Index Trend & Conditions – 07:00 a.m. I.S.T.
• Resistance for Nifty 50 is at 15,115 and 15,160 zone. For Wednesday, Feb. 24, Support area is seen at 14,644 14,590 and 14,432
• Support levels for Bank Nifty is at 34,810; while Resistance zone is at 35725 36,200 and 37,350 for Feb. 24
• The MSCI Asia Pacific ex-Japan is trading higher 0.16%, and the MSCI Emerging Market index is up 0.21%
• Trends on SGX Nifty look poised for a gap-up opening for Nifty 50 in India. The Nifty futures are trading 93 points, or 0.64% higher at 14,809 on the Singaporean Exchange at 07:00 a.m. I.S.T.
• U.S. equity futures rose in early morning trade with S&P 500, Dow Jones and Nasdaq futures trading in green; alongside a mostly mixed opening in Asia-Pacific benchmarks gauges in early Wednesday trade; a positive MSCI Asia-Pacific ex-Japan index; U.S. Dollar showing weakness at 90.01 with 10-Yr Treasury Yields hovering around 1.35% amid Fed Reserve chief Powell’s reassuring comments on inflation and growth and Gold futures climbing steadily to $1,810 amid a weaker dollar, indicate cautious and volatile outlook for Nifty 50 India
• The dollar continues to wax and wane with U.S. data that have painted a mixed picture of the world’s biggest economy. Weakness in the U.S. employment has been undermining dollar rallies as markets see wavering jobs data reinforcing the Federal Reserve’s commitment to low interest rates
India Markets
| NIFTY 50 | OPEN | HIGH | LOW | CLOSE |
|---|---|---|---|---|
| Tuesday | 14,782 | 14,854 | 14,651 | 14,707 |
India’s equity benchmarks advanced on Tuesday trade, before paring most of the gains and settling in the green
The blue-chip NSE Nifty 50 index added 32 points or 0.22% to 14,707 and the benchmark S&P BSE Sensex added 7 points or 0.01% at 49,751
Nifty 50 eventually ended up forming an Inside Bar pattern on the daily chart. This pattern appeared after a long bearish candle on Monday and Economic Times’ analysts say that 14,600 level may continue to support the index in the next sessions
Broader markets under-performed headline peers — Midcap 100 index added 1.01%; Smallcap 250 index added 0.89% and Nifty 500 added 0.42%
Nifty P/E for Feb 23 increased from 40.05 to 40.14, and Nifty P/B rose from 4.16 to 4.17, as recorded by NSE India
Bank Nifty opened with a gap up, but failed to sustain the opening hurdle at 35,700 level, witnessing selling pressure. The index dropped 140 points, or -0.40%, to settle at 35,116
India VIX or Fear gauge fell -0.95% from 22.47 to 25.22 levels
A higher VIX is keeping the market in roller-coaster mode and limiting the upside
Overnight Call Money rate weighted average stood at 3.23% as per RBI data. It moved in a range of 1.90 — 3.50% for Feb 22
Yield curve on the benchmark 10-year government bond steepened to 6.21%, while the rupee weakened to 72.5340 per U.S. dollar
America Markets
Wall Street’s benchmark indices reversed course on Tuesday trade, after Jerome Powell’s reassuring comments with the S&P 500 and the Dow whipsawing to positive territory by the closing bell in a tug-of-war between stocks that thrived amid lockdowns and those that stand to benefit most from a reopening economy
The broad-based S&P 500 gained 4 points, or 0.13%, to 3,881
The Dow Jones Industrial Average, composed mostly of cyclical stocks, rose 15 points, or 0.05%, to 31,537
The tech-heavy Nasdaq Composite Index dropped 67 points, or -0.5%, to 13,465
U.S. equity futures rose in early Wednesday trade. S&P500 futures is up 0.11%; Dow Jones futures is up 0.05% and Nasdaq futures is up 0.06%
10-yr U.S. Treasury yields, which move inversely to the price, are volatile and hovering around 1.35%, after touching 1.39% in the previous session, with dollar rebounding off from six-week lows but showing weakness at 90.01
The Cboe Volatility Index, known as Wall Street’s “fear gauge,” fell -1.45% to 23.11 on Tuesday
Fed Chair Jerome Powell on Tuesday had a subtle message for U.S. senators evaluating their options. The unemployment rate? Forget it. The Fed only cares about the number of people working and how to get it higher. Inflation? Not a problem anytime soon. The money supply? No longer relevant
The S&P CoreLogic Case-Shiller 20-city home price index in the U.S. jumped 10.1% from a year earlier in December of 2020, following an upwardly revised 9.2% growth in the previous month and slightly above market expectations of 9.9%
“Investors need not doubt that what we are experiencing is a classic cyclical upswing: economic growth contracted last year, the cause of that contraction is now being resolved, and that allows growth (and earnings) to expand, supporting risk assets,” wrote Lauren Goodwin, portfolio strategist at New York Life Investments
Queried by Democratic U.S. Senator Mark Warner about the need to make “a sizeable investment” in U.S. infrastructure, Powell set aside classic concerns of hefty government borrowing driving up prices and responded “this is not a problem for this time as near as I can figure.”
Asia-Pacific Markets
Asian benchmark stocks mostly eked out small gains in early Wednesday trade, as investors mulled comments from Federal Reserve Chairman Jerome Powell on inflation and growth that spurred swings in stocks and bonds Tuesday
Australian and Japanese stocks retreated, while stocks pushed higher in Hong Kong and Korea. Japanese traders return after a holiday
Japan’s Nikkei 225 dropped -0.46% to 30,017 and Topix 500 dropped -0.71% to 1,501
South Korea’s Kospi added 0.30% to 3,079
In Hong Kong, Hang Seng added 0.26% to 30,700 and Hang Seng China Enterprises added 0.27% to 11,936
In China, CSI 300 dropped -0.32% to 5,579 and Shanghai Composite added 0.04% to 3,637
Australia’s S&P/ASX 200 dropped -0.48% to 6,806
“The key drivers of equities may be fading as markets come to terms with the next phase of the recovery,” said Chris Iggo, chief investment officer for core investments at AXA Investment Managers. “I wouldn’t be surprised if market returns are more volatile in the coming months. My approach to fixed income would be to look for opportunities to start to buy the long end again.”
EU Markets
European equities reversed early gains to trade lower on Tuesday trade, as mixed corporate earnings updates overshadowed a boost from strong commodity prices, while British bank HSBC fell after abandoning its long-term profitability targets
The pan-European Stoxx Europe 600 dropped -0.80% to 408 and Stoxx 50 dropped -0.81% to close at 3,669
Germany’s DAX30 dropped -0.96% to 13,816
London’s blue-chip FTSE 100 dropped -0.33% to 6,590
France’s CAC40 dropped -0.21% to 5,755
Denmark’s OMX Copenhagen 20 dropped -2.16% to 1,424
Spain’s IBEX 35 added 1.69% to 8,248
Italy’s FTSE MIB dropped -0.34% to 22,931
New orders for Italy’s industrial goods rose 1.7% from a month earlier in Dec 2020, rebounding from an upwardly revised -1.4% drop in Nov 2020
The unemployment rate in the U.K. increased to 5.1% in the three months to December of 2020 from 5% in the previous period and in line with forecasts. It remains the highest jobless rate since the three months to August 2016
The consumer price inflation rate in the Euro Area was confirmed at 0.9% year-on-year in Jan 2021, the highest since Feb last year, boosted mainly by a jump in cost for services (1.4% vs 0.7% in Dec) and non-energy industrial goods (1.5% vs -0.5%)
“Risk-free overnight indexed swap rates and sovereign yields are particularly important, because they are good early indicators of what happens at downstream stages of monetary policy transmission. Accordingly, the ECB is closely monitoring the evolution of longer-term nominal bond yields,” ECB President Lagarde said in a speech
“Investors are cautiously optimistic about the rise in U.S. bond yields and what that tells us about inflation trajectories, while German shares seem to be weighing on the wider European market as tech stocks weaken further with the DAX being a tech-focussed index,” said Michael Hewson, an analyst at CMC Markets
Oil & Natural Gas Markets
Crude-oil prices retreated from an earlier rally in early Wednesday trade, with investment banks and traders predicting the market can go significantly higher in the months to come
Inventory data from the American Petroleum Institute and from the Energy Department on Wednesday will shed more light on how the Texas freeze disrupted U.S. oil supply last week
WTI Crude is trading higher at $61.27 per barrel
Brent Crude, the international benchmark for oil, is trading higher at $65.11 per barrel
Natural Gas futures rose to $2.921/MMBtu
Commodities Markets
Gold futures steadied after a two-day gain in early Wednesday trade, as investors weighed the prospect of a U.S. stimulus package moving closer to approval
Bullion had rebounded from a decline last week as traders refocus on rising inflation expectations and the potentially massive economic stimulus
U.S. Gold futures (Comex) is trading higher at $1,809 an ounce
Silver futures (Comex) rose to $27.74 an ounce
Gold / Silver Ratio is hovering around $65.10
Copper futures (Comex) advanced to $4.2275 per pound, as tight supplies and bullish sentiment toward base metals continues in a sign of optimism on the global recovery
Citigroup forecasts copper prices will rally to $5 per pound in six to 12 months on a better-than-expected recovery in demand, most notably outside China
SGX Iron-Ore futures rose to $164.65 per tonne
In India, Spot Gold is trading at INR 46,640 per 10 grams
Currency Markets
U.S. dollar index, DXY showed weakness after rebounding off six-week lows in early Wednesday trade, to 90.01 after Jerome Powell’s reassuring comments, while commodity-linked currencies hovered near multi-year highs
INR weakened with USD / INR at 72.5340
JPY weakened with USD / JPY at 105.2500
Japanese yen has been the worst performing major currency of 2021 because rising U.S. Treasury yields can lure investment from Japan
CNY weakened with USD / CNY at 6.4682
EUR weakened with EUR / USD at 1.2141
GBP strengthened with EUR / GBP at 0.8633
GBP strengthened with GBP / USD at 1.4063
| 3-Month LIBOR Rate | As on 23 Feb 2021 |
| US DOLLAR | 0.18 per cent |
| Euro | – 0.55 per cent |
| British Pound | 0.06 per cent |
| Swiss Franc | – 0.76 per cent |
| Japanese Yen | – 0.08 per cent |
Bitcoin
Bitcoin / U.S. Dollar rose 0.92% after falling sharply in early Wednesday trade to $49,347 as of 07:30 a.m. I.S.T.
Bitcoin is extending its drop from a record set on Sunday of $58,354 as investors grow nervous about sky-high valuations
JPMorgan Chase & Co. strategists have warned about Bitcoin’s declining liquidity. Strategist Nikolaos Panigirtzoglou wrote in a note on Friday that liquidity for the digital coin was lower than that for the S&P 500 Index and gold, meaning that even small flows can have a large price impact
Bond Markets
Americas : 10 – Year Govt Bond Yields
United States : 1.35%
Canada : 1.26%
Europe, Middle East & Africa : 10 – Year Govt Bond Yields
Germany : -0.29%
United Kingdom : 0.75%
France : -0.04%
Italy : 0.66%
Netherlands : -0.16%
Asia Pacific : 10 – Year Govt Bond Yields
India : 6.21%
Japan : 0.11%
Australia : 1.56%
Hong Kong : 0.99%
Singapore : 1.27%
South Korea : 1.91%
Fund Flows on NSE, BSE and MSEI — 23 Feb 2021
FII/FPI Net Sell Rs (1,569.04) Crore in Capital Market
DII Net Buy Rs 216.67 Crore in Capital Market
Where We’ve Been Reading —
- Bloomberg
- The Wall Street Journal
- Reuters
- Trading Economics
- Seeking Alpha
- Axios
- Tech Crunch
- NSE Indices India
- Morningstar India
- The Star
- Harvard Business Review
- The Economic Times
