Finance - Stock Market Forecast

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

• Resistance for Nifty 50 is seen at 13,750. For Thursday, Dec 24, Support area is seen at 13,550 13,131 13,050 and 12,950

• Support levels for Bank Nifty is at 28,900 and 28,200 with Major Resistance seen at 30,200

• The MSCI Asia Pacific ex-Japan is trading higher at 0.40%, and the MSCI Emerging Market index is up 0.26%

• Trends on SGX Nifty indicate a positive outlook for Nifty 50 in India. The Nifty futures are trading 0.17% higher at 13,640 on the Singaporean Exchange at 07:30 a.m. I.S.T.

• Contracts tied to U.S. futures rose on the day, with Nasdaq, S&P 500 and Dow Jones futures trading in green, alongside a positive start to Asia-Pacific early Thursday morning trade, a positive MSCI Asia-Pacific ex-Japan index, U.S. Dollar Index retreated to 90.230 levels with 10-Year Treasury Yield edging higher at 0.953 and Gold futures strengthening at $1,877 on the day indicate a stable-to-positive outlook for Nifty 50 India

• The current mood in the market is bracing and non-committal with enormous global liquidity

India Markets

NIFTY 50	OPEN	HIGH	LOW	CLOSE
Wednesday	13,473	13,619	13,432	13,601

Indian stocks rebounded on Wednesday trade, after a sharp sell-off triggered by concerns about a new variant of coronavirus in the U.K.

Nifty 50 added 135 points, or 1.00%, to 13,601 while the BSE Sensex advanced 437 points, or 0.95%, to 46,444

Broader markets under-performed their headline peers — Midcap 100 index added 2.38% ; Smallcap 250 index added 2.85% and Nifty 500 added 1.35%

Strategy based indices majorly out-performed their benchmark indices — Nifty Alpha 50 added 1.58% and Nifty Alpha Low Volatility 30 added 1.95%

Nifty P/E for Dec 22, 2020 appreciated to 37.40 from 37.03, while Nifty P/B edged higher to 3.85 from 3.81, as recorded by NSE India

Bank Nifty opened flattish but continued to move up towards the 30,000 mark. The index formed a bullish candlestick on the daily scale followed by a Dragonfly Doji candle in the previous session. The index added 257 points, or 0.87%, to 29,883

India VIX declined -6.78% to 20.49 from 21.98 levels.

A cooldown in volatility from higher levels has provided support for a decent bounceback move, and now it has to hold below 19 to help the bulls continue their grip on the market

Overnight Call Money rate weighted average stood at 3.26% as per RBI data. It moved in a range of 1.90 — 3.50% for Dec 22

Yield on the benchmark 10-year government bond appreciated to 5.995%, while rupee strengthened to 73.8520 against the U.S. dollar

India’s economic activity showed signs of stabilizing in November

The Markit India Services Purchasing Managers’ Index was at 53.7 last month versus 54.1 in October, with a reading above 50 indicating expansion

Exports lost some momentum last month, declining 8.7% in November from a year ago as trading partners were hit with fresh restrictions amid a second wave of Covid-19 infections

Passenger vehicle sales, a key indicator of demand, rose 4.7% in November from a year ago

Demand for loans picked up from lows seen in October. Central bank data showed credit grew at more than 5.5% in November from a year earlier

Industrial production rose 3.6% in October from a year earlier. Production of capital goods, which had declined for several months in a row, rose 3.3% from a year earlier

“In India, the lifting of lockdown restrictions and a full resumption of intra-state vehicle movement led to a boost in road transport fuel consumption in October, with diesel demand growing more than 7% year-on-year,” said Senthil Kumaran, head of South Asia oil at industry consultant FGE

“We are constructive on the Indian market next year as India is a high beta market in EM,” said Emily Alejos, chief investment officer at Cartica Management in Washington D.C. “We expect all EM to prosper.”

America Markets

U.S. equities edged higher on Wednesday trade, despite a string of data suggesting the economic rebound remains uneven amid the recent surge in coronavirus hospitalizations

The Nasdaq Composite Index fell 36.80 points, or -0.3%, to 12771, after climbing to a new high on Tuesday’s session

The S&P 500 ticked up 2 points, or 0.1%, to 3,690, following three consecutive sessions of declines

The index was led higher by the energy and financial sectors

The Dow Jones Industrial Average rose 114 points, or 0.4%, to 30,129

On the stocks front, Pfizer‘s shares rose about 1% following news that it had reached a deal with the federal government to provide 100 million additional doses of the company’s Covid-19 vaccine

Contracts tied to U.S. futures edged up in early Thursday trade. S&P500 futures is up 0.12%, Dow Jones futures is up 0.16%, and Nasdaq futures is up 0.05%

The yield on 10-year U.S. Treasury note rose to 0.953% on the day

Consumer confidence unexpectedly fell in December, and Personal income for November fell by 1.1%

President Trump’s last-minute demand to increase the size of direct payments to Americans to $2,000 for individuals and $4,000 for couples, from $600 per adult and per child, threw the status of the coronavirus relief package into limbo Wednesday, just days before many crucial support programs expire

Asia-Pacific Markets

Asian stock markets rose in early Thursday trade, as an outline of the post-Brexit trade deal appeared to soothe investor nerves heading into the Christmas holiday period

Shares opened higher in Australia, Japan and South Korea

Japan’s Nikkei 225 added 0.59% to 26,680 and Topix 500 added 0.50% to 1,378

South Korea’s Kospi added 0.91% to 2,784

In Hong Kong, Hang Seng added 0.17% to 26,385 while Hang Seng China Enterprises added 0.09% to 10,492

In China, CSI 300 added 0.03% to 5,008 and Shanghai Composite added 0.02% to 3,383

Australia’s S&P/ASX 200 added 0.52% to 6,677

Overall, MSCI Asia-Pacific, is down -1.24%

Beijing signaled at reducing some stimulus measures as the economy had returned to growth. However, the world bank warned that a premature policy exit or any contraction in fiscal policy could derail the recovery, adding that China should maintain its accommodative monetary policy.

World Bank predicts China will grow by 2% this year and 7.9% in 2021 with next year’s acceleration driven by rising private-sector investment in manufacturing and stronger household spending

China still has room to expand government spending even after their fiscal deficit grew to 5.9% of GDP in the first 11 months of 2020, up from 3.5% last year, as per World Bank report

Exports from China are surging, pushing the country’s trade surplus to a record. The nation’s companies shipped $268 billion of goods in November, a 21% increase year-on-year

Alibaba Group Holding Ltd. sank more than 3% in after-hours U.S. trading after China kicked off an investigation into alleged monopolistic practices at the tech giant

EU Markets

European stocks rose on Tuesday trade, as trade and transport links between the U.K. and its neighbors reopened and Brexit negotiators put the finishing touches to an accord

The pan-European Stoxx Europe 600 added 1.21% to 394 and Stoxx 50 added 1.19% to close at 3,539

Travel firms and automakers led gains, with Daimler AG rising as much as 3.1% on a report the German carmaker is considering an initial public offering of its truck unit

Germany’s DAX30 added 1.26% to 13,587

London’s FTSE 100 added 0.66% to close to 6,495

Pound advanced as Britain and E.U. reach outline of brexit pact – eliciting a cheer across U.K. assets. Analysts say that the currency could rise as high as $1.37 if a deal is finalized

France’s CAC40 added 1.11% to 5,527

Denmark’s OMX Copenhagen 20 dropped -0.54% to 1,444

Italy’s FTSE MIB added 1.31% at 22,130

Swedish overall confidence levels ended a seven-month climb as the nation tightened restrictions to battle a surge in Covid-19 infections

Oil & Natural Gas Markets

Crude-oil prices edged higher in early Thursday trade, after latest data from the Energy Information Administration showed stocks of crude oil in the U.S. dropped by 0.562 million barrels in the week ended December 18th

WTI Crude is trading lower at $48.38 per barrel

Brent Crude is trading lower at $51.44 per barrel

Natural Gas futures plunged to $2.598/MMBtu

On MCX-India, Crude oil futures declined to 3,562 on Wednesday trade

On MCX-India, Natural gas futures climbed to 206/MMBtu on Wednesday trade

“The sentiment in the crude market has switched from a sell all strength to buy the dip,” said Rebecca Babin, a senior equity trader at CIBC Private Wealth Management. “The dollar and shift towards bidding for risky assets such as in the equity markets continue to be the main driver of trading action.”

Commodities Markets

Gold edged higher in early Thursday trade

U.S. Gold futures (Comex) strengthened to $1,874.01 an ounce, the largest fall in more than a week

Silver futures (Comex) strengthened to $25.63 an ounce

Copper futures (Comex) strengthened to $3.5585 per pound

In India, Spot Gold strengthened to INR 49,338 per 10 grams

India — NCDEX Agridex

Agricultural futures index tracking the performance of the 10 liquid commodities, was up trading at 1,153.30 ; with top gains in Refined Soybean Oil, Soy Bean and Cotton Seed Oilcake futures on Wednesday trade

Currency Markets

The U.S. dollar index, DXY stayed lower in early Thursday trade at 90.23 after initial jobless claims came in better than expected

INR strengthened with USD / INR at 73.7700

The rupee has been the worst performer among major Asian currencies this year, declining more than 3% against the U.S. currency amid the Reserve Bank’s dollar purchases. Traders are forecasting that the rupee will appreciate to 72.05 per U.S. dollar by the last quarter of 2021

JPY weakened with USD / JPY at 103.6200

CNY strengthened with USD / CNY at 6.5407

EUR strengthened with EUR / USD at 1.2183

The euro rose above $1.22 for the first time since 2018 in the wake of the better-than-expected numbers

GBP strengthened with EUR / GBP at 0.9022

The pound had slid as Britain and the E.U. rejected U.K.’s last-ditch effort to get a breakthrough on post-Brexit trade deal negotiations amid U.K.’s coronavirus situation worsening

GBP strengthened with GBP / USD at 1.3501

*3-Month LIBOR Rate*	*As on 23 Dec 2020*
US DOLLAR	0.24 per cent
Euro	– 0.57 per cent
British Pound	0.03 per cent
Swiss Franc	– 0.79 per cent
Japanese Yen	– 0.10 per cent