Finance - Stock Market Forecast

Index Trend & Conditions – 07:30 a.m. I.S.T.

• Resistance for Nifty 50 is near 15,425. For Tuesday, Feb. 16, Support area is seen at 15,250 — 15,290

• Support level for Bank Nifty is at 36,220; while Resistance zone is at 37,450 for Feb. 16

• The MSCI Asia Pacific ex-Japan is trading higher 0.67%, and the MSCI Emerging Market index is up 0.51%

• Trends on SGX Nifty look poised for a positive opening for Nifty 50 in India. The Nifty futures are trading 10 points, or 0.07% higher at 15,352 on the Singaporean Exchange at 07:30 a.m. I.S.T.

• U.S. equity futures edged higher in early morning trade with S&P 500 and Dow Jones and Nasdaq futures trading in green; alongside an outperforming start to Asia-Pacific benchmarks gauges in early Tuesday trade amid lunar holidays in Chinese indices; a positive MSCI Asia-Pacific ex-Japan index; U.S. Dollar weakening to below 90.30 with 10-Yr Treasury Yields at 1.24% and Gold futures trading lower at $1,822 on the day indicate positive outlook for Nifty 50 India

• RBI’s message to not allow the 10-year benchmark bond yield to go beyond the 6% mark is underpinning the optimism on the Indian markets, as a lower-bound risk-free rate makes equities appear relatively cheaper till perpetuity

India Markets

NIFTY 50	OPEN	HIGH	LOW	CLOSE
Monday	15,270	15,340	15,243	15,314

India’s equity benchmarks registered their lifetime highs on Monday trade, helped by buying from FPIs

Nifty 50 and Bank Nifty gave a Flag breakout on the daily chart. Flag patterns signify trend reversals or breakouts after a period of consolidation

The blue-chip NSE Nifty 50 index added 151 points or 1.00% to 15,314 and the benchmark S&P BSE Sensex added 609 points or 1.18% at 52,154

Most broader markets under-performed headline peers — Midcap 100 index added 1.31%; Smallcap 250 index added 0.28% and Nifty 500 added 0.99%

Nifty P/E for Feb 15 2021 increased from 41.58 to 41.59, and Nifty P/B increased from 4.30 to 4.34, as recorded by NSE India

Bank Nifty opened with a gap up and rose more than 1,000 points. Banking stocks fuelled the rate-sensitive index and reached the 37,400 mark. The index has added 1,197 points, or 3.32%, to settle at 37,306

India VIX or Fear gauge decreased -2.57% from 22.04 to 21.47 levels. It needs to cool down and hold below 21 level for a continuation in the ongoing momentum

Options data suggested a wider trading range between 14,800 and 15,700 levels, while the immediate range is seen between 15,000 and 15,500 levels

Overnight Call Money rate weighted average stood at 3.31% as per RBI data. It moved in a range of 1.90 — 3.50% for Feb 12

Yield on the benchmark 10-year government bond is at 6.05% (Friday), while the rupee strengthened to 72.6900 per U.S. dollar

Tesla Inc. is closing in on an agreement to make electric vehicles in India for the first time, and has picked Bangalore for its first plant

EVs account for about 5% of China’s annual car sales, compared to less than 1% in India

Size of the luxury car market, where Tesla is currently positioned, in India is minuscule with brands like BMW, Mercedes, Audi and Jaguar Land Rover accounting for just 30,000 to 50,000 sales annually

India also cut the goods and services tax on EVs to 5% from 12%, effective August 2019, much lower than the levies of as much as 28% slapped on other motor vehicles, which have attracted criticism from companies like Toyota Motor Corp

Byju’s, is close to signing a deal to acquire rival Toppr in a transaction valued at roughly $150 million

“Considering the price of a Tesla, Elon Musk probably won’t be able to sell an EV to most of the population in emerging economies,” said Pedro Pacheco, a Munich-based senior research director at Gartner Inc. “However, looking at the size of the population and the potential for economic growth, Tesla will probably target a fast-growing group of affluent individuals that, in absolute terms, compares quite favorably to what we see in many developed countries.”

America Markets

Soybeans are harvested from a field on Hodgen Farm in Roachdale, Indiana, U.S.

Wall Street’s main indexes were closed on Monday trade because of the Presidents Day holiday

U.S. equity futures edged higher in early Tuesday trade. S&P500 futures is up 0.66%; Dow Jones futures is up 0.80% and Nasdaq futures is up 0.61%

10-yr U.S. Treasury yields, which move inversely to the price, climbed to 1.24%, with dollar consolidating below 90.30

Blackouts triggered by frigid weather have spread to more than four million homes and businesses across the central U.S. and extended into Mexico in a deepening energy crisis that’s already crippled the Texas power grid, helping U.S. crude prices to trade above $60 a barrel for the first time in more than a year

Later in the week, all eyes will be on the release of minutes from the U.S. Federal Reserve’s January meeting, where policymakers decided to leave rates unchanged, for hints about the likely direction of monetary policy

U.S. retail sales figures come on Wednesday

Friday will also see major economies, including the United States, release preliminary February purchasing managers’ indexes (PMI)

“We believe investors should prepare for bouts of volatility ahead, but regard them as opportunities rather than threats,” said Mark Haefele, chief investment officer at UBS Global Wealth Management. “We recommend investors stick to their long-term financial plans, and continue to put excess cash to work.”

Asia-Pacific Markets

Asian benchmark stocks extended gains in early Tuesday trade, as investors took comfort in progress on the Covid-19 vaccine rollout

With China and Hong Kong markets closed for the Lunar New Year holiday, Japan’s Nikkei is leading the way, climbing 3.0% to reclaim the 30,000-point level for the first time in more than three decades

Japan’s Nikkei 225 added 1.30% to 30,477 and Topix 500 added 0.81% to 1,535

South Korea’s Kospi added 0.56% to 3,164

In Hong Kong, Hang Seng added 1.71% to 30,684 and Hang Seng China Enterprises added 1.65% to 12,080

In China, CSI 300 and Shanghai Composite are closed for a holiday until Thursday 18th

Australia’s S&P/ASX 200 added 0.58% to 6,908

For the full coronavirus-stricken 2020, Japan’s economy contracted -4.8%, the first annual fall since 2009. But Japan’s Oct-Dec ’20 performance was stronger than U.S. growth of 4% and a -2.8% slump in the euro zone

China’s fourth-quarter current-account figures will be released on Friday. Net foreign exchange settlements data for January will be closely watched after the very strong spike in corporate conversion rates in December

Singapore’s budget on Tuesday is expected to offer more targeted measures to support the economy’s recovery from its worst year since independence, setting up a third straight budget deficit for the traditionally fiscally conservative state

EU Markets

European equities scaled one-year highs on Monday trade, and mining stocks tracked a jump in copper prices as bets of more U.S. stimulus fueled optimism around a faster global economic recovery this year

The pan-European Stoxx Europe 600 added 1.45% to 418 and Stoxx 50 added 1.25% to close at 3,741

Germany’s DAX30 added 0.50% to 14,121

London’s blue-chip FTSE 100 added 2.81% to 6,773

France’s CAC40 added 1.67% to 5,798

Denmark’s OMX Copenhagen 20 added 0.86% to 1,513

Spain’s IBEX 35 added 1.96% to 8,213

Italy’s FTSE MIB added 0.99% to 23,641

A recent Reuters poll found the euro zone economy was in a double-dip recession and that economists now expect GDP to contract -0.80% in the first quarter, reversing an earlier forecast for growth of 0.60%

All eyes on December euro zone industrial production data, and consumer confidence and business activity readings later in the week

Eurozone’s trade surplus widened to EUR 29.2 billion in Dec 2020 from EUR 22.6 billion YoY and above market expectations of EUR 25.3 billion. Exports climbed 2.3% YoY to EUR 190.7 billion, while imports fell -1.3% to EUR 161.5 billion

Eurozone industrial production dropped -1.6% from a month earlier in Dec 2020, ending a seven-month period of growth and compared with market expectations of a -1.0% decrease

“Markets remain target fixated on the Biden stimulus and vaccine rollouts as the magic panacea for the world’s pandemic ills,” said Jeffrey Halley, senior market analyst at OANDA

Oil & Natural Gas Markets

Crude-oil prices breached $60 dollars a barrel and continued to pushed higher in early Tuesday trade, on hopes U.S. stimulus will boost the economy and fuel demand

Prices are also driven by an Arctic blast in the U.S., which has threatened to disrupt crude output by well shutdowns, traffic jams and power outages

WTI Crude is trading higher at $60.05 per barrel

Brent Crude, the international benchmark for oil, is trading higher at $63.40 per barrel

Natural Gas futures advanced to $3.043/MMBtu, a 3-month high, as a frigid airmass plunged much of the central U.S. into deep freeze, boosting heating demand in the residential and commercial sectors

Commodities Markets

Gold futures consolidated around 200-day EMA while Silver continues to push higher in early Tuesday trade, as risk assets are in favor on the back of intensified stimulus hopes

A pick-up in risk appetite may dent gold’s appeal, the threats posed by record-high debt levels should drive prices higher in the long-run

U.S. Gold futures (Comex) is trading lower at $1,822 an ounce

Silver futures (Comex) is pushing higher at $27.70 an ounce

Copper futures (Comex) jumped to their highest since 2012 to $3.8400 per pound, as investors continued their buying spree on concerns over rising inflation and stronger than expected demand in top metals consumer China

SGX Iron-Ore futures weakened to $161.20 per tonne

In India, Spot Gold is trading at INR 47,220 per 10 grams

Currency Markets

U.S. dollar index, DXY remained near two-week lows below 90.30 in early Tuesday trade, as traders took a more cautious view of the pace of the U.S. economy’s rebound

Dollar’s weakness is likely to continue well into 2021 amidst prospects of a strong recovery in the global economy and ultra-easy monetary policy

INR strengthened with USD / INR at 72.6900

JPY weakened with USD / JPY at 105.3500

CNY weakened with USD / CNY at 6.4582

EUR strengthened with EUR / USD at 1.2128

GBP strengthened with EUR / GBP at 0.8720

GBP strengthened with GBP / USD at 1.3909

Pound strengthened after the U.K. recorded 15 million vaccinations against coronavirus

*3-Month LIBOR Rate*	*As on 15 Feb 2021*
US DOLLAR	0.20 per cent
Euro	– 0.55 per cent
British Pound	0.05 per cent
Swiss Franc	– 0.76 per cent
Japanese Yen	– 0.09 per cent

Bitcoin

Bitcoin / U.S. Dollar added 0.42% in early Tuesday trade to $48,139 as of 07:00 a.m. I.S.T.

Bitcoin has been buoyed in recent months by endorsements from the likes of Paul Tudor Jones and Stan Druckenmiller, Morgan Stanley’s bet on Bitcoin in its $150 billion investment arm, BNY Mellon’s plans to service cryptocurrencies for its clients and Tesla’s investments of $1.5 billion into Bitcoin

Bitcoin reached a new record on Sunday, rising above $49,700 for the first time

“With each major announcement like the one BNY Mellon made, other institutions are spurred to more rapid adoption and deployment of digital assets,” said Patrick Campos, chief strategy officer at Securrency

Bond Markets

Americas : 10 – Year Govt Bond Yields

United States : 1.24%
Canada : 1.03%

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

Germany : -0.38%
United Kingdom : 0.57%
France : -0.16%
Italy : 0.52%
Netherlands : -0.26%

Asia Pacific : 10 – Year Govt Bond Yields

India : 6.05%
Japan : 0.07%
Australia : 1.32%
Hong Kong : 0.70%
Singapore : 1.07%
South Korea : 1.86%

Fund Flows on NSE, BSE and MSEI — 15 Feb 2021

FII/FPI Net Buy Rs 1,234.15 Crore in Capital Market

DII Net Sell Rs (1,048.55) Crore in Capital Market

Where We’ve Been Reading —