Index Trend & Conditions – 08:00 a.m. I.S.T.
• Major Resistance for Nifty 50 is seen at 14,878. For Thursday, Feb. 04, Support area will be at 14,750 14,645 and 14,530
• Support zone for Bank Nifty is at 34,170 and 33,800 for Feb. 04
• The MSCI Asia Pacific ex-Japan is trading lower -0.31%, and the MSCI Emerging Market index is down -0.27%
• Trends on SGX Nifty looked poised for a gap-up opening and a modestly firmer start for Nifty 50 in India. The Nifty futures are trading 32 points, or 0.20% higher at 14,856 on the Singaporean Exchange at 08:00 a.m. I.S.T.
• U.S. equity futures rose in early morning trade with Nasdaq, S&P 500 futures and Dow Jones futures trading in green; alongside a mostly retreating start to Asia-Pacific early Thursday trade with stocks falling in Japan, South Korea, China, Australia and rising in Hong Kong; a negative MSCI Asia-Pacific ex-Japan index; U.S. Dollar climbing to 91.12 with 10-Year Treasury Yield paring overnight gains to 1.14% and Gold futures extending its declines at $1,825 on the day indicate a stable-to-positive outlook for Nifty 50 India
• Arindrajit Dube, an economist at the University of Massachusetts, has found that even substantial increases in minimum wages don’t destroy jobs
• Caution continues to dominate sentiment despite positive corporate earnings and firm signs of economic recovery
India Markets
| NIFTY 50 | OPEN | HIGH | LOW | CLOSE |
|---|---|---|---|---|
| Wednesday | 14,754 | 14,868 | 14,574 | 14,789 |
India’s equity benchmarks extended their post-Budget rally for the third consecutive session on Wednesday trade, as risk appetite among investors remained strong amid optimism for strong domestic and global economic recovery and Morgan Stanley’s bullish stance on Indian equities
The blue-chip NSE Nifty 50 index added 142 points, or 0.97%, to 14,789 and the benchmark S&P BSE Sensex added 458 points, or 0.92%, to 50,255
Nifty Pharma closed as the best sectoral performer on the NSE. The gains in the sector were led by Divi’s Laboratories, Sun Pharmaceutical Industries, Dr Reddy’s Laboratories and Cipla
Broader markets out-performed headline peers — Midcap 100 index added 1.45% ; Smallcap 250 index added 1.42% and Nifty 500 added 1.00%
Nifty P/E for Feb 03, 2020 increased from 38.79 to 39.16, and Nifty P/B edged higher from 4.15 to 4.19, as recorded by NSE India
Bank Nifty opened with a gap up and continued its northward journey to touch 34,908 level. Banking stocks soared higher and held the rate-sensitive index at higher levels. The index sustained well above its breakout range, adding 490 points, or 1.43%, to 34,758
India VIX or Fear gauge rose 1.74% from 23.34 to 23.74 levels. It needs to cool down and hold below 20 level for a continuation in the ongoing momentum
Overnight Call Money rate weighted average stood at 3.20% as per RBI data. It moved in a range of 1.90 — 3.55% for Feb 02
Yield on the benchmark 10-year government bond stayed elevated at 6.16%, as bonds tumbled due to high borrowing plans, while the rupee strengthened to 72.8590 per U.S. dollar
IHS Markit India Manufacturing PMI increased to a three-month high of 57.7 in Jan. 2021 from 56.4 in the previous month and above market consensus of 56
Output growth accelerated to the fastest pace since last October while new orders rose at the quickest in three months. On the price front, input cost inflation accelerated to a 28-month high. As a result, output charges rose to the fastest pace in over a year. Finally, business confidence improved on the back of vaccine rollout, increased marketing budgets and projects in the pipeline
Bharti Airtel Ltd.’s board approved raising as much as 7,500 crore rupees ($1 billion), as it looks to stock up funds to win airwaves at a local spectrum auction in March 2021 and roll out 5G services nationwide once it receives government approvals
“Enhanced farm loans are expected to give a boost to the rural economy,” said Anand Ramanathan, a partner at Deloitte India. “This will not only help address issues related to low productivity in agriculture, but also have a ripple effect on other sectors such as agri-equipment manufacturers, agro-logistics and input providers.”
America Markets
U.S. stocks held modest gains on Wednesday trade
The broad-based S&P 500 climbed 3.86 points, or 0.1%, to 3,830
The Dow Jones Industrial Average, composed mostly of cyclical stocks, rose 36 points, or 0.1%, to 30,723
The tech-heavy Nasdaq Composite Index fell 2.23 points, or less than 0.1%, to 13,610
U.S. equity futures rose in early Thursday trade. S&P500 futures is up 0.21%; Dow Jones futures is up 0.15% and Nasdaq futures is up 0.37%
10-year U.S. Treasury yields edged higher to 1.14% on the day as dollar gained to 91.12
The Cboe Volatility Index, known as Wall Street’s “fear gauge,” fell -10.37% to 22.91 on Wednesday
Bank of America Corp. said on Wednesday that it would invest $15 billion in affordable housing initiatives over the next five years, tripling its commitment as a booming mortgage market caused it to hit its prior goal early
The Institute for Supply Management’s Services PMI for the U.S. increased to 58.7 in January from 57.7 in December, beating market forecasts of 56.8. The reading pointed to the strongest expansion in the services sector since February of 2019 as new orders increased faster and employment rebounded
U.S. economy is showing some scattered signs of picking up from an end-of-year slowdown, muddying President Joe Biden’s efforts to win congressional passage of a $1.9 trillion stimulus package
Mortgage applications in the U.S. jumped 8.1% in the week ended Jan. 29, after falling in each of the previous two weeks, as per data from the Mortgage Bankers Association
Private businesses hired 174K workers in Jan. 2021, beating market forecasts of an increase of 49K, and recovering from a downwardly revised 78K decline in the previous month
“Earnings have been definitely quite a bit stronger than anyone expected, and they are led by the areas that we have so far seen strength in: the tech sector, the stay-at-home sector,” said Matt Forester, chief investment officer of BNY Mellon’s Lockwood Advisors. “We still have a lot to see, though, particularly in the sectors that have been so heavily impacted by Covid.”
Asia-Pacific Markets
Asian benchmark stocks retreated in early Thursday trade, fading a three-day rally in global stocks
Equities rose in Kong Kong while falling in Japan, South Korea, China and Australia
Japan’s Nikkei 225 dropped -0.42% to 28,530 and Topix 500 dropped -0.02% to 1,455
South Korea’s Kospi dropped -0.75% to 3,107
In Hong Kong, Hang Seng added 0.21% to 29,369 while Hang Seng China Enterprises added 0.02% to 11,654
In China, CSI 300 dropped -0.08% to 5,480 and Shanghai Composite added 0.12% to 3,521
Australia’s S&P/ASX 200 dropped -0.69% to 6,777
China’s Lenovo Group, the world’s biggest maker of personal computers, posted record profit and revenue in the third quarter on Wednesday, helped by robust demand from people working from home. Net profit jumped by 53% to a record $395 million, with revenue reaching $17.25 billion during the period
Ant Group Co. and Chinese regulators have agreed on a restructuring plan that will turn the fintech into a financial holding company, making it subject to capital requirements similar to those for banks
Tesla Inc. will start making superchargers in a newly built plant in Shanghai, the American electric automobile maker said in a statement on Wednesday
EU Markets
European equities rose for the third session on Wednesday trade, as focus remained on a busy day of earnings, with positive sentiment spilling over from Asian markets on hopes of a faster global economic recovery
The pan-European Stoxx Europe 600 added 0.40% to 406 and Stoxx 50 added 0.54% to close at 3,610
Germany’s DAX30 added 0.89% to 13,959
London’s blue-chip FTSE 100 fell -0.15% to 6,506
France’s CAC40 fell -0.05% to 5,560
Denmark’s OMX Copenhagen 20 added 1.00% to 1,479
Spain’s IBEX 35 added 0.73% to 8,008
Italy’s FTSE MIB outperformed, adding 2.07% to 22,523, after Services PMI figures surprised on the positive side and after former ECB President Mario Draghi was asked to form a new government
Swedish truckmaker AB Volvo rose 0.7% after reporting fourth-quarter core earnings above expectations, raising its forecasts for some of its main markets and rolling out a hefty shareholder payout. Novo Nordisk added 3.2% after the diabetes drug maker gave upbeat sales and profit forecasts for 2021. Siemens rose 1.8% as the German engineering company raised its 2021 outlook after beating Q1 expectations
Annual inflation rate in the Euro Area jumped to 0.9% in Jan. 2021, the highest rate since Feb. 2020, and ending 5 months of deflation
The Bank of England is not expected to change interest rates or quantitative easing at its meeting on Thursday, but sterling will be closely watched as investors try to measure the likelihood of negative interest rates
“Markets are inclined to look through a difficult situation and climb higher on the combination of vaccines, fiscal stimulus and central banks sticking to their very accommodative monetary policies,” Russ Mould, investment director at AJ Bell, said.
Oil & Natural Gas Markets
Crude-oil prices advanced in early Thursday trade, after EIA data showed U.S. oil inventories decreased by 0.994 million barrels last week, the second consecutive week of falls
Last month’s pledge by Saudi Arabian Energy Minister Prince Abdulaziz bin Salman to slash production by a further 1 million barrels a day has buttressed global markets against the latest onslaught from the pandemic
WTI Crude is trading higher at $56.00 per barrel
Brent Crude, the international benchmark for oil, is trading higher at $58.72 per barrel
Natural Gas futures is trading lower at $2.771/MMBtu
“The oil market continues to shake off any fears related to lockdown induced demand destruction as we see evidence that crude supply is shrinking at a faster rate than demand,” TD Securities commodities strategists including Bart Melek said in a note. “Crude oil markets remain in good shape to tighten in 2021, and the latest OPEC data suggest the cartel has been diligent in living up to their deal.”
“There’s a sense that normalcy will occur and it’s looking more certain,” boosting the outlook for oil demand, said Michael Lynch, president of Strategic Energy & Economic Research. Meanwhile, “the Saudi production cuts start today, and people are focused on falling inventories and how the market is tightening.”
Commodities Markets
Gold futures extended its decline in early Thursday trade, hurt by a stronger dollar
U.S. Gold futures (Comex) is trading lower at $1,825 an ounce
Silver futures (Comex) is trading lower at $26.62 an ounce
Copper futures (Comex) rebounded to $3.5650 per pound, after three days of losses, as some bearish investors cancelled their positions, partly because of receding concerns over tight liquidity in top metals consumer China
SGX Iron-Ore futures is trading higher $151.30 per tonne
In India, Spot Gold is trading lower at INR 47,747 per 10 grams
Currency Markets
U.S. dollar index, DXY climbed to 91.12 in early Thursday trade
The long-term outlook remains bearish owing to the risks posed by record-high debt levels
INR strengthened with USD / INR at 72.8590
JPY weakened with USD / JPY at 105.0700
CNY weakened with USD / CNY at 6.4620
EUR weakened with EUR / USD at 1.2021
GBP strengthened with EUR / GBP at 0.8805
GBP weakened with GBP / USD at 1.3653
“The dollar’s recovery was triggered by a rebound in yields and an increase in inflation expectations,” said Junichi Ishikawa, senior foreign exchange strategist at IG Securities.
| 3-Month LIBOR Rate | As on 03 Feb 2021 |
| US DOLLAR | 0.20 per cent |
| Euro | – 0.54 per cent |
| British Pound | 0.04 per cent |
| Swiss Franc | – 0.76 per cent |
| Japanese Yen | – 0.09 per cent |
Bitcoin
Bitcoin / U.S. Dollar added 0.09% in early Thursday trade to $37,732 as of 08:00 a.m. I.S.T.
“Bitcoin is really on the verge of getting broad acceptance by conventional finance people,” Elon Musk said in the social audio app Clubhouse, adding he’s “late to the party.”
Bond Markets
Americas : 10 – Year Govt Bond Yields
United States : 1.14%
Canada : 0.93%
Europe, Middle East & Africa : 10 – Year Govt Bond Yields
Germany : -0.47%
United Kingdom : 0.37%
France : -0.24%
Italy : 0.58%
Netherlands : -0.40%
Asia Pacific : 10 – Year Govt Bond Yields
India : 6.16%
Japan : 0.05%
Australia : 1.17%
Hong Kong : 0.69%
Singapore : 1.07%
South Korea : 1.76%
Fund Flows on NSE, BSE and MSEI — 03 Feb 2021
FII/FPI Net Buy Rs 2,520.92 Crore in Capital Market
DII Net Sell Rs (399.74) Crore in Capital Market
Where We’ve Been Reading —
- Bloomberg
- The Wall Street Journal
- Reuters
- Trading Economics
- Axios
- Tech Crunch
- NSE Indices India
- Morningstar India
- The Star
- The Washington Post
- Harvard Business Review
- Business Standard
- The Economic Times
