Index Trend & Conditions – 07:30 a.m. I.S.T.
• Resistance zone for Nifty 50 is at 14,830 and 14,930. For Thursday, Mar. 25, Support area is seen around 14,540 14,507 14,450 and 14,338
• Support levels for Bank Nifty is around 32,322; while Resistance zone is at 33,568 33,872 and 34,150 for Mar. 25
• The MSCI Asia Pacific ex-Japan is trading lower -0.32%, and the MSCI Emerging Market index is down -0.46%
• Trends on SGX Nifty look poised to a higher start for Nifty 50 in India. The Nifty futures are trading 47 points, or 0.33% higher at 14,609 on the Singaporean Exchange at 07:30 a.m. I.S.T.
• U.S. equity futures opened mostly higher in early morning trade with S&P 500 and Dow Jones trading in green and Nasdaq futures in red territory; alongside a mixed start in Asia-Pacific benchmarks gauges in early Thursday trade with equities edging higher in Japan, South Korea and Australia; a negative MSCI Asia-Pacific ex-Japan index; U.S. Dollar strengthening to 92.62 with 10-Yr Treasury Yields steady at 1.62% ahead of this Thursday’s 7-Yr Treasury bill offering – a maturity that fared poorly in last month’s auction and Gold futures unchanged at $1,732 an ounce indicate a mixed and volatile outlook in Indian equity markets amid channel-wise resistance
• Indian equity markets are currently witnessing “Sell on Rise” due to climbing daily new Covid cases in India now close to 50,000 cases per day and strengthening U.S. dollar
• The IMF is considering creating up to $650 billion in additional reserve assets to help developing economies cope with the pandemic
India Markets
| NIFTY 50 | OPEN | HIGH | LOW | CLOSE |
|---|---|---|---|---|
| Wednesday | 14,712 | 14,752 | 14,535 | 14,549 |
India’s equity benchmarks slipped on Wednesday trade, below its 50-day exponential moving average (EMA) and also its 10-week amid a major spike on Covid-19 cases in the country and weak global cues
Nifty seems to be moving in a descending channel for the last 25 days after hitting the high of 15,431 levels on Feb. 16
The blue-chip NSE Nifty 50 index dropped 265 points or -1.79% to 14,549 and the benchmark S&P BSE Sensex dropped 871 points or -1.74% to close at 49,180
Broader markets out-performed headline peers — Midcap 100 index dropped -1.99%; Smallcap 250 index dropped -1.90% and Nifty 500 dropped -1.77%
Nifty P/E for Mar. 24 fell to 39.63 from 40.35 with Nifty P/B decreased to 4.12 from 4.20, as recorded by NSE India
Bank Nifty opened with a gap down and continued to show weakness till the end of session towards 33,200 level. The index dropped 891 points, or -2.61%, to settle at 33,293
India VIX or the barometer of nervousness in the market, rose 8.69% from 20.66 to 22.45 level
VIX needs to cool down below 20 level for the bullish grip to continue and smoothen the move in 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 Mar 23
Under Liquidity Operations by RBI, Reverse Repo for the week (Mar 8 to Mar 14) stood below 5 lakh crores, marking lower surplus liquidity in the market compared to 7 lakh crores, 3-months earlier
Yield curve on the benchmark 10-Yr government bond declined to 6.15%, while the rupee weakened marginally to 72.5900 per U.S. dollar
India is set to ease rules to encourage startups to go public and list on the so-called Innovators’ Growth Platform, providing a structured exit route for early-stage investors in new enterprises
Banks may see bad loans rise by Rs 1.3 lakh crore and face an outgo of Rs 7,000-9,000 crore as reimbursement of interest on interest to those with loans outstanding during the moratorium period
The Adani Group inched closer to taking control of Visakhapatnam-based Gangavaram Port, with Adani Port and SEZ inking an agreement with the private port’s promoters to acquire their 58.1% stake for Rs 3,604 crore
Tata Motors’ luxury car unit Jaguar Land Rover plans to launch 10 models in India in the next fiscal year, including electrified vehicles, with an eye on registering double-digit growth after a year of low sales due to the impact of the Covid-19 pandemic
Hero MotoCorp, India’s largest two-wheeler manufacturer, will increase prices next month to offset the impact of rising input costs
“When there is a broader rally in the market, mid- and small-caps tend to do better than largecaps. That is very much possible going forward,” said Hemang Jani, head of equity strategy broking and distribution at Motilal Oswal. “There can be outperformance in the broader market if economic revival continues.”
America Markets
U.S. stocks closed in the red on Wednesday trade amid a sharp decline in tech shares, as the market rotation out of growth names continued
The broad-based S&P 500 lost 21 points, or -0.55%, to 3,889
The Dow Jones Industrial Average, composed mostly of cyclical stocks, fell 3.09 points, or -0.01%, to 32,420
The tech-heavy Nasdaq Composite Index dropped 265 points, or -2.01%, to 12,961
U.S. equity futures opened higher in early Thursday trade. S&P500 futures is up 0.01%; Dow Jones futures is up 0.10% and Nasdaq futures is down -0.23%
10-Yr U.S. Treasury yields, which move inversely to the price, steady at 1.62% in early Thursday ahead of this week’s offerings, which include a seven-year note – a maturity that fared poorly in last month’s auction, with dollar strengthening to 92.62
The Cboe Volatility Index, known as Wall Street’s “fear gauge,” rose 4.43% to 21.20 on Wednesday
On Tuesday, Powell said prices would rise this year as the pandemic recedes and Americans are able to go out and spend, but he played down the risk that this would spur unwanted inflation
The combination of rising global yields and the $1.9 trillion U.S. stimulus has divided market views. As emerging-market currencies depreciate, some fear a repeat of the 2013 taper tantrum. With expectations that U.S. growth for the year will touch 7.7%, others see positive spillovers buoying global growth
U.S. factory activity picked up in early March amid strong growth in new orders, but supply chain disruptions because of the COVID-19 pandemic continued to exert cost pressures for manufacturers, which could keep inflation fears in focus. Data firm IHS Markit said its flash U.S. manufacturing PMI increased to 59 in the first half of this month from a final reading 58.6 in Feb
Growth in the services industry is also gaining traction. The IHS Markit’s flash services sector PMI climbed to 60 this month, the highest since July 2014, from a final reading of 59.8 in February. That likely reflected broader economic re-engagement amid an acceleration in the pace of inoculations
Treasury Secretary Janet Yellen said on Wednesday that U.S. banks look healthy enough to be allowed to pay dividends and repurchase stock
U.S. President Joe Biden next week will travel to Pittsburgh, where he kicked off his presidential campaign in 2019, to unveil a multitrillion-dollar plan to rebuild America’s infrastructure, choosing a backdrop of an American city with a long union history
“As long as we continue to exceed expectations on the economic front, which I think we will, the cyclical trade is still going to have legs,” Brian Nick, chief investment strategist at Nuveen, told Bloomberg.
Asia-Pacific Markets
Asian stocks opened mostly higher in early Thursday trade after global equities dipped and U.S. investors considered which stock market sectors would most benefit from strengthening growth
Japan led gains and Australia also climbed
Japan’s Nikkei 225 added 0.33% to 28,506 and Topix 500 added 1.00% to 1,513
South Korea’s Kospi added 0.14% to 3,000
In Hong Kong, Hang Seng fell -0.89% to 27,651 and Hang Seng China Enterprises dropped -1.76% to 10,654
In China, CSI 300 dropped -0.74% to 4,890 and Shanghai Composite dropped -0.66% to 3,345
Australia’s S&P/ASX 200 added 0.30% to 6,799
China’s local governments had 14.8 trillion yuan ($2.3 trillion) of hidden debt last year, and the figure could climb even further this year, according to a government-linked think tank
Taiwan cuts water supply for chipmakers as drought threatens to dry up reserves
EU Markets
European equities were subdued on Wednesday trade, as concerns about new lockdown measures overshadowed a surprise return to economic growth for the euro zone in March
The pan-European Stoxx Europe 600 dropped -0.19% to 417 and Stoxx 50 added 0.14% to close at 3,832
Germany’s DAX30 dropped -0.35% to 14,610
London’s blue-chip FTSE 100 added 0.20% to 6,712
France’s CAC40 added 0.03% to 5,947
Denmark’s OMX Copenhagen 20 dropped -1.48% to 1,416
Spain’s IBEX 35 added 0.64% to 8,443
Italy’s FTSE MIB dropped -0.61% to 24,113
Sweden’s OMX Stockholm 30 added 0.76% to 2,184
German manufacturing increased at a record pace in March, leading an economic revival in Europe that saw French activity stabilize
Euro zone stocks cut losses after IHS Markit’s flash composite PMI, seen as a good guide to economic health, bounced above the 50 mark, separating growth from contraction, to 52.5 this month compared with February’s 48.8, well above forecasts of 49.1
Shares in ASM International, ASML and Infineon Technologies, were up between 0.3% and 5.2% after U.S. firm Intel Corp announced a $20 billion plan to expand its advanced chip manufacturing capacity
Annual inflation rate in the United Kingdom eased to 0.4% in February of 2021 from 0.7% in January, compared to market forecasts of 0.8%. Main downward pressure came from a fall in prices for clothing and footwear (-5.7% vs -3.4% in January, the biggest annual decline since November 2009) and a slowdown in second-hand cars (3.5% vs 7.8%)
The consumer confidence indicator in the Euro Area rose by 4 points to -10.8 in March of 2021, from the previous month’s figure of -14.8 and well above market expectations of -14.5
“The sharp increase in euro zone consumer confidence in March came as a big surprise given tighter restrictions across the bloc and ongoing difficulties with the AstraZeneca vaccine,” said Melanie Debono, Europe economist at Capital Economics.
“We believe this is a pause, not the end of the equity rally yet,” said Michele Morganti, an equity strategist at Generali Insurance Asset Management. “Covid management is a bumpy road. We nevertheless think that recovery will be quite strong in the second half of the year.”
Oil & Natural Gas Markets
Crude-oil prices eased in early Thursday trade, jumping more than 5% on Wednesday after prices hit the lowest since early February a day before, boosted by a U.S. inventory report that showed domestic fuel consumption at the highest in four months
WTI Crude is trading at $60.05 per barrel
Brent Crude, the international benchmark for oil, is trading at $63.37 per barrel
Natural Gas futures is trading lower at $2.521/MMBtu
“We’re recovering some of the sell-off that we’ve had in the past week,” as “hopes of the economic recovery are renewed,” said Gary Cunningham, director at Stamford, Connecticut-based Tradition Energy. “The gasoline demand outlook remains relatively strong” in the U.S.
Commodities Markets
Gold futures edged higher in early Thursday trade, as the safe-haven metal drew support from Federal Reserve Chair Jerome Powell’s repeated calls to keep low-interest rates pinned near zero
Gold unlikely to rise above $1,700 – $1,750 range in the near-term, until growth and inflation likely stalls with investors favoring assets and commodities that track higher inflation
Some investors view gold as a hedge against higher inflation that could follow stimulus measures, but higher Treasury yields have dulled some of the appeal of the non-yielding commodity
U.S. Gold futures (Comex) is trading at $1,734 an ounce
Silver futures (Comex) is trading at $25.08 an ounce
Gold / Silver Ratio rose to $69.05
Copper futures (Comex) rose to $4.0335 per pound
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 $165.85 per tonne
In India, Spot Gold is trading at INR 45,144 per 10 grams
“Should investors see more runway to challenge the Fed’s outlook and push yields higher, that surge is likely to come at the expense of gold’s upside,” said FXTM market analyst Han Tan. “Gold has all to do to break out of its current downward trend, especially with the recovering dollar standing in its way. Spot gold has to first break above its 50-day simple moving average in order to send a favourable signal to bullion bulls.”
“Gold remains pressurized by higher U.S. bond yields, rebound in U.S. dollar and continuing ETF outflows. However, supporting price is Fed’s dovish monetary policy stance, mixed economic data from major economies, renewed virus concerns and increased tensions between US-China and US-Russia,” said Ravindra Rao – Head, Commodity Research – Kotak Securities
Currency Markets
U.S. dollar index, DXY strengthened to a two-week high of 92.62 in early Thursday trade
INR weakened with USD / INR at 72.5900
JPY strengthened with USD / JPY at 108.7400
CNY weakened with USD / CNY at 6.5246
EUR weakened with EUR / USD at 1.1830
GBP weakened with EUR / GBP at 0.8630
GBP weakened with GBP / USD at 1.3708
| 3-Month LIBOR Rate | As on 24 Mar 2021 |
| US DOLLAR | 0.19 per cent |
| Euro | – 0.54 per cent |
| British Pound | 0.08 per cent |
| Swiss Franc | – 0.75 per cent |
| Japanese Yen | – 0.07 per cent |
Bitcoin
Bitcoin / U.S. Dollar fell -0.47% in early Thursday trade to $52,106 as of 07:30 a.m. I.S.T.
Bitcoin is seen by some as an appealing digital alternative to gold, or a potential refuge from inflation due to its limited supply
“Bitcoin is extremely sensitive to increased dollar demand,” BofA strategists said in a note on Wednesday. “We estimate a net inflow into Bitcoin of just $93 million would result in price appreciation of 1%, while the similar figure for gold would be closer to $2 billion or 20 times higher. In contrast, the same analysis for the 20-year-plus Treasuries shows that multibillion money flows do not have a significant impact on price, pointing to the much larger and stable nature of the U.S. Treasuries markets.”
Bond Markets
Americas : 10 – Year Govt Bond Yields
United States : 1.62%
Canada : 1.49%
Europe, Middle East & Africa : 10 – Year Govt Bond Yields
Germany : -0.36%
United Kingdom : 0.76%
France : -0.11%
Italy : 0.59%
Netherlands : -0.22%
Asia Pacific : 10 – Year Govt Bond Yields
India : 6.15%
Japan : 0.06%
Australia : 1.65%
Hong Kong : 1.09%
Singapore : 1.57%
South Korea : 2.00%
Fund Flows on NSE, BSE and MSEI — 24 Mar 2021
FII/FPI Net Sell Rs (1,951.90) Crore in Capital Market
DII Net Buy Rs 612.80 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
