Finance - Stock Market Forecast

Index Trend & Conditions | 08:10 I.S.T.

• Major Resistance seen at 12,820 — 12,900 area for Nifty50

• For Thursday, Nov 19, Support is seen at 12,660 12,750 and 12,822 for Nifty50

• Trends on SGX Nifty suggest a gap-down start for Nifty 50 in India with a 130 points loss. The Nifty futures were trading at 12,867 on the Singaporean Exchange at 08:10 I.S.T.

• Contracts tied to S&P500, Dow Jones Industrial Average and Nasdaq futures trading in red in early Thursday morning, a weak outlook of Asia-Pacific early morning trade, MSCI APAC ex-Japan up 0.23% on the day and a weakening US dollar with falling 10-Year Treasuries indicate a stable-to-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
Wednesday	12,860	12,948	12,819	12,938

NSE Nifty 50 on Wednesday climbed for the 4th-straight day

The Index advanced 64 points or 0.50% on Wednesday to close at 12,938

The Index closed above the psychologically important mark of—12,900 and formed a bullish candle on the daily chart

Economic Times’ analysts are saying that there are no sell signals on the technical charts and the index has potential to take out the 13,000 level in the short term

FMCG and IT stocks were the weak performers in Wednesday’s session, while Auto and PSU Bank stocks were at the vanguard of the rally

Mahindra & Mahindra and Tata Motors were the top performers, surging nearly 10% each. Bajaj Finserv and Larsen & Toubro were among other top gainers with a 6% rise

Nifty P/E for Nov 18, 2020 is at 35.59 as recorded by NSE India

On the upside, critical resistance around 12,900 area

On the downside, support is seen at 12,660 12,750 and 12,822 for Thursday

The S&P BSE Sensex climbed 227 points or 0.52% to 44,180 as of close on Wednesday

Bank Nifty added 568 points or 1.95% on Wednesday to close at 29,749 due to heavy buying of PSU Bank stocks for their attractive valuations

India VIX dropped -3.45% from 19.80 to 19.12 level

Broader market indices outperformed their headline peers. Midcap index added 1.46% while Smallcap index advanced 0.58%. Nifty 500, the broadest index on NSE, advanced 0.861%

The overnight call money rate weighted average stood at 3.12% according to RBI data. It moved in a range of 1.80 — 3.40% as on Nov 17

The yield on the benchmark 10-year government bond was up at 5.96% while the rupee strengthened 0.40% to 74.17 against the U.S. dollar

On the coronavirus front, confirmed cases in India ticked up to 8.91 million as of Wednesday, with 38,617 new infections, according to government data. Virus-related deaths reached 130,993. India has the second-largest number of cases in the world, behind the U.S., and the third-most deaths, after the U.S. and Brazil

“The market trend is shifting from defensive to growth stocks. FMCG, pharma and IT sectors, which are the best performers of the year, are being shed for sectors like auto and banks. It is anticipated that such stocks will re-rate due to rise of the economy and shift of investors’ money. We feel that a lot is factored in the prices, it is advised to turn a bit cautious, in the short-term,” said Vinod Nair, Head of Research at Geojit Financial Services.

“Morgan Stanley believes that the broader market is likely to outperform large caps in 2021.”
“We add another 100 basis points to financials at the expense of healthcare and also added SBI to our focus list while removing Apollo Hospitals. We are overweight in consumer discretionary, industrials, financials and utilities. We are underweight in technology and energy,” Ridhan Desai and Sheela Rathi of Morgan Stanley said.

America Markets

Wall Street closed in the red on Wednesday with the sell-off accelerating in the final minutes of trading, as a worsening pandemic outweighed positive developments on the coronavirus vaccine front

The Dow Jones lost 346 points or -1.2% to 29,438

The S&P 500 shed 42 points or -1.2% to 3,568

The Nasdaq retreated 98 points or -0.8% to 11,802

Today in the derivatives market, contracts tied to the Dow Jones Industrial Average is down -0.04%, S&P 500 is down -0.05% while Nasdaq 100 futures dropped -0.24%

U.S. FDA issued an emergency use authorization for the first Covid-19 diagnostic kit for self-testing at home — Lucira Health Inc.’s rapid-result All-In-One Test Kit

Pfizer said a final analysis of clinical-trial data showed its vaccine was 95% effective, paving the way for the company to apply for the first U.S. regulatory authorization for a coronavirus shot within days

On the stock front, Morgan Stanley is bullish on Tesla for the 1st-time since 2017, giving Tesla an overweight rating. MS predicts that Elon Musk’s firm is on the verge of a “profound model shift” from selling cars to generating high-margin software and services revenue. The valuation now includes Tesla’s network services, energy storage and insurance businesses

Morgan Stanley has raised price target by 50% to $540, suggesting 22% upside for a stock that has already quintupled this year

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“Markets are bouncing back on Pfizer news that the efficacy is more than 95%,” said Mohit Kumar, a strategist at Jefferies International. “While it doesn’t change the fact that we would have a harsh winter from a pandemic perspective, big-picture wise, the vaccine news is a significant positive.”

“Post the unlock and a positive development on the vaccine front, there is rotational trade and money is flowing out of pharma and IT stocks into the old economy stocks like aviation and auto leading to a rally,” said Aditya Makharia, analyst at HDFC Securities.”

Asia-Pacific Markets

Asian stocks are poised to end their longest winning run on Thursday, as restrictions to curb the coronavirus spread overshadowed progress toward a vaccine

Japan’s Nikkei 225 dropped -0.63% to 25,566 in early Thursday trade

Topix 500 dropped -0.26% to 1,331 in early Thursday trade

South Korea’s Kospi dropped -0.33% to 2,537 in early Thursday trade

In Hong Kong, the Hang Seng Index dropped -0.71% to 26,335 in early Thursday trade

China’s CSI 300 Index dropped -0.01% at 4,891in early Thursday trade

Hang Seng China Enterprises Index dropped -0.93% to 10,541 in early Thursday trade

Shanghai Composite Index dropped -0.24% at 3,339 in early Thursday trade

Australia’s S&P/ASX 200 dropped -0.04% to 6,528 in early Thursday trade

Singapore’s Straits Times Index dropped -0.68% to 2,769 in early Thursday trade

Overall, MSCI’s broadest index of Asia-Pacific shares outside Japan, is up 0.23%

China is placing increased pressure on Australia through trade sanctions and reprisals as it criticizes a raft of Australian policies. Ties between the major trading partners have been strained since 2018 when Canberra barred Huawei Technologies Co. from building its 5G network and introducing anti-foreign interference laws aimed at halting Beijing’s “meddling” in domestic affairs

Also in Australia, employment soared by 178,800 last month, defying economists’ expectations of a 27,500 decline, data from the statistics bureau showed Thursday. The jobless rate edged up to 7% from 6.9% in September as the participation rate jumped almost 1 percentage point to 65.8%.

“Overseas investors purchased $55.4 billion of listed South Korean notes in the year through Nov. 16, according to data from the Financial Supervisory Service. In contrast, they withdrew almost $20 billion from bonds in India, Indonesia and Thailand.
South Korea’s 10-year bonds offer about 1.60%, a hefty premium compared to the sub-zero yields on nearly $17 trillion of debt worldwide. The nation is rated AA by S&P Global Ratings, the third-highest investment grade.”

EU Markets

European stocks edged up higher on Wednesday on signs that scientists are making fast progress toward a coronavirus vaccine

The pan-European Stoxx Europe 600 added 0.36% to 389 on Wednesday

Stoxx 50 added 0.24% to close at 3,476 on Wednesday

Germany’s DAX30 added 0.30% to 13,172 on Wednesday

London’s FTSE 100 added 0.40% to close to 6,390on Wednesday

France’s CAC40 added 0.43% to 6,391 on Wednesday

Denmark’s OMX Copenhagen 20 Index dropped -0.19% to 1,380 on Wednesday

Luxembourg’s LuxX Index dropped -0.25% at 1,234 on Wednesday

Sweden’s OMX Stockholm 30 Index added 0.15% at 1,925 on Tuesday

Italy’s FTSE MIB Index added 0.73% at 21,591 on Wednesday

On the economic data front, new passenger car registrations in the EU slipped back into negative territory in October, as several governments re-imposed restrictions

Britain’s inflation rate came in above market expectations in October, pushed higher by prices for clothing and footwear and food.

French government cut growth forecasts to 6% from 8% in 2021 as the country locked down for a 2nd-time at the end of October

France is far away from deciding to end the lockdown as the coronavirus situation remains serious, French government spokesman Gabriel Attal told reporters

Pressure has been growing on German authorities, which are facing a crunch meeting next week to lay out a long-term plan to fight the pandemic. With restrictions likely to be extended and intensified, public anger and political tensions are rising

“ECB President Lagarde said during an event on Tuesday that an effective coronavirus vaccine will not fundamentally change the central bank’s economic projections, as a medical solution was already factored into forecasts.”

Oil & Natural Gas Markets

WTI crude futures were up more than 1% to trade around $41.9 a barrel on Wednesday

Brent crude futures rose more than 2% to trade around $44.7 a barrel on Wednesday

Natural gas futures strengthened to $2.726/MMBtu on Wednesday

WTI Crude is trading higher at $41.55 per barrel in early Thursday trade

Brent Crude is trading higher at $44.18 per barrel in early Thursday trade

Natural Gas futures is trading higher at $2.715 per mmbtu in early Thursday trade

On MCX-India, Crude oil futures added 2.4% to 3,124 on Wednesday’s session

On MCX-India, Natural gas futures added 1.25% to 202 on Wednesday’s session

Gold & Silver Markets (+ copper futures)

Gold futures further weakened to $1,877 an ounce on Wednesday

Silver weakened to $24.34 an ounce on Wednesday

Copper futures weakened to $3.1995 per pound on Wednesday

U.S. Gold futures (Comex) weakened to $1,869.90 an ounce in early Thursday trade

U.S. Spot Gold weakened to $1,871.29 an ounce in early Thursday trade

Silver futures (Comex) weakened to $24.40 an ounce in early Thursday trade

Copper futures (Comex) strengthened to $321.25 per pound in early Thursday trade

In India, Spot Gold weakened to INR 49,654 per 10 grams in early Thursday trade

India – NCDEX Agridex

Agricultural futures index tracking the performance of the 10 liquid commodities, was up 0.06% trading at 1,215.55 ; with major demand seen in Ref Soy Oil and Castor Seed futures on Wednesday

Currency Markets

The dollar index extended losses during the 3rd-week of November to trade around 92.4 on Wednesday

INR strengthened 0.36% with USD — INR at 74.1925

JPY strengthened 0.45% with USD — JPY at 103.7900

CNY weakened -0.07% with USD — CNY at 6.5611

EUR strengthened 0.04% with EUR — USD at 1.1864

GBP strengthened 0.45% with GBP — USD at 1.3305

SEK strengthened 0.35% with USD — SEK at 8.5993

*3-Month LIBOR Rate*	*As on 18 Nov 2020*
US DOLLAR	0.22 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 1 basis point at 0.86%
Canada : Up 1 basis points at 0.70%

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

Germany : Up 1 basis point at -0.56%
United Kingdom : Up 1 basis point at 0.33%
France : Up 1 basis point at -0.33%
Italy : Unchanged at 0.64%
Spain : Up 1 basis point at 0.08%
Netherlands : Up 1 basis points at -0.48%

Asia Pacific : 10-Year Govt Bond Yields

India : Unchanged at 5.88%
Japan : Unchanged at 0.01%
Australia : Down 7 basis points at 0.88%
Hong Kong : Down 3 basis points at 0.45%
Singapore : Down 2 basis points at 0.93%
South Korea : Down 2 basis points to 1.62%

Fund Flows on NSE, BSE and MSEI — Nov 18 2020 (source NSE)

FII Net Buy Rs 3,071.93 Crore in Cash Market
DII Net Sell Rs (2,789.85) Crore in Cash Market

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