Finance - Stock Market Analysis

Index Trend & Conditions | 08:50 IST

• Major Resistance created at 12,430—12,827 area for Nifty50

• For Tuesday, Nov 10, Support at 12,450 12,347 and 12,264 with Resistance at 12,827 for Nifty50

• Trends on SGX Nifty pointed to a gap-upstart for Nifty50 in India with a 126 points gain. The Nifty futures were trading at 12,624 on the Singaporean Exchange at 08:50 IST

• Contracts tied to S&P500 and Nasdaq futures trading in the red in early Tuesday morning, a positive outlook of Asia-Pacific early morning trade, MSCI APAC ex-Japan up 0.43% on the day and a weakening US dollar with 10-Year Treasuries surging higher indicate a positive start for Nifty 50 India with a mixed bias (especially IT Stocks)

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

India Markets

NIFTY 50	OPEN	HIGH	LOW	CLOSE
Monday	12,399	12,474	12,367	12,461

Nifty opened with a gap up on Monday and continued its northward journey by surpassing its previous lifetime high of 12,430 level

Nifty50 added 197 points or 1.61% on Monday to close at 12,461

The bulls have taken a strong grip and taken Nifty to a new high

The advance-decline ratio supports the market momentum along with a broad-based rally in most of the sectors

The index formed a bullish candle on the daily scale along with runaway gaps and continued to make higher highs and lows for the 5th—session in a row

Auto and Pharma stocks was the worst performers in today’s session, while Telecom and Private Banks stocks were at the vanguard of the rally

On the up side, crucial level or resistance is seen at 12,827 for Tuesday

While, on the downside, support is seen at 12,450 12,347 and 12,264 for Tuesday

The BSE Sensex index gained 704 points or 1.68% to 42,597 on Monday

Bank Nifty opened with a gap-up and continued its positive momentum towards the 27,600 level as buying emerged in all the banking stocks

The index formed a strong bullish candle on the daily scale and has been making higher highs and lows since last six sessions

India VIX fell 1.89 per cent from 20.50 to 20.11 level

Broader market indices closed higher on the day. The Midcap index advanced 0.87% while the smallcap index added 0.41%

The overnight call money rate weighted average stood at 3.62% according to RBI data. It moved in a range of 2.45—3.90% as on Nov 07

“Oil has fundamental headwinds and my bet for the last five-six months has been that even in the 2030s, oil would be $50 or below. Now that is a big deal for India,” said Maneesh Dangi, CIO, Fixed Income, Aditya Birla Sun Life AMC. “As a country, we buy pretty much all the oil that we consume and now we are likely to pay $40—$50 and we are going to most probably pay above 2% of GDP now. That is a huge saving — almost 1.5% of saving of GDP on a Rs 200-lakh crore economy, that is Rs 3 lakh crore or $40—$50 billion worth of savings. With that money, we can do something more productive.”

America Markets

The Dow Jones and the S&P 500 came close to hitting a record high on Monday, boosted by bank and energy stocks as investors bet on more economically sensitive sectors after Pfizer revealed a vaccine breakthrough

The Dow Jones dropped 351 points or -1.19% to 29,158

The S&P 500 added 1.17% to 3551

The Nasdaq dropped 182 points or -1.53% to 11,714

Today in derivatives market, Contracts tied to the S&P 500 have dropped -0.50% while Nasdaq 100 futures dropped -0.45%

Shares of Pfizer were up near 8%

Stocks also gained as risk appetite improved worldwide, amid expectations of a calmer and stable Biden’s presidency, and as it is likely that Republicans will keep control of the Senate making it harder for the new administration to raise taxes and expand regulation on businesses

The US and Europe are in line to get the first doses of an experimental coronavirus vaccine after a partnership between Pfizer Inc. and BioNTech SE delivered dazzling preliminary results in a large patient trial.

Even before Covid-19 came along to further skew the balance of trade, the US’s deficit with China had been increasing. Individual policies tend to dominate “trade narratives” but exchange rates also matter and Biden’s win has sent the dollar plummeting and the yuan surging. Trump’s 2016 win sparked a rally in the US dollar that never really went away, boosting the dollar further by roiling markets and creating safe-haven appetite and further lowering demand for American goods.
It’s early days of course, but so far the president-elect is already leveling the trade playing field with China without actually having to do anything to level the trade playing field with China.

“We expect a Biden administration to adopt a more predictable and multilateral economic and financial China strategy,” said Shaun Roache, Asia-Pacific chief economist at S&P Global Ratings. However, “the core economic issues at the heart of the tension, especially market access and industrial policies, are likely to remain intractable.”

Asia-Pacific Markets

Asia Pacific markets advanced on Tuesday after stocks rallied on Wall Street as investors bet Pfizer’s coronavirus vaccine will help bolster the broader economy and revive cyclical and other hard hit sectors

The Nikkei 225 added 1.08% to 25,108 in early Tuesday trade

Topix 500 added 1.80% to 1,324 in early Tuesday trade

South Korea’s Kospi dropped -0.18% to 2,442 in early Tuesday trade

In Hong Kong, the Hang Seng Index added 1.06% to 26,292 in early Tuesday trade

China’s CSI 300 Index added 0.09% at 4,985 in early Tuesday trade

Hang Seng China Enterprises Index dropped -0.06% to 10,626 in early Tuesday trade

Shanghai Composite Index added 0.17% at 3,379 in early Tuesday trade

Australia’s S&P/ASX 200 added 0.92% to 6,356 in early Tuesday trade

Singapore’s Straits Times Index added 2.88% to 2,684 in early Tuesday trade

Overall, MSCI’s broadest index of Asia-Pacific shares outside Japan, is up 0.43%

On the data front, China’s trade surplus surged to USD 58.44 billion in October from USD 42.3 billion in the same month the previous year with exports jumping by 11.4% while imports rose at a softer 4.7%

China’s annual inflation rate eased to 0.5% in October 2020 from 1.7% in the previous month, below market expectations of 0.8%. It was the lowest reading since October 2009, amid a sharp slowdown in prices of food. Meantime, cost of non-food products was flat for the second month in a row. On a monthly basis, consumer prices unexpectedly fell by 0.3 percent, the first drop in four months.

In Australia, the number of dwellings approved jumped 15.4% month-over-month in September, following a 2.3% fall in the previous month

Softbank’s investment of $1.35 Billion last November in a Beijing-based company called KE Holdings Inc., saw a return of 375% lifting the value of its stake to $6.4 Billion

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.

“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 shares rallied on Monday

Biden administration will bring predictability and stability but with continuing Republican control of the Senate likely, it will be more difficult for the new administration to raise taxes and expand regulation on businesses

The pan-European Stoxx 600 index added 4.19% to 380 on Monday

Stoxx 50 added 6.36% to close at 3,407 on Monday

Germany’s DAX30 added 4.94% to 13,095 on Monday

London’s FTSE 100 added 4.67% to close to 6,186 on Monday

France’s CAC40 added 7.57% to 5,336 on Monday

Denmark’s OMX Copenhagen 20 Index dropped -1.93% to 1,390 on Monday

Luxembourg’s LuxX Index added 4.59% at 1,171 on Monday

Sweden’s OMX Stockholm 30 Index added 3.80% at 1,888 on Monday

Italy’s FTSE MIB Index added 5.43% at 20,750 on Monday

Societe Generale confirmed on Monday it is cutting 640 jobs in France

Meanwhile, Moody’s affirmed Italy’s sovereign credit rating at “Baa3” and maintained a ‘stable’ outlook on Friday

German chipmaker Infineon forecast that revenue would grow by nearly 23% next year as it reported quarterly results that were in line with expectations

Bank of France expects the French economic activity to fall 12% in November due to the new lockdown and shrink 9%—10% in 2020

Oil & Natural Gas Markets

WTI crude futures extended early gains rising more than 10% to trade around $41.1 a barrel on Monday, its highest daily increase in over six months

Brent crude futures extended early gains rising over 10% to trade around $43.4 a barrel on Monday

Supporting prices were recent signals that OPEC is considering a possible extension of oil output restrictions into the first quarter of 2021

Natural gas futures added 0.56% to $2.889/MMBtu on Monday

WTI Crude is trading higher at $39.89 per barrel in early Tuesday trade

Brent Crude is trading higher at $42.09 per barrel in early Tuesday trade

Natural Gas futures is trading lower at $2.866 per mmbtu in early Tuesday trade

On MCX-India, Crude oil futures added 8.5% to 3,001 on Monday’s session

On MCX-India, Natural gas futures dropped -0.88% to 213 on Monday’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 sank near 5% to below $1860 an ounce on Monday amid an increase in investors’ risk appetite

Silver reversed course and sank near 6% to $23.9 an ounce on Monday

Copper futures is steady at $3.1500 per pound on Monday; supported by growing demand from top consumer China and a decline in production in Chile

US Gold futures (Comex) weakened to $1,875.80 an ounce in early Tuesday trade

US Spot Gold strengthened to $1,878.36 an ounce in early Tuesday trade

Silver futures (Comex) weakened to $24.25 an ounce in early Tuesday trade

Copper futures (Comex) weakened to$315.00 per pound in early Tuesday trade

In India, Spot Gold strengthened to INR 49,680 per 10 grams in early Tuesday trade

India – NCDEX Agridex

Agricultural futures index tracking the performance of the 10 liquid commodities, was down -0.80% trading at 1,207.15 ; with major demand seen in Guar Gum and Guar Seed futures on Monday

Currency Markets

The dollar index, DXY, was slightly higher at 92.5 on Monday, but remained close to levels not seen in more than 1 month

On a bigger time-frame, US dollar has weakened since May amid rising levels of debt coupled with expectations for an extended period of low interest rates

INR strengthened 0.08% with USD—INR at 74.1438

JPY weakened -2.01% with USD—JPY at 105.4300

CNY weakened -0.26% with USD—CNY at 6.6295

EUR weakened -0.49% with EUR—USD at 1.1816

GBP weakened -0.08% with GBP—USD at 1.3146

SEK strengthened 0.22% with USD—SEK at 8.6220

*3-Month LIBOR Rate*	*As on 09 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

Bond Markets

Americas : 10-Year Govt Bond Yields

United States : Up 14 basis points at 0.96%
Canada : Up 12 basis points at 0.76%

Europe, Middle East & Africa : 10-Year Govt Bond Yields

Germany : Up 11 basis points at -0.51%
United Kingdom : Up 10 basis point at 0.37%
France : Up 10 basis point at -0.26%
Italy : Up 12 basis points at 0.75%
Spain : Up 9 basis point at 0.18%
Netherlands : Up 10 basis points at -0.42%

Asia Pacific : 10-Year Govt Bond Yields

India : Up 1 basis point at 5.88%
Japan : Unchanged at 0.01%
Australia : Up 2 basis points at 0.76%
Hong Kong : Up 7 basis points at 0.41%
Singapore : Up 1 basis point at 0.78%
South Korea : Unchanged at 1.58%

Fund Flows on NSE, BSE and MSEI — Nov 09 2020 (source NSE)

FII Net Buy Rs 4,548.39 Crore in Cash Market
DII Net Sell Rs (3,036.31) Crore in Cash Market

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