanguard of the rally
Financials continued to outperform the frontline index during the week
On the up side, crucial level or resistance is seen at 12,340 and 12,430 for Monday
While, on the downside, support is seen at 11,760 and 12,020 for Monday
The BSE Sensex index gained 552 points or 1.34% to 41,890 on Friday
Nifty Bank index formed a ‘Golden Cross’ for the first time since November 2019. A Golden Cross is formed when the stock or the index’s 50-Day Moving Average (DMA) crosses above its 200-DMA, a crucial long-term trend indicator
Once the crossover occurs, the long-term moving average is considered the major support level for the markets. The Nifty Bank index advanced 12% to 26,798 for the week ended November 6
India VIX fell 2.21 per cent from 20.96 to 20.49 levels
Broader market indices closed higher on the Friday. The Midcap index advanced 0.71% while the smallcap index added 0.49%
The overnight call money rate weighted average stood at 3.14% according to RBI data. It moved in a range of 1.80—3.45% as on Nov 05
RIL was the top gainer among the Sensex stocks, as it rose 3.78% to Rs 2,029
Amazon Web Services, the top seller of cloud-computing services, is investing 207.6 billion rupees ($2.8 billion) to set up multiple data centers in the southern Indian state of Telangana
“A strong and vibrant India can contribute to stabilization of the world economic order,” Modi said, pledging to “do whatever it takes to make India the engine of global growth resurgence. There is an exciting period of progress ahead. I invite you to be a part of it.”
Analysts see multi-billion dollar opportunities for Indian IT firms and demand for new categories of FMCG products in the post-Covid market. And certain sectors such as real estate may take time to come back
America Markets
Wall Street set to start the week in the green, with Dow Jones futures surging 300 points as Joe Biden’s victory in the US presidential race in the US presidential election removed some uncertainty that has been rattling markets
Democrats were unlikely to take back control of the Senate, while in the House, they were poised for their thinnest majority in about two decades, meaning significant reforms or corporate tax increases are less likely
If the US ends up with a divided government it could mean limited fiscal stimulus, capped increases in bond yields and dampened inflation expectations, while risk assets get a boost, according to BlackRock Investment Institute.
“Developments point to a return to a near-term market environment dominated by low rates, a hunt for yield and growth stocks”
“Democrat Joe Biden won the presidency and his party retained control of the House, but appears unlikely to take control of the Senate. The prospect of divided government has driven down yields and the environment bodes well for credit and growth companies”
Last week, the Dow climbed 6.9%, the S&P 500 rose 7.3%, and the Nasdaq jumped 9%
Today in derivatives market, Contracts tied to the S&P 500 added 1.47% while Nasdaq 100 futures added 2.08%
Tech and health-care stocks helped the S&P 500 Index gain 7.3% last week, while 10-year U.S. Treasury yields retreated by about five basis points. The greenback weakened.
Tech and health-care companies, as well as quality and large-cap stocks, are expected to perform well under a Biden presidency with a divided government
Assets in emerging markets may benefit from improved trade sentiment, especially in Asia outside of Japan
Warren Buffett has gone from a stock-buyback skeptic to one of the world’s biggest repurchasers as his own firm becomes his favorite investment in the pandemic
Berkshire Hathaway Inc. spent the third quarter buying back about $9 billion of its own stock, more than it had repurchased in any full year in its history
Earlier, Buffett has invested a roughly $6 billion in Japanese trading houses, a bet on Snowflake Inc. and a deal for natural gas assets
Biden has proposed a $2 trillion climate plan that calls for an emissions-free electric grid in the U.S. in 15 years, although the likely continued Republican hold on the Senate may limit Biden’s climate agenda mostly to actions he can take through executive order.
A Biden administration is expected to quickly reverse much of Trump’s “America First” approach to foreign affairs, breathing new life into multilateral institutions such as the North Atlantic Treaty Organization, the UN, and the World Trade Organization. Biden has pledged to restore U.S. leadership and to work with allies on everything from nuclear proliferation to trade to global health.
Asia-Pacific Markets
Asia Pacific markets mostly rose on Monday, building on the momentum from last week’s strong performance as the long-awaited confirmation of Joe Biden’s victory in the US presidential race removed some uncertainty that has been rattling markets
The Nikkei 225 added 1.96% to 24,802 in early Monday trade
Topix 500 added 1.32% to 1,298 in early Monday trade
South Korea’s Kospi added 1.13% to 2,443 in early Monday trade, hitting 28-month high
In Hong Kong, the Hang Seng Index added 1.23% to 26,028 in early Monday trade
China’s CSI 300 Index added 1.20% at 4,944 in early Monday trade
Hang Seng China Enterprises Index added 1.31% to 10,635 in early Monday trade
Shanghai Composite Index added 1.06% at 3,347 in early Monday trade
Australia’s S&P/ASX 200 added 1.62% to 6,290 in early Monday trade
Singapore’s Straits Times Index added 1.38% to 2,614 in early Monday trade
Overall, MSCI’s broadest index of Asia-Pacific shares outside Japan, is up 0.78%
China’s October exports unexpectedly accelerated and inflation and credit reports due this week will likely signal stable underlying demand
China will announce CPI and PPI data on Tuesday. CPI probably slowed to 0.8% in October from 1.7% the previous month
China’s local bonds have returned 6.6% this year in dollar terms, according to a Bloomberg Barclays index, while the onshore yuan has gained more than 5%
Singapore’s nation’s economy contracted 7% in the third quarter from a year ago and the overall unemployment rate climbed to its highest level since 2004
While many sectors have shown improvement since lockdown measures were relaxed, some such as aviation, transport and tourism are likely to remain in “suspended animation” for some time because of second waves in other parts of the world, Singapore’s PM Lee Hsien Loong said in a speech to members of his ruling party on Sunday. “For Singapore, the government needs to balance an easing of restrictions as it runs the risk of cases shooting up again.”
In Asia, “we are hearing some fears coming from Japan and India that under Biden the U.S. could return to a multilateral and institutional approach” that China could manipulate to its advantage, said Bruno Macaes, Portugal’s former Europe minister and a non-resident senior fellow at the Hudson Institute.
A key question will be how Biden deals with China after ties grew increasingly acrimonious toward the end of Trump’s presidency. Both Biden and Trump vowed to be tough on Beijing, but Biden has pledged to work with allies to force China to “play by the rules.”
“The flows data over the past few months suggest that investors’ purchases of Emerging Market assets have been heavily biased towards a handful of Asian countries,” said Nick Stadtmiller, a strategist at Medley Global Advisors in New York. “Asian economies are expected to grow faster than other emerging-market peers in the coming year, and that growth differential has been supportive of Asian markets.”
EU Markets
European equities rallied 7% on the previous week despite Friday’s losses
Europe booked the biggest weekly gain since mid-April, mainly due to an improvement in risk appetite in the wake of the US presidential election, strong earnings reports from companies like Teleperformance, Societe Generale and BNP Paribas, as well as an upwardly revision in both manufacturing and composite PMI
The pan-European Stoxx 600 index dropped -0.25% at 365 on Friday
Stoxx 50 dropped -0.36% to close at 3,204on Friday
Germany’s DAX30 dropped 0.70% to 12,480 on Friday
London’s FTSE 100 added 0.07% to close to 5,910 on Friday
France’s CAC40 dropped -0.46% to 4,960 on Friday
Denmark’s OMX Copenhagen 20 Index dropped -0.67% at 1,418 on Friday
Luxembourg’s LuxX Index dropped -0.11% at 1,120 on Friday
Sweden’s OMX Stockholm 30 Index dropped -0.15% at 1,819 on Friday
Italy’s FTSE MIB Index dropped -0.25% at 19,681 on Friday
The principal European anxiety is for a coherent Asian strategy, which is today lacking.
Turkey’s lira, the worst performing emerging-market currency of 2020, will likely remain volatile after Erdogan appointed former Finance Minister Naci Agbal to replace Murat Uysal as central bank governor.
Oil & Natural Gas Markets
Oil prices gained nearly 3% on Monday
Supporting prices were recent signals that OPEC is considering a possible extension of oil output restrictions into the first quarter of 2021
WTI Crude is trading higher at $38.21 per barrel in early Monday trade
Brent Crude is trading higher at $40.52 per barrel in early Monday trade
Natural Gas futures is trading lower at $2.900 per mmbtu in early Monday trade
On MCX-India, Crude oil futures dropped -3.66% to 2,766 on Friday’s session
On MCX-India, Natural gas futures dropped -3.16% to 214 on Friday’s session
“Libya boosted oil production to more than 1 million barrels a day, a milestone for the North African country after civil war all but shut its energy industry. Libya aims to pump 1.3 million barrels a day by the beginning of 2021.”
Gold & Silver Markets (+ copper futures)
Gold prices held steady on Monday, close to a seven-week high hit in the previous week
US Gold futures (Comex) strengthened to $1,955.90 an ounce in early Monday trade
US Spot Gold strengthened to $1,955.97 an ounce in early Monday trade
Silver futures (Comex) strengthened to $25.84 an ounce in early Monday trade
Copper futures (Comex) stayed flat at $317.80 per pound in early Monday trade
Copper prices supported by growing demand from top consumer China and a decline in production in Chile, -0.8% drop year-on-year
In India, Spot Gold strengthened to INR 51,657 per 10 grams in early Monday trade
India – NCDEX Agridex
Agricultural futures index tracking the performance of the 10 liquid commodities, was down -0.16% trading at 1,215.50 ; with major demand seen in Cotton Seed Oilcake and Chana futures on Friday
Currency Markets
The dollar remained under pressure near the 92 area on Monday
The dollar has been weakening since May amid rising levels of debt coupled with expectations for an extended period of low interest rates
INR strengthened 0.25% with USD-INR at 74.2013
JPY stayed unchanged with USD-JPY at 103.3500
CNY strengthened 0.29% with USD-CNY at 6.5933
China’s yuan is emerging as one of the most sensitive assets to the outcome of the US presidential elections. The offshore yuan climbed as much as 0.9% in late trading Wednesday to 6.6202 per dollar, its strongest level since July 2018, after earlier falling as much as 1.4% (cited Bloomberg)
EUR strengthened 0.13% with EUR-USD at 1.1890
GBP strengthened 0.21% with GBP-USD at 1.3183
SEK strengthened 0.22% with USD-SEK at 8.6217
| 3-Month LIBOR Rate | As on 06 Nov 2020 |
| US DOLLAR | 0.23 per cent |
| Euro | – 0.54 per cent |
| British Pound | 0.04 per cent |
| Swiss Franc | – 0.77 per cent |
| Japanese Yen | – 0.10 per cent |
Bond Markets
Americas : 10-Year Govt Bond Yields
United States : Up 6 basis points at 0.82%
Canada : Up 3 basis points at 0.64%
Europe, Middle East & Africa : 10-Year Govt Bond Yields
Germany : Up 2 basis points at -0.62%
United Kingdom : Up 4 basis point at 0.27%
France : Up 1 basis point at -0.36%
Italy : Down 3 basis points at 0.64%
Spain : Up 1 basis point at 0.09%
Netherlands : Up 2 basis points at -0.52%
Asia Pacific : 10-Year Govt Bond Yields
India : Up 1 basis point at 5.86%
Japan : Up 1 basis point at 0.02%
Australia : Up 3 basis points at 0.77%
Hong Kong : Up 3 basis points at 0.34%
Singapore : Up 1 basis point at 0.78%
South Korea : Up 4 basis points at 1.58%
Fund Flows on NSE, BSE and MSEI – Nov 06 2020 (source NSE)
FII Net Buy Rs 4,869.87 Crore in Cash Market
DII Net Sell Rs (2,938.66) Crore in Cash Market
