Finance - Stock Market Forecast

Index Trend & Conditions – 07:45 a.m. I.S.T.

• Resistance for Nifty 50 is seen at 14,125 14,190 and 14,275. For Friday, Jan 29, Support area is seen at 13,765 — 13,745

• Support levels for Bank Nifty are at 29,450 and 28,890 with Resistance at 30,750 — 30,870 and 31,535

• The MSCI Asia Pacific ex-Japan is trading higher 0.42%, and the MSCI Emerging Market index is up 0.45%

• Trends on SGX Nifty looked poised for a gap-up opening for Nifty 50 in India. The Nifty futures are trading 119 points, or 0.86% higher at 13,962 on the Singaporean Exchange at 07:45 a.m. I.S.T.

• U.S. equity futures declined in early morning trade with Nasdaq, S&P 500 futures and Dow Jones futures trading in red after the U.S. benchmarks rebounded from their worse loss; alongside a mostly positive start to Asia-Pacific early Friday trade with stocks rising in Hong Kong, China and Australia, falling in South Korea and fluctuating in Japan; a positive MSCI Asia-Pacific ex-Japan index; U.S. Dollar climbing to 90.65 with 10-Year Treasury Yield steady at 1.05% and Gold futures fluctuated between small gain and losses at $1,842 on the day indicate a stable-to-positive outlook for Nifty 50 India

• A surge in volatility due to profit-booking ahead of Union Budget 2021 could keep the market volatile with limited upside potential

India Markets

NIFTY 50	OPEN	HIGH	LOW	CLOSE
Thursday	13,810	13,898	13,713	13,817

India’s equity benchmarks extended their losing streak to the fifth-consecutive session on Thursday trade, as investors turned cold feet ahead of the upcoming Union Budget, while profit booking ahead of the expiry of the January derivative series also weighed

The blue-chip NSE Nifty 50 index dropped 150 points, or -1.07%, to 13,817 and the benchmark S&P BSE Sensex fell 535 points, or -1.13%, to 46,874

Broader markets witnessed less-intense selling pressure, out-performing headline peers — Midcap 100 index dropped -0.59% ; Smallcap 250 index dropped -0.42% and Nifty 500 dropped -0.90%

Strategy based indices under-performed benchmark indices — Nifty Alpha 50 dropped -0.84% and Nifty Alpha Low Volatility 30 dropped -0.46%

Nifty P/E for Jan 28, 2020 decreased from 37.52 to 36.96, and Nifty P/B edged lower from 3.96 to 3.92, as recorded by NSE India

Bank Nifty opened with a gap down and remained consolidative for most part of the session, but witnessed a decent recovery in the second half. The index formed a bullish candle on daily scale, adding 73 points, or 0.24%, to 30,358

India VIX or Fear gauge moved down 0.42% from 24.39 to 24.29 levels

A surge in volatility due to selling pressure ahead of Union Budget 2021 could keep the market volatile with limited upside potential

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 Jan 27

Yield on the benchmark 10-year government bond increased to 5.98%, while the rupee appreciated to 73.0425 per U.S. dollar

India’s federal budget presentation is due on February 1

Indian tycoon Kumar Mangalam Birla’s $46-billion metals-to-telecommunications conglomerate is reviving investments, betting India’s economy will soon bounce back from a recession induced by the pandemic. Pent up demand, low interest rates and expectations of government spending on infrastructure have spurred some private sector investments

Salil Parekh, CEO of Infosys said they will accelerate hiring in the U.S. and Europe, after Trump-era immigration curbs forced the Asian tech-services giant and its rivals to overhaul their traditional reliance on serving global clients with Indian talent

India’s Ministry of Statistics is ramping up use of artificial intelligence for collecting, analyzing and reporting data to better monitor the economy. The measures include a $60 million program with World Bank help using an information portal that collates real-time data

Citigroup and Nomura Holdings economists expect Indian govt to ramp up spending by 9.5%, compared with a 6.6% rise last year in the annual budget, which will be unveiled on February 1

Reliance Industries representatives are meeting with U.S. State Department officials to request a rollback of some of the previous administration’s restrictions against Venezuela’s oil industry. Indian refiner Reliance is seeking to revive oil swaps that which allow companies to receive Venezuelan crude in exchange for supplying diesel, on grounds that diesel is of value to solving humanitarian crisis there such as power generation, public transportation, agriculture and to deliver food and medicine

“Because of the changing landscape, there’s a growing need for more and more data, faster data and also more refined data products,” Statistics Secretary Kshatrapati Shivaji said in an interview. With end-to-end computerization, “this type of automation will enhance the quality, credibility and timeliness of data.”

America Markets

https://images.wsj.net/im-289008?width=1260&size=1.5

U.S. stocks rallied on Thursday trade, after fresh data showed the US economy expanded an annualized 4% in Q4, in line with forecasts and initial claims fell for the second week to a lower-than-expected 847K

The broad-based S&P 500 added 36 points, or 1%, to 3,787

All 11 sectors of the S&P 500 closed higher, despite relinquishing some of their gains from earlier in the session. Financial, industrial and health-care stocks notched the biggest advances

The Dow Jones Industrial Average, composed mostly of cyclical stocks, rose 300 points, or 1%, to 30,603

The tech-heavy Nasdaq Composite Index gained 66 points, or 0.5%, to 13,337

U.S. equity futures declined in early Friday trade after the U.S. gauge rebounded from its worse loss. S&P500 futures is down -0.62%; Dow Jones futures is down -0.35% and Nasdaq futures is down -0.88%

10-year U.S. Treasury yields steady around 1.05% on the day as dollar climbed to 90.65

The Cboe Volatility Index, known as Wall Street’s “fear gauge,” fell -18.81% to 30.21 on Thursday

Applications for U.S. state unemployment benefits fell last week, signaling that job cuts may be easing after rising in December and early January

The U.S. economy expanded an annualized 4% in Q4 2020, slowing from a record 33.4% expansion in Q3. Considering full 2020, the GDP contracted 3.5%, the worst performance since 1946 but slightly less than forecasts of a 3.6% drop. It follows a 2.2% growth in 2019

New home sales in the U.S. increased 1.6% month-over-month to a seasonally adjusted annual rate of 842K in December 2020, below forecasts of 865K. The median sales price was $355,900, higher than $329,500 a year earlier

“While the behavior of some market participants is reminiscent of historical stock market bubbles,” said Mark Haefele, chief investment officer of global wealth management at UBS Group AG , “We don’t believe the market as a whole is in a bubble, as the stocks continue to trade at attractive valuations relative to interest rates and bond yields, which remain subdued.”

Asia-Pacific Markets

Most Asian benchmark stocks edged up in early Friday trade, after their U.S. peers rallied as fears of social-media driven hedge fund selling abated and the U.S. earnings season got off to a strong start

Stocks rose in Hong Kong, China and Australia, fell in South Korea and fluctuated in Japan

Japan’s Nikkei 225 dropped -0.02% to 28,189 and Topix 500 added 0.31% to 1,434

South Korea’s Kospi dropped -0.62% to 3,050

In Hong Kong, Hang Seng added 0.49% to 28,708 while Hang Seng China Enterprises added 0.62% to 11,400

In China, CSI 300 added 0.76% to 5,418 and Shanghai Composite added 0.06% to 3,507

Australia’s S&P/ASX 200 added 0.65% to 6,695

Overall, MSCI Asia-Pacific, is down -1.88%

Chinese Foreign Ministry spokesman Zhao Lijian expressed on Thursday caution about cooperation with the Biden administration on global problems, saying that such action would depend on the state of relations between the two countries. Zhao highlighted climate change as one area where the two countries have broad, common interest and cooperation space

SoftBank Group Corp. is set to price 177 billion yen ($1.7 billion) of debt on Friday. The company will price the hybrid securities at a maturity of 35 years with an option to be called after five years, and a coupon of 3%

“China-U.S. cooperation in specific areas are by no means flowers in the greenhouse,” Chinese Foreign Ministry spokesman Zhao Lijian said. “They are subject to and closely linked with the overall climate of bilateral relations. No one should expect to flagrantly interfere into Chinese internal affairs and harm Chinese interests while asking China to offer its understanding and support in bilateral and global affairs”

EU Markets

European equities reversed some losses on Thursday trade, boosted by a rally in airline companies after American Airlines reported better-than-expected earnings

Also, results from chipmakers STMicroelectronics and Diageo surprised on the upside while a miss from Swatch Group and a revenue drop at EasyJet disappointed

The pan-European Stoxx Europe 600 added 0.15% to 402 and Stoxx 50 added 0.81% to close at 3,564

Germany’s DAX30 added 0.32% to 13,664

London’s blue-chip FTSE 100 dropped -0.57% to 6,531

France’s CAC40 added 1.07% to 5,517

Denmark’s OMX Copenhagen 20 added 0.70% to 1,450

Spain’s IBEX 35 added 1.09% to 7,938

Italy’s FTSE MIB added 1.00% to 21,880

Almost 20% of the U.K. workforce was on furlough leave as a third national lockdown to combat the spread of the coronavirus got under way. The Office for National Statistics data show 17% were reliant on Treasury wage support in early January, the highest proportion since July. The program pays as much as 80% of an employee’s wage if they’re kept on the payroll. The government has committed almost 300 billion pounds ($411 billion) to emergency support for the economy. The hardest-hit sectors are hospitality, restaurants, the arts and leisure, where around half of the workforce on average is furloughed. State-backed loans made to businesses struggling with the pandemic totaled almost 72 billion pounds as of Jan. 24, with the Bounce Back Loan Scheme accounting for more than a half

Germany’s immunization commission recommended that AstraZeneca Plc’s Covid-19 vaccine be authorized only for people between the ages of 18 and 64, saying there was insufficient information on the shot’s effectiveness for people over 65 years old

Novartis AG is in talks to help produce other companies’ Covid-19 vaccines or treatments, potentially adding another pharma giant’s resources to boost supply as fights over access intensify

Oil & Natural Gas Markets

Crude-oil prices were stable in early Friday trade, as concerns that a U.S. stimulus package might hit snags and rising coronavirus cases countered bullish signals from better compliance with a supply cut deal and ongoing vaccine efforts

In India, crude oil imports in December rose to their highest in more than two years as the easing of coronavirus restrictions boosted economic activity

WTI Crude is trading at $52.32 per barrel

Brent Crude is trading at $55.64 per barrel

Natural Gas futures is trading at $2.682/MMBtu

On MCX-India, Crude oil futures declined to 3,827 on Thursday trade

On MCX-India, Natural gas futures declined to 193/MMBtu on Thursday trade

“The physical market appears to be absorbing any material demand softness from lockdowns in stride, for now,” RBC analysts wrote in the report. “However, the physical market is far from tight and additional barrels are not being bid in size, even as the Saudi cut propagates to the consumer base for next month.”

Commodities Markets

Gold futures fluctuated between small gains and losses in early Friday trade

U.S. Gold futures (Comex) is trading at $1,842 an ounce

Silver futures (Comex) is trading lower at $26.16 an ounce

Copper futures (Comex) is trading steady at $3.5720 per pound

SGX Iron-Ore futures fell sharply to $153.15 per tonne

Iron ore futures became slightly bearish on Thursday, logging the biggest percentage loss in four weeks, as weak pre-holiday downstream steel consumption and a government call for less steel output this year weighed on the steelmaking raw material

In India, Spot Gold is trading at INR 48,153 per 10 grams

“While iron ore prices have been volatile lately due to several supply-side disruptions, they are likely to decline to about $125 a ton this year mainly because China is expected to buy less in 2021,” Seshagiri Rao, joint managing director at Mumbai-based JSW Steel Ltd. said.

Currency Markets

The U.S. dollar index, DXY climbed to 90.65 in early Friday trade, looking set for its biggest weekly climb since October

INR weakened with USD / INR at 73.0425

JPY weakened with USD / JPY at 104.3400

CNY strengthened with USD / CNY at 6.4495

EUR strengthened with EUR / USD at 1.2121

Euro extended losses after an ECB official said the central bank has the necessary tools to act on Euro strength and could cut the deposit rate further to keep inflation target

GBP strengthened with EUR / GBP at 0.8836

GBP strengthened with GBP / USD at 1.3719

*3-Month LIBOR Rate*	*As on 28 Jan 2021*
US DOLLAR	0.22 per cent
Euro	– 0.55 per cent
British Pound	0.04 per cent
Swiss Franc	– 0.76 per cent
Japanese Yen	– 0.08 per cent

Bitcoin

Bitcoin / U.S. Dollar rose 2.22% in early Friday trade to $34,238 as of 07:45 a.m. I.S.T.

Bridgewater Associates founder Ray Dalio said Bitcoin is “one hell of an invention” and he’s considering cryptocurrencies as investments for new funds offering clients protection against the debasement of fiat money. Still, he said it was challenging to put a value on digital assets, and that there were risks like hacking and potential for government restrictions to control money supply

“If Bitcoin breaks below and then stays below the 50-day moving average, it should serve as confirmation that the move over the past four months was a speculative blow-off top,” said Michael O’Rourke, chief market strategist at JonesTrading.

Bond Markets

Americas : 10 – Year Govt Bond Yields

United States : 1.05%
Canada : 0.82%

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

Germany : -0.54%
United Kingdom : 0.29%
France : -0.31%
Italy : 0.63%
Netherlands : -0.48%

Asia Pacific : 10 – Year Govt Bond Yields

India : 5.98%
Japan : 0.03%
Australia : 1.08%
Hong Kong : 0.49%
Singapore : 0.98%
South Korea : 1.77%

Fund Flows on NSE, BSE and MSEI — 28 Jan 2021

FII/FPI Net Sell Rs (3,712.51) Crore in Capital Market

DII Net Buy Rs 1,736.92 Crore in Capital Market

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