Finance - Stock Market Forecast

Index Trend & Conditions | 08:20 a.m. I.S.T.

• Major Resistance at 12,936 area for Nifty50

• For Friday, Nov 20, Support is seen at 12,688 and 12,746 for Nifty50

• Trends on SGX Nifty indicate a positive outlook for Nifty 50 in India with a 22 points gain. The Nifty futures were trading at 12,796 on the Singaporean Exchange at 08:20 a.m. 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 down -0.28% on the day and a weakening U.S. dollar with falling 10-Year Treasuries indicate a negative-to-stable outlook for Nifty 50 India

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

India Markets

NIFTY 50	OPEN	HIGH	LOW	CLOSE
Thursday	12,839	12,963	12,745	12,771

Nifty opened gap-down on Thursday in line with weak global cues, and as per our forecast was staring at steady-to-positive outlook for the day

However, in the latter part of the session, Nifty failed to hold at higher levels of 12,900 and drifted sharply towards 12,750 level — as 12,820 to 12,900 area was a critical resistance area

The Index dropped 166 points or -1.29% on Thursday to close at 12,771

The index formed a Bearish Candle on the daily scale. Index had previously formed couple of ‘Hanging Man’ patterns signalling correction

PSU Banks, Private Banks and Financial Services stocks saw the maximum correction in Thursday’s session, while Energy and FMCG stocks were in green

Nifty P/E for Nov 19, 2020 is at 35.12 as recorded by NSE India

On the upside, critical resistance around 12,936

On the downside, support is seen at 12,688 and 12,746 for Friday

The S&P BSE Sensex plummeted 580 points or -1.31% to 43,599 as of close on Thursday

Bank Nifty opened gap-down, but recovered its intraday losses to extend its move towards 29,600 mark. Failing to hold at higher levels, it witnessed selling pressure in the latter part of the session. 28,500 is an important psychological level

Bank Nifty dropped 846 points or -2.85% on Thursday to close at 28,903

India VIX moved up 2.35% from 19.12 to 19.57 levels

Broader market indices outperformed their headline peers. Midcap index dropped -0.64% while Smallcap index dropped -0.01%. Nifty 500, the broadest index on NSE, dropped -1.05%

The overnight call money rate weighted average stood at 3.13% according to RBI data. It moved in a range of 1.80 — 3.40% for Nov 18

The yield on the benchmark 10-year government bond was up at 5.964% while the rupee strengthened 0.09% to 74.1780 against the U.S. dollar

“The International Monetary Fund and Group of 20 nations warned that fresh restrictions on households and companies due to the resurgence of Covid-19 are a risk to the global economic recovery.”

America Markets

Wall Street closed in the green on Thursday and recovered from early-session losses

The Dow Jones climbed 44 points or 0.2% to 29,482

The S&P 500 added 14 points or 0.4% to 3,582

The Nasdaq gained 103 points or 0.9% to 11,905

Technology shares led U.S. benchmarks higher Thursday

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%

On the corporate side, shares of Macy’s outperformed after the department store retailer reported a same-store sales decline of more than 20% but posted earnings and revenue that topped expectations

U.S. weekly jobless claims came in higher than forecast

New York City announced it will close schools

“We are expecting tough times in coming months because of the resurgence of cases, but in terms of the longer term recovery path, the vaccine was a very important news milestone,” Melda Mergen, the deputy global head of equities at Columbia Threadneedle Investments, said on Bloomberg TV. “We think that the cyclical recovery is going to come back but there are going to be some bumps along the road.”

“While global economic activity has picked up since June, there are signs that the recovery may be losing momentum, and the crisis is likely to leave deep, unequal scars,” officials at the Washington-based fund said. “Uncertainty and risks are exceptionally high.”

“Billionaire philanthropist Bill Gates highlighted progress being made on coronavirus vaccines and the U.S. pandemic response, saying — the “only thing” the U.S. did well was fund research and development of new medicines from companies around the world. It fell behind in other areas, like getting diagnostic testing out to trace virus cases, he said, calling the country’s failure to control the virus mind-blowing.”

Asia-Pacific Markets

Asian stock markets were mostly lower in early Friday

Japan’s Nikkei 225 dropped -0.66% to 25,465 in early Friday trade

Topix 500 dropped -0.34% to 1,336 in early Friday trade

South Korea’s Kospi added 0.01% to 2,547 in early Friday trade

In Hong Kong, the Hang Seng Index added 0.21% to 26,411 in early Friday trade

China’s CSI 300 Index added 0.05% at 4,930 in early Friday trade

Hang Seng China Enterprises Index dropped -0.08% to 10,546 in early Friday trade

Shanghai Composite Index added 0.01% at 3,363 in early Friday trade

Australia’s S&P/ASX 200 added 0.15% to 6,557 in early Friday trade

Singapore’s Straits Times Index added 0.76% to 2,797 in early Friday trade

Overall, MSCI’s broadest index of Asia-Pacific shares outside Japan, is down -0.28%

The Philippine central bank unexpectedly lowered its benchmark interest rate by 25 bps to 2.0% during its November meeting, defying market expectations of an unchanged rate. The interest rates on the overnight deposit and lending facilities were also reduced to 1.5% and 2.5%, respectively

Logging a daily record of 2,203 coronavirus cases, Tokyo is witnessing a third wave of the pandemic in the country. Prime Minister Yoshihide Suga urged caution saying the country is on maximum alert

“Superlow interest rates in Europe helped China sell its first negative-yielding debt, as it raised €4 billion or $4.7 billion in a three-part deal in euros. The 5-year bonds were priced to yield negative 0.152%, while the 10- and 15-year securities were sold with positive yields of 0.318% and 0.664%, respectively. Investors placed total orders of about €18 billion.
China has become a more active international borrower recently. A month ago, it raised $6 billion by selling new dollar bonds.
Moody’s projects that China’s public-sector debt, including borrowings by governments and state-owned enterprises, will rise to 185% – 190% of gross domestic product in 2020 – 21 from 167% in 2019.”

EU Markets

European equities declined on Thursday as investors weighed the impact of tougher virus restrictions on economic growth

The pan-European Stoxx Europe 600 dropped -0.56% to 387 on Thursday

Stoxx 50 dropped -0.72% to close at 3,457 on Thursday

Germany’s DAX30 dropped -0.52% to 13,132 on Thursday

London’s FTSE 100 dropped -0.91% to close to 6,326 on Thursday

France’s CAC40 dropped -0.55% to 5,480 on Thursday

Denmark’s OMX Copenhagen 20 Index added 0.48% to 1,390 on Thursday

Luxembourg’s LuxX Index dropped -1.31% at 1,227 on Thursday

Sweden’s OMX Stockholm 30 Index dropped -0.28% at 1,917 on Thursday

Italy’s FTSE MIB Index dropped -0.06% at 21,609 on Thursday

In Europe, cyclical shares taking the brunt of the retreat. Norwegian Air Shuttle ASA plunged 12% after seeking protection from creditors

Germany’s Thyssenkrupp AG tumbled after saying it would slash 11,000 jobs amid a cash burn at its steel business

Sweden’s unemployment rate rose to 7.8% in October 2020, from 6.0% in the same period last year

The Eurozone construction output contracted -2.5% from a year earlier in September 2020

Industrial production in Switzerland fell by -5.1% YoY in the third quarter of 2020, following an upwardly revised -9.3% slump in the second quarter

South Australia began one of the world’s toughest lockdowns, with even outdoor exercise and dog-walking banned.

“University of Oxford confirmed that the Covid-19 vaccine it’s developing with AstraZeneca Plc produced strong immune responses in older adults, with key findings from the last phase of tests expected in the coming weeks. Researchers still await late-stage trial results that will show whether the vaccine can meet the high bar set by front-runners Pfizer Inc. and Moderna Inc.”

“There’s plenty of economic stress now as businesses struggle under lockdowns, but scientists are also rapidly advancing several vaccine candidates to get life back to normal.”

Oil & Natural Gas Markets

WTI crude futures were down more than 0.5% to trade around $41.6 a barrel on Thursday

Brent crude futures dropped more than 0.7% to trade around $44 a barrel on Thursday

Natural gas futures weakened to $2.590/MMBtu on Thursday

WTI Crude is trading higher at $41.86 per barrel in early Friday trade

Brent Crude is trading higher at $44.22 per barrel in early Friday trade

Natural Gas futures is trading higher at $2.602/MMBtu in early Friday trade

On MCX-India, Crude oil futures dropped -1.47% to 3,078 on Thursday’s session

On MCX-India, Natural gas futures dropped -3.65% to 195 on Thursday’s session

Gold & Silver Markets (+ copper futures)

Gold futures further weakened to $1,861 an ounce on Thursday

Silver weakened to $23.93 an ounce on Wednesday

Copper futures unchanged at $3.1995 per pound on Thursday

U.S. Gold futures (Comex) weakened to $1,862.60 an ounce in early Friday trade

U.S. Spot Gold weakened to $1,863.64 an ounce in early Friday trade

Silver futures (Comex) weakened to $24.24 an ounce in early Friday trade

Copper futures (Comex) strengthened to $3.2235 per pound in early Friday trade

In India, Spot Gold weakened to INR 49,351 per 10 grams in early Friday trade

India – NCDEX Agridex

Agricultural futures index tracking the performance of the 10 liquid commodities, was up 0.18% trading at 1,216.50 ; with major demand seen for Cotton Seed Oilcake and Castor Seed futures on Thursday

Currency Markets

The dollar index reversed trend and strengthened to 92.6 on Thursday

INR weakened -0.11% with USD — INR at 74.2725

JPY weakened -0.09% with USD — JPY at 103.9100

CNY weakened -0.35% with USD — CNY at 6.5838

EUR weakened -0.16% with EUR — USD at 1.1834

GBP weakened -0.44% with GBP — USD at 1.3215

SEK weakened -0.46% with USD — SEK at 8.6407

*3-Month LIBOR Rate*	*As on 19 Nov 2020*
US DOLLAR	0.23 per cent
Euro	– 0.55 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 : Down 1 basis point at 0.86%
Canada : Down 2 basis points at 0.68%

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

Germany : Down 2 basis point at -0.57%
United Kingdom : Down 1 basis point at 0.32%
France : Down 2 basis points at -0.32%
Italy : Unchanged at 0.64%
Spain : Down 2 basis point at 0.06%
Netherlands : Down 2 basis points at -0.50%

Asia Pacific : 10-Year Govt Bond Yields

India : Unchanged at 5.87%
Japan : Unchanged at 0.01%
Australia : Unchanged at 0.88%
Hong Kong : Down 2 basis points at 0.43%
Singapore : Up 2 basis points at 0.95%
South Korea : Up 1 basis points to 1.63%

Fund Flows on NSE, BSE and MSEI — Nov 19 2020 (source NSE)

FII Net Buy Rs 1,180.61 Crore in Cash Market
DII Net Sell Rs (2,854.94) Crore in Cash Market

Where We’ve Been Reading —