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Stock markets likely to open flat amid mixed global cues

08:55 AM Nov 22, 2021 | FPJ Web Desk

Trends on SGX Nifty indicate a negative opening for the index in India.

Indian markets could open flat following largely positive Asian markets today and despite mixed US markets on Thursday and Friday, said Deepak Jasani, Head-Retail Research, HDFC Securities. Trends on SGX Nifty indicate a negative opening for the index in India.

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Gaurav Udani, CEO & Founder, ThincRedBlu Securities, said, " Nifty is expected to open flat to positive at 17,785, up by 20 points. Nifty has support in 17,650-17,600 range and resistance in 17,900-18,000 range. Overall the bias in Nifty is negative and traders are suggested to avoid taking new long positions and maintaining strict stoploss in their existing long positions."

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Nifty ended lower for the third consecutive session on November 18. At close the Nifty was down 0.75 percent or 134 points at 17,765. For the week the Nifty is down 1.87 percent.

Nifty fell for the third consecutive session. In the process the Nifty logged a first weekly loss in three weeks. While equities still remain attractive due to negative real interest rates, a high equity risk premium and flows looking for real returns, the chart formation over the last few days suggest some more weakness before any reversal is seen. If the support of 17,613 is breached, this downmove can accelerate.

US stock markets close mixed on Friday

US stock indexes ended mixed Friday, with the Dow Jones Industrial Average sliding amid growing concerns over rising cases of COVID-19 in the US and Europe, but the technology-laden Nasdaq Composite ended at a record high as bond yields fell. The Nasdaq Composite Index closed above 16,000 points for the first time on Friday. It wasn’t all good news on the earnings front, however, with the Dow Jones Industrial Average weighed down by a steep loss for Cisco Systems Inc.

The Philadelphia Federal Reserve Bank’s manufacturing index jumped in November to 39 from 23.8. While the Conference Board’s Leading Economic Index jumped 0.9 percent in October and pointed toward a pickup in growth toward the end of 2021.

An announcement of a 20-day nationwide COVID lockdown by the Austrian government spooked stock markets and sparked buying in government safe-haven bonds on Friday.

The real yield on 10-year U.S. Treasury inflation-protected securities, or TIPS, hit an all-time low of (-)1.196 US stock indexes ended mixed Friday, with the Dow Jones Industrial Average sliding amid growing concerns over rising cases of COVID-19 in the US and Europe, but the technology-laden Nasdaq Composite ended at a record high as bond yields fell. The Nasdaq Composite Index closed above 16,000 points for the first time on Friday. An announcement of a 20-day nationwide COVID lockdown by the Austrian government spooked stock markets and sparked buying in government safe-haven bonds on Friday.

China one-year LPR unchanged

China on Monday kept the one-year Loan Prime Rate (LPR) unchanged at 3.85 percent. The five-year LPR was also left steady at 4.65 percent.., based on data going back to 2003, on Nov. 9 and hasn’t moved far off that level since, according to Tradeweb, ending Friday at -1.136%.

Turkey's lira shed another 3.3 percent to above 11 per dollar after the central bank cut rates by 100 basis points to 15 percent, even in the face of inflation near 20% and the Turkish currency hurtling southward.

Highly indebted property developer China Evergrande will likely default because the company has essentially lost its main business, S&P Global Ratings analysts said in a report Thursday. Evergrande was China’s second-largest developer by sales last year. Like many Chinese developers, the company sold apartments to consumers before completion, helping to generate capital for future projects. But that cash flow cycle is running into problems. Despite the company’s ability to sell assets and find ways to make payments in time, “Evergrande’s massive debt will catch up with it,” the S&P report said. “The firm has lost the capacity to sell new homes, which means its main business model is effectively defunct. This makes full repayment of its debts unlikely,” the analysts said.

India growth range expected to be 7%-7.5% in next fiscal year

India's economic advisory council to Prime Minister Narendra Modi expects the country's growth to range between 7 percent and 7.5 percent in the next fiscal year and that the next budget should have a clear roadmap for privatising state-owned assets. The government expects the economy to grow 10.5% in the current fiscal year following a record contraction of 7.3% last year.

Asian stocks trade positive

Asian Stocks were largely in the positive Monday amid concerns about European Covid curbs and the risk of a quicker withdrawal of Federal Reserve stimulus.

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