Finance - Stock Market Forecast

Index Trend & Conditions – 07:00 a.m. I.S.T.

• Resistance for Nifty 50 is seen at 13,945. For Tuesday, Dec 29, Support area is seen at 13,775 and 13,450

• Support levels for Bank Nifty is at 30,850 and 30,200 with Resistance at 31,351

• The MSCI Asia Pacific ex-Japan added 0.46%, and the MSCI Emerging Market index gained 0.37%

• Trends on SGX Nifty indicate a gap-up opening for Nifty 50 in India. The Nifty futures are trading 0.35% higher at 13,936 on the Singaporean Exchange at 07:00 a.m. I.S.T.

• Contracts tied to U.S. futures pushed higher in early morning trade, with Nasdaq, S&P 500 and Dow Jones futures trading in green, alongside a firmer start to Asia-Pacific early Monday morning trade, a positive MSCI Asia-Pacific ex-Japan index, U.S. Dollar slipped lower at 90.194 with 10-Year Treasury Yield edging higher at 0.941 and Gold futures rising $1,880 on the day indicate a positive outlook for Nifty 50 India

• Trading volumes are likely to remain thin this week, with many investors and traders taking time off in the year-end holiday period

• With the U.S. President Donald Trump clearing the $2.3 trillion pandemic aid and spending package, equity markets, including Indian market, should get a lift amid the year-end holiday mood

India Markets

NIFTY 50	OPEN	HIGH	LOW	CLOSE
Monday	13,815	13,885	13,811	13,873

Indian stocks rose on Monday trade, as inflows from foreign investors headed for a record quarter after U.S. President Donald Trump signed the $2.3 trillion pandemic aid bill

Indian equities have surged as part of a global shift by investors into emerging markets as countries begin rolling out vaccines. The inflows have shown little sign of slowing for the holiday season, as investors poured about $6.5 billion into the market this month, as per Bloomberg data updated through Wednesday. That would be the second-highest monthly total on record

Nifty 50 added 123 points, or 0.90%, to 13,873 while the BSE Sensex advanced 380 points, or 0.81%, to 47,353. Both gauges closed at fresh all-time highs

HDFC Bank Ltd. contributed most to the index advance and jumped 1.2%, while Titan Co. Ltd. was the biggest winner, rising 3.2%

Broader markets out-performed headline peers — Midcap 100 index added 1.19% ; Smallcap 250 index added 1.70% and Nifty 500 added 0.97%

Strategy based indices mostly under-performed benchmark indices — Nifty Alpha 50 added 1.09% and Nifty Alpha Low Volatility 30 added 0.46%

Nifty P/E for Dec 28, 2020 appreciated to 38.15 from 37.81, while Nifty P/B edged higher to 3.93 from 3.89, as recorded by NSE India. Indian equities market may seem overvalued due to high P/E, however the P/B value says otherwise

Bank Nifty opened with a gap up and saw strength build up throughout the day. It continued its rise towards the 30,900 level and saw good momentum in banking stocks. The index formed a bullish candle on the daily scale and continued to form higher highs and lows for the third session. The index added 478 points, or 1.57%, to 30,880

India VIX increased 2.30% to 20.42 from 19.96 levels.

Stability in volatility is supporting the bullish market setup. VIX needs to hold below 19 level to help the bulls continue their grip on the market

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 Dec 24

Yield on the benchmark 10-year government bond declined to 5.936%, while rupee strengthened to 73.5050 against the U.S. dollar

Auto companies to come out with their monthly sales data this week, leaving to movement in individual stocks. After a full recovery in sales in the last couple of months, passenger vehicle makers hope to continue the momentum

RBI will release deposit and loan growth data for the fortnight ended December 18. The central bank will also release forex data for the week ended December 25 on January 1, which may have an impact on currency markets

“Investors should stay focused on quality sectors and stocks, and also watch the trend in foreign investor inflows, which is the main factor of the recent rally,” said Vinod Nair, head of research at Geojit Financial Services Ltd. in Kochi.”

America Markets

U.S.-based Autonomous delivery startup Nuro

U.S. equities joined global gains on Monday trade, after President Donald Trump backed away from earlier threats and signed a coronavirus aid package of combined $2.3 trillion Covid-19 relief and government funding package

The Nasdaq Composite Index added 94 points, or 0.7%, to 12,899

The S&P 500 gained 32 points, or 0.9%, to 3,735

The Dow Jones Industrial Average rose 204 points, or 0.7%, to 30,403

All three indices touched all-time highs following Trump’s surprise approval

Contracts tied to U.S. futures edged up in early Tuesday trade. S&P500 futures is up 0.28%, Dow Jones futures is up 0.31%, and Nasdaq futures is up 0.21%

The yield curve on 10-year U.S. Treasury note steepened to 0.941% in early morning trade, stoked by risk-on sentiment in the wake of the stimulus bill becoming law

Shares of companies focused on e-commerce, online communications and at-home entertainment have been among the best-performing stocks in the market this year

The U.S. Dallas Fed Manufacturing Index in Texas fell to 9.7 in December of 2020 from 12 in November. The reading pointed to the 5th consecutive month of growth in factory activity although it was the second lowest rate in the current sequence of rising activity. Price and wage pressures accelerated in December and the future general business activity index moved down eight points to 17.6

U.S. pending home sales and goods trade balance data are due Wednesday

“The new law is large enough to make a significant difference for individuals,” Dennis DeBusschere, head of portfolio strategy at Evercore ISI, said in a note to clients. “Ignore the noise about the ‘disappointing’ checks and focus on the setup for a robust economic recovery in 2021, particularly in the services sector.”

Asia-Pacific Markets

Disinfecting at the Shanghai Stock Exchange

Asian stock markets opened mostly firmer in early Tuesday trade, as U.S. equities rallied to records after President Donald Trump backed away from earlier threats and signed a coronavirus aid package

Shares gained in Japan and Australia, and fluctuated in South Korea

Japan’s Nikkei 225 added 1.28% to 27,198 and Topix 500 added 0.96% to 1,402

South Korea’s Kospi dropped -0.03% to 2,809

In Hong Kong, Hang Seng added 0.67% to 26,490 while Hang Seng China Enterprises added 0.89% to 10,403

In China, CSI 300 added 0.44% to 5,064 and Shanghai Composite added 0.06% to 3,399

Australia’s S&P/ASX 200 added 0.63% to 6,708

Overall, MSCI Asia-Pacific gained 0.06%

Shares in Tencent and Alibaba rival JD.com Inc. slid roughly 2% in Hong Kong, while food delivery giant Meituan tumbled more than 4% as investors feared antitrust scrutiny will spread and ensnare more of the country’s most powerful corporations

“The Chinese government is putting more pressure or wants to have more control on the tech firms,” Jackson Wong, asset management director at Amber Hill Capital Ltd., said by phone. “There is still very big selling pressure on firms like Alibaba, Tencent or Meituan. These companies have been growing at a pace deemed by Beijing as too fast and have scales that are too big.”

EU Markets

Freight lorries and heavy-goods vehicles parked at Manston Airport near Ramsgate England

European stocks pushed higher on Monday trade, as sentiments in the region was buoyed after the EU began distributing Covid-19 inoculations, just days after the EU reached a post-Brexit trade agreement with the U.K., bringing an end to years of uncertainty about future relations between the two sides

The pan-European Stoxx Europe 600 added 0.99% to 397 and Stoxx 50 added 0.98% to close at 3,578

Germany’s DAX30 added 1.45% to 13,784, highest level since February

London’s FTSE 100 was closed on Monday in observance of the Boxing Day holiday

France’s CAC40 added 1.32% to 5,594, its highest level in over three weeks

Denmark’s OMX Copenhagen 20 added 1.93% to 1,472

Italy’s FTSE MIB added 0.69% to 22,283

European Union kicked off a continent-wide vaccination campaign less than a week after clearing a shot developed by Pfizer Inc. and BioNTech SE. Pfizer is expected to complete distribution of an initial 200 million doses of the Covid-19 vaccine to the EU by September

“One of the big, unanswered questions remains whether those international investors who aggressively sold their U.K. equity exposure following the 2016 referendum will be tempted back to the market, given still-attractive valuations relative to developed-market peers,” said Richard Buxton, head of strategy, U.K. Alpha at Jupiter Asset Management. “The process may be slow with many likely to wait and see how the U.K. fares outside of the EU.”

Oil & Natural Gas Markets

Crude-oil pared an overnight loss in early Tuesday trade as investors focused on looming new supply from OPEC+

WTI Crude is trading unchanged at $47.95 per barrel

Brent Crude is trading unchanged at $51.16 per barrel

Natural Gas futures sank to $2.356/MMBtu, its lowest level since September 25th, on the back of mild temperatures and light heating demand

On MCX-India, Crude oil futures weakened to 3,540 on Monday trade

On MCX-India, Natural gas futures weakened to 168/MMBtu on Monday trade

“There are headwinds for upward price improvement as the market is readying for OPEC to go ahead and put more barrels – 500,000 barrels a day – on the market,” said John Kilduff, a partner at Again Capital LLC

Commodities Markets

Gold advanced in early Tuesday trade, heading for the highest close in six weeks after President Donald Trump signed a $900 billion coronavirus stimulus package, pumping more state funds into the world’s top economy

Bullion is poised for its biggest annual gain in a decade

U.S. Gold futures (Comex) strengthened to $1,880 an ounce

Silver futures (Comex) strengthened to $26.55 an ounce

Copper futures (Comex) strengthened to $3.5865 per pound

In India, Spot Gold strengthened to INR 49,591 per 10 grams

“The economy remains fragile and the post-pandemic recovery will be gradual at best,” Credit Suisse analyst Fahad Tariq said. “We think any near-term pullback in gold prices due to Covid-19 vaccine approvals and rollout is a good entry point.”

India — NCDEX Agridex

Agricultural futures index tracking the performance of the 10 liquid commodities was down 0.11%, trading at 1,151.30 ; with major drag seen for Chana and Cotton Seed Oilcake futures on Monday trade

Currency Markets

The U.S. dollar index, DXY remained under pressure in early Tuesday trade at 90.194, as long-awaited financial aid in the US, Brexit trade deal and prospects of a swift economic recovery in 2021 spooked investors away from safe-haven assets

INR strengthened with USD / INR at 73.5460

JPY weakened with USD / JPY at 103.8500

CNY strengthened with USD / CNY at 6.5371

EUR strengthened with EUR / USD at 1.2220

GBP weakened with EUR / GBP at 0.9083

GBP weakened with GBP / USD at 1.3453

Bitcoin retreated after a rally over the holiday pushed it past $28,000 for the first time

*3-Month LIBOR Rate*	*As on 28 Dec 2020*
U.S. DOLLAR	0.24 per cent
Euro	– 0.56 per cent
British Pound	0.02 per cent
Swiss Franc	– 0.79 per cent
Japanese Yen	– 0.09 per cent