Week in a Nutshell January 16th-20th

Technical talks

NIFTY opened the week on 16th January at 18,119 and closed on 20th January at 17,849 above the 20-week simple moving average. The index closed at 17,853 after making a high of 18,183. We expect the recent high of 18,183 to be the key resistance level and the 20 WMA of 17,907 to be the key support level.

During the week, Media (-4.3%), PSU BANK (-1.2%), and AUTO (-1.0%) were the top losers while sectoral gainers were IT (+2.1%), PSE (+1.9%), and ENERGY (+1.1%).

Weekly highlights

  • The Bank of Japan raised its 10-year yield cap to 0.5% from 0.25% during its policy meeting on Tuesday.
  • Retail sales in the United States fell 1.1% in December, following a 1% drop in November, highlighting how inflation and rising interest rates slowed consumer activity. PPI (producers price index) fell more than expected in December due to concerns about a slowdown in the US economy. Weekly jobless claims in the United States fell to a four-month low, indicating that the Federal Reserve will maintain its monetary tightening policy.
  • Companies such as Reliance, HDFC Bank, HUL, and Asian Paints reported 3QFY23 earnings this week. Consumer companies have stated that inflation has slowed since its peak, resulting in increased gross margins. HUL’s license agreement with Unilever expires on January 31, 2023, and the board has approved the contract renewal with a royalty fee increase from 2.65% of total turnover to 3.45% staggered over 5 years is expected to act as an overhang on the margins of the company. PSU banks were in the spotlight after the Bank of India and the Bank of Maharashtra announced strong quarterly results.
  • West Texas Intermediate and Brent Crude sustained its price of around $82 and $88 per barrel this week, up by almost 2.5% and 2% respectively.
  • Microsoft laid off 10,000 workers, accounting for less than 5% of its workforce, in order to cut costs. The Nasdaq and S&P 500 indexes remained relatively stable during the week.
  • The World Economic Forum 2023 got underway in Davos, Switzerland. Wall Street executives, business heads and senior employees, and political leaders gathered to discuss the impact of high inflation and high-interest rates imposed by central banks to combat it. The threat of a recession has caused some large corporations to reduce their spending. The European Central Bank’s president, Christine Lagarde, indicated that the bank would continue to raise interest rates this year, amid an improved economic outlook and historically tight labor market. According to FBI Director Christopher Wray, new technologies such as autonomous vehicles and artificial intelligence are creating new opportunities and new security risks. Other topics will include the cost of living, a labor market, natural disasters, and extreme weather events, the global recession in 2023, the resurgence of COVID infections in many countries, an energy shortage, and the Russia-Ukraine war.
  • During the week, Foreign Institutional Investors (FIIs) sold shares worth ₹ 24,610 mn and Domestic Institutional Investors (DIIs) bought shares worth ₹ 33,840 mn.

Things to watch out for next week

  • As many large cap companies report 3QFY23 results, investors will scrutinise the management commentary. Next week, large-cap banks like ICICI Bank, Kotak Mahindra Bank, and Axis Bank, as well as auto OEMs like TVS Motors, Bajaj Auto, Maruti, and Tata Motors, report earnings.
  • The 3QFY23 earnings season is expected to set market sentiment. Investors will be interested in hearing management comments on the domestic economic recovery and the trajectory of future earnings growth.
  • Investors will remain cautious until the Union Budget for FY24 is announced on February 1st. The market’s volatility will be exacerbated by expectations and speculation about budgetary announcements.

 

Disclaimer: “The views expressed are for information purposes only. The information provided herein should not be considered as investment advice or research recommendation. The users should rely on their own research and analysis and should consult their own investment advisors to determine the merit, risks, and suitability of the information provided.”

 

 

Week in a Nutshell January 9th-13th

Technical talks

NIFTY opened the week on 9th January at 18,130 and closed on 13th January at 17,952 above the 20-week simple moving average. The index closed at 17,956 after making a high of 18,141. We expect the recent high of 18,141 to be the key resistance level and the 20 WMA of 17,883 to be the key support level.

During the week, IT (+3.5%), AUTO (1.6%) and MEDIA (1.3%) were the top gainers while FMCG (-1%), was the only loser.

Weekly highlights

  • According to the World Bank’s most recent economic analysis, India’s economic growth rate is expected to drop from an anticipated 6.9 per cent in 2022–2023 to 6.6 per cent in the following fiscal year. Of the seven largest emerging-market and developing economies, India is predicted to increase its economy at the fastest rate. The slowdown in the global economy and rising uncertainty are expected to weigh on export and investment growth
  • In December, the Consumer Price Index (CPI) decreased to 5.72% as compared to 5.8% in November and 6.7% in October 2022, respectively. The softness in the vegetables and food inflation are the main causes of the drop. But the core inflation is a cause of concern as it has remained above the 6% mark. Food inflation, which makes up roughly 40% of the inflation basket, was 4.2% in December as opposed to 4.7% in November.
  • During the week, IT large caps- TCS, Infosys, HCL Tech and Wipro released their 3QFY23 earnings. These companies have guided about a slowdown in IT spending in BFSI, Hi-Tech, Telecom and Retail segments. Lower levels of attrition, improved utilization and lower subcontracting costs are expected to drive margin expansion.
  • At the Auto Expo that took place in Delhi, EVs and EV-related components and alternate fuel technologies across PVs, CVs and 2Ws seemed to be the key focus areas. Maruti Suzuki launched Jimny and Baleno crossover Fronx. Apart from that EVX concept car revealed, 60kWh battery pack offering 550km of driving range. Tata Motors displayed a range of models including Sierra EV, Avinya Gen 3 EV, Harrier EV and some variants of existing models. On the CV side, Ashok Leyland, VECV and Tata Motors displayed a few products with a special focus on alternative fuel technologies, including EVs, flex fuel, hydrogen fuel cells, hydrogen-ICE, CNG-LNG, etc.
  • West Texas Intermediate sustained its price of around $79 per barrel this week, up by almost 7%. The benchmark for Brent is expected to have its strongest week since October. Following the removal of the country’s Covid Zero policy, China is ramping up its imports of oil after Beijing issued a new round of import allowances. This year, consumption is expected to reach a record high.
  • The US consumer price index fell 0.1% from November, bringing the annual change to 6.5%. The ‘core’ CPI (excluding food and energy) rose another 0.3% in December, accelerating slightly from November and leaving the annual core rate up 5.7%. When it meets again at the end of the month, the central bank is anticipated to increase its benchmark rate by at least a quarter per cent.
  • US indices Nasdaq and S&P 500 rallied during the week in anticipation of favourable CPI data. The indices rose after being on a declining trend for weeks due to concerns regarding recessionary pressures.
  • During the week, Foreign Institutional Investors (FIIs) sold shares worth ₹ 96,056 mn and Domestic Institutional Investors (DIIs) bought shares worth ₹ 100,420 mn.

Things to watch out for next week

  • HDFC Bank’s earnings release and management commentary on 14th January will set the tone for banking stocks in the next week. FMCG giant Hindustan Unilever, Asian Paints and large-cap banks like ICICI Bank and Kotak Mahindra and Reliance Industries are set to release their 3QFY23 earnings next week.
  • The 3QFY23 results season is anticipated to set the market’s sentiment. Investors will look forward to hearing management commentaries about domestic economic recovery and future earnings growth trajectory.
  • Countdown to the Union Budget for FY24 to be announced on 1st February has already begun. Expectations and speculations about the budgetary announcements will add to the market’s volatility.

Disclaimer: “The views expressed are for information purposes only. The information provided herein should not be considered as investment advice or research recommendation. The users should rely on their own research and analysis and should consult their own investment advisors to determine the merit, risks, and suitability of the information provided.”

Week in a Nutshell (January 2-6)

Technical talks

NIFTY opened the week on 2nd January at 18,130 and closed on 6th January at 17,860 near the 20-week simple moving average. The index is now showing some weakness as it closed below 17,900, which is the 100 Day moving average.

Overall, it was a negative week, with only Consumer Durables, FMCG and Pharma gaining 0.5% each and IT, Media and Financial Services lost close to 2% each.

Weekly highlights

  • In the US, the Dow Jones and S&P 500 indices gained 1.5% each.
  • During the weak, Brent oil and WTI Crude oil fell down around 8% due to the estimated lack of demand for oil as covid scare in China goes up.
  • The auto industry posted its highest-ever annual domestic passenger vehicle (PV) sales in 2022 at 3.79 mn units on the back of pent-up demand and better semiconductor chip supply. The figure was 23.1% more than that of 2021. CY22 figure is the highest ever in a calendar year. The previous high was in 2018 with 3.38 mn units sold.
  • Gross goods and services tax (GST) collection for December rang up over ₹ 1.49 tn, the data released by the finance ministry showed. This is a surge of 15% yoy, mainly driven by increase in retail prices of consumption items, high inflation, and action taken to ensure compliance. This was the third-highest monthly collection since the tax was introduced in July 2017.
  • India’s flagship payment platform, the Unified Payments Interface (UPI), ended the 2022 calendar year on a high note as the volume of transactions touched a record 7.82 bn in December, amounting to ₹ 12.82 tn, again a record high. In CY22, UPI processed over 74 bn transactions, worth ₹ 125.94 tn.
  • Public sector Banks have travelled a long distance since 2017 when they posted collective losses to the tune of ₹ 2.07 tn for five straight years to a profit of ₹ 665 bn in FY22.
  • The Indian economy may grow at 7% in FY23, which is higher than projections made by the Reserve Bank of India (RBI) and the World Bank, according to the latest estimates by the National Statistical Office (NSO). The economy grew 9.7% in the first half (April-September) of FY23. The RBI and the World Bank have projected 6.8% and 6.9% GDP growth, respectively, in FY23.
  • During the week, the Foreign Institutional Investors (FIIs) sold shares worth ₹ 78,000 mn and Domestic Institutional Investors (DIIs) bought shares worth ₹ 27,500 mn.

Things to watch out for next week

  • The corporate result season for Oct-Dec 2023 quarter kicks off on Monday with tech giant TCS reporting its result. Market volatility is expected to go up as stock prices will react to companies’ reported results.
  • Countdown to the Union Budget for FY24 to be announced on 1st February has already begun. Expectations and speculations about the budgetary announcements will add to market’s volatility.

 

 

Disclaimer: “The views expressed are for information purposes only. The information provided herein should not be considered as investment advice or research recommendation. The users should rely on their own research and analysis and should consult their own investment advisors to determine the merit, risks, and suitability of the information provided.”

This Week in a Nutshell (19th December – 23rd December)

Technical talks

NIFTY opened the week of 19th December at 18,284 and closed on 23rd December at 17,807. After the rollercoaster ride during the week, NIFTY lost ~2.6% and closed in red for consecutively 3rd week. On the upside 18,041 can be the first target to achieve. On the downside, it can take support at 17,780.

Among the sectoral indices, PSUBANK (-10.3%), MEDIA (-9%), and REALTY (-6.8%) were the top losers during the week while HEALTHCARE (+1.5%) and PHARMA (+1.2) were the only gainers during the week.

Weekly highlights

  • Wall Street also faced huge volatility during the week. The week started low as investors were concerned about the US Fed’s aggressive monetary tightening path and its impact on corporate earnings along with the ongoing fear of another COVID outbreak situation around the world. The S&P 500 and NASDAQ lost ~0.2% and 2.3% respectively and Dow Jones Industrial Average gained ~0.9% during the week.
  • Crude oil prices witnessed a good rally during the week, Brent crude and West Texas Intermediate gained ~6.7% and ~5% respectively and closed the week at USD 84.54/bbl and USD 79.35/bbl respectively. Cold weather is expected in the US, a reduction in the output of Russian oil, and China’s relaxed COVID policy boosted the rally in crude oil prices.
  • On Thursday Reliance Retail Ventures Ltd, a subsidiary of Reliance Industries Ltd. (RIL) Announced they acquired a 100% equity stake in Metro AG’s Indian unit for the cash consideration of Rs 28.5bn. Metro India caters to the kiranas and other small businesses and merchants, with this acquisition RIL is expected to get access to a wide network of outlet, retail, and institutional buyers and better supply channel.
  • On Tuesday SEBI approved the amendment to its buyback regulations and decided to phase out share buyback through the stock exchanges route in a gradual manner by 2025 and until then a separate window will be created on the stock exchanges to conduct such share buyback offer. “The SEBI chairperson said the SEBI has opted the tender offer route for share buyback as the current mode is vulnerable to favouritism.”
  • The minutes of the last MPC meeting were released on Wednesday and the RBI governor said during the MPC meeting, “A premature pause in monetary policy action would be a costly policy error at this juncture.” RBI said that the headline inflation is expected to remain above or close to 6% which is the upper tolerance band in 3QFY23 and 4QFY23 and the inflation is expected to moderate in 1st half of FY24.
  • US weekly jobless claims data shows the number of Americans filing new claims for unemployment benefits increased less than expected last week indicating a tight labor market and the US consumer confidence also jumped to an eight-month high in December 2022 but the recession fears persist.
  • During the week net institutional activity remains positive, Foreign Institutional Investors (FIIs) net sold shares worth Rs 9.8 bn, however, Domestic Institutional Investors (DIIs) net bought shares worth Rs 85.5 bn.

Things to watch out for next week

  • US markets will have a truncated week as markets will be closed on Monday, 26th December on account of Christmas Day. Investors will closely watch the initial jobless claims data. The US markets are likely to be less volatile during the week on account of the holiday season.
  • In India investors will closely watch the weekly forex reserve data next week. Indian markets might face some volatility next week due to fears of a new COVID outbreak and comments on monetary policy from regulators.

Merry Christmas from The Asset Multiplier team! May Peace and Joy fill the coming year!

Disclaimer: “The views expressed are for information purposes only. The information provided herein should not be considered investment advice or research recommendation. The users should rely on their own research and analysis and should consult their own investment advisors to determine the merit, risks, and suitability of the information provided.”

Week in a Nutshell (December 12-16)

Technical talks

NIFTY opened the week on 12th December at 18,400. For the first two days it showed a recovery after falling from the all-time high in the previous week. But the recovery did not sustain and Nifty closed the week in the red at 18,270. The 20WMA of 17,800 may act as a key support level, while the all-time high level of 18,888 may act as key resistance for the index.

Among the sectoral indices, PSU Banks (+0.8%) and Oil & Gas (+0.3%) were the only gainers. Media (-2.2%), Consumer Durables (-2.1%) and FMCG (-1.8%) lost the most.

Weekly highlights

  • The US indices, Dow Jones, Nasdaq and S&P 500 fell around 1.7%-2.7% during the week.
  • Crude oil has been falling for a while now and is trading at USD 74 per barrel.
  • The Union budget for 2023-24 will be announced on 1st February 2023. The policymaking work is ongoing and a government official has hinted that there could be possibility of increasing the tax-free slab to ₹ 5 lakh in the alternative tax regime introduced two years ago.
  • On Wednesday, the US Federal Reserve announced a 50-basis point rate hike in the Fed funds rate. Policymakers projected rates would end next year at 5.1%, according to their median forecast, before being cut to 4.1% in 2024.
  • After regaining control of Air India by the Tata group, it is close to placing landmark orders for as many as 500 jetliners worth tens of billions of dollars from both Airbus and Boeing. The planned order reflects a deliberate strategy to win back a solid share of traffic flows to and from India, which are currently dominated by foreign carriers such as Emirates.
  • On Monday, the National Statistical Office released the data of consumer price index (CPI) inflation for the month of November 2022. It showed that the CPI inflation rate eased below the Reserve Bank of India’s upper tolerance limit of 6%, to 5.88%, in November due to a sharp moderation in food prices. It was 6.77% in October 2022, and 4.91% in November last year.
  • India Inc reported its highest ever mergers and acquisitions in calendar 2022 at USD 171 billion as against deals worth USD 145 billion announced last year. The top deals include merger of HDFC and HDFC Bank, acquisition of Ambuja cements by the Adani group, Biocon acquiring Viatris Biosimilars and a merger of LTI and Mindtree.
  • The buyback tally this year is 2. 6x that of 2021’s. So far this year, 51 companies have announced buybacks worth ₹ 375 bn. By comparison, 42 companies had announced buybacks worth ₹ 143 bn, according to data furnished by PRIME Database. A buyback is one way of returning the excess cash to the shareholders of the company.
  • During the week, Foreign Institutional Investors (FIIs) sold shares worth ₹ 18,300 mn and Domestic Institutional Investors (DIIs) bought shares worth ₹ 34,600 mn.

Things to watch out for the next week

  • The Reserve Bank of India in its bi-monthly monetary policy meeting held on 7th December decided to hike the repo rate by 35 bps to 6.25%. The minutes of that meeting will be published on 21st RBI’s outlook on inflation and GDP forecasts will be keenly watched. The next meeting of the MPC is scheduled during February 6-8, 2023.
  • We are nearing the end of 2023 and we will be celebrating Christmas eve next week. We wish you Merry Christmas!

 

Disclaimer: “The views expressed are for information purposes only. The information provided herein should not be considered as investment advice or research recommendation. The users should rely on their own research and analysis and should consult their own investment advisors to determine the merit, risks, and suitability of the information provided.”

This Week in a nutshell (5th Dec to 9th Dec)

Technical talks

NIFTY opened the week on 5th December at 18,720 and closed on 9th December at 18,497. The index made a weekly loss of 1.1%. The 10WMA of 18,034 may act as a key support level, while 18,721 may act as key resistance for the index.

Among the sectoral indices, PSU BANK (+4.8%), FMCG (+2.2%), and BANK (+1.2%) led the gainers, whereas IT (-6.0%), REALTY (-3.4%), and ENERGY (-2.4%) led the losers.

Weekly highlights

  • US market: Stocks faced a lot of instability as the market believes that the Federal Reserve won’t reduce the pace of hiking the interest rates. US central bankers have signaled a slowdown in the pace of rate hikes though the borrowing costs will keep rising and remain restrictive for some time to beat inflation.
  • Reserve Bank of India (RBI) hiked the repo rate by 35 bps to 6.25%. The RBI also lowered its GDP growth forecast to 6.8% from the earlier 7%. The repo rate hike was made for the fifth time in a row.
  • HDFC Asset Management Company (AMC) promoter abrdn Investment Management intends to sell its entire 10.2% stake in the company. Following the stake sale, abrdn will cease to be a co-sponsor of HDFC Mutual Fund.
  • Royal Enfield’s new assembly facility in Brazil has commenced its operations. It’s a CKD (completely knocked down) plant with an assembly capacity of more than 15,000 units per year. It’s located in Manaus, Brazil, and will cater to the growing demand for the company’s products in Brazil.
  • The Insurance Regulatory and Development Authority of India (IRDAI) has floated a draft on Long-Term Motor Products covering both Motor Third Party Insurance and Own Damage Insurance. The draft proposes to permit all general insurers to offer a 3-year insurance policy in respect of private cars and a 5-year for two-wheelers with motor third-party liability cover.
  • Crude developments: Brent crude prices declined by 10% and closed at USD 77/barrel and later as the world remains concerned about the economic outlook due to curbs in China and concerns over disruptions in US crude flows.
  • Hindustan Unilever Limited (HUL) has announced the acquisition of a 51% stake in Zywie Ventures Private Ltd, which owns the brand OZiva for Rs 2,643 mn, making its entry into the health and wellbeing segment. It has also announced the acquisition of a 19.8% stake in Nutritionalab Pvt Ltd (Wellbeing Nutrition) for Rs 700 mn.
  • The BJP won 156 of 182 total seats in the Gujarat State assembly which led to its election win in Gujarat. It has been the party’s best-ever performance in the state of Gujarat.
  • FII (Foreign Institutional Investors) turned net sellers this week, selling shares worth Rs 43,059 mn.
  • DII (Domestic Institutional Investors) were net buyers, buying shares worth Rs 37,120 mn.

Things to watch out for next week

  • The market movement will continue to be determined by the flow of country-wide as well as global news. The US Fed rate-setting meeting in mid-December is the immediate trigger that will decide the sentiment of investors in the near future.

 

Disclaimer: “The views expressed are for information purposes only. The information provided herein should not be considered as investment advice or research recommendation. The users should rely on their own research and analysis and should consult their own investment advisors to determine the merit, risks, and suitability of the information provided.”

This Week in a nutshell (28th Nov to 2nd December)

Technical talks

NIFTY opened the week on 28th November at 18,430 and closed on 2nd December at 18,696 after making an all-time high of 18,887. The 20WMA of 18,338 may act as a key support level, while 18,885 may act as key resistance for the index.

Among the sectoral indices, Media (+4%), Realty (+4%) and FMCG (+2.4%) were the top gainers while there were no losers in the week.

Weekly highlights

  • Auto companies reported their November sales volume during the week. Post-festive season wholesales in the two-wheeler segment witnessed inventory destocking amid strong retail demand while passenger vehicle segment retails were largely in line with wholesales. Additionally, the size of production of high-end two-wheelers continued to suffer from chip shortages, causing wholesale numbers for November 2022 to decline even more month over month for all.
  • Though inflation has cooled in India, the central bank is expected to raise interest rates by 35 basis points to 6.25% at its December 5-7 policy meeting. Rate increases are anticipated to be driven by two factors: domestic inflation and US rate hikes to avoid pressure on the rupee.
  • Oil experienced its largest weekly increase in a month after a volatile week marked by China lifting covid limitations and speculations over the OPEC+ output strategy. The outlook for energy consumption was aided by the peculation of OPEC+ output cutbacks and the loosening of covid restrictions. Brent crude futures were up 0.4%, at $87.25 per barrel by 1441 GMT. U.S. West Texas Intermediate (WTI) crude futures rose 0.7%, at   $81.77 per barrel.
  • A gauge of food prices used by the UN fell 0.1% last month, reaching its lowest level since January. Wheat and corn prices fell after Ukraine’s grain export agreement was renewed, and food demand is being limited by the possibility of a worldwide recession. Rising food costs have been a significant factor in the global inflationary spiral that is causing a cost of living problem in nations from Malaysia to the UK.
  • U.S. stocks were down on Friday after a better-than-anticipated November jobs data dampened hopes that the Federal Reserve might slow the rate at which it raises interest rates. After Fed Chair Jerome Powell’s remarks about reducing interest rate hikes as early as December, stocks had risen earlier in the week.
  • FII (Foreign Institutional Investors) turned net buyers this week, buying shares worth Rs 1,50,770 mn. The additional 1.15% share in Zomato that Temasek, an investment fund run by the Singaporean government, purchased on November 30 is included in the FII purchases.
  • DII (Domestic Institutional Investors) were net sellers, selling shares worth Rs 13,350 mn.

Things to watch out for next week

The market movement will continue to be determined by the flow of global news. The RBI’s credit policy announcement next week and the US Fed rate-setting meeting in mid-December are the two immediate triggers that will decide the sentiment of investors in the near future.

Disclaimer: “The views expressed are for information purposes only. The information provided herein should not be considered as investment advice or research recommendation. The users should rely on their own research and analysis and should consult their own investment advisors to determine the merit, risks, and suitability of the information provided.”

Week in a Nutshell (21st November – 25th November)

Technical talks

NIFTY opened the week on 21st November at 18,174 and closed at 18,484 on 25th November. The index gained 1.3% during the week. The index’s next support and resistance levels would be 18,400 and 18,600 respectively. The weekly RSI (14) of 65 indicates the index is in the overbought zone.

Among the sectoral indices, MEDIA (+2.5%), REALTY (+1.2%), and AUTO (+0.9%) were the gainers during the week while FMCG (-0.3%), FINANCIAL SERVICES (-0.3%), and BANK (-0.2%) led the losers.

Weekly highlights

  • The US markets had a truncated week as the markets were closed on 24th November due to Thanks Giving and closed early on 25th November due to Black Friday sales. The S&P 500, NASDAQ and Dow Jones Industrial Average gained 1.5%, 0.7%, and 1.7% respectively.
  • Both Brent crude and West Texas Intermediate closed in green at $83.84 and $76.55 per barrel respectively.
  • US Fed’s November 2022 meeting minutes were released, indicating that the rate hikes could moderate due to improved economic data.
  • India and Australia signed a Free Trade Agreement (FTA), which is projected to promote Indian exports to Australia in textiles, jewellery, information technology, steel, and leather areas.
  • Covid instances are on the rise in China, and there are growing fears that the country, which is one of the world’s top consumers, could tighten restrictions following several reported fatalities from the virus.
  • The government has imposed a 10-year term limit for Managing Directors (MD) of state-owned banks, which bodes well for PSBs.
  • During the week Foreign Institutional Investors (FIIs) net sold shares worth Rs 14,790 mn, and Domestic Institutional Investors (DIIs) net bought shares worth Rs 17,810 mn.

Things to watch out for next week

  • US markets will be watching Black Friday sales performance, which is a proxy for the strength of the consumer and retail sectors in the United States. With the Job Openings and Labor Turnover Survey (JOLTS), ADP’s National Employment Data, and the Labor Department’s November nonfarm payrolls report, the labour market will also be in the focus. The Case-Shiller National Home Price Index and Freddie Mac’s House Price Index (HPI) for September will provide the most recent data on home prices. The Bureau of Economic Analysis (BEA) will release its October Personal Consumption Expenditures (PCE) Price Index on Thursday, providing an update on consumer inflation.
  • In India, investors will be watching the 2QFY22 GDP growth rate data, published on November 30th, and the monthly vehicle volume data for November.

Disclaimer: “The views expressed are for information purposes only. The information provided herein should not be considered as investment advice or research recommendation. The users should rely on their own research and analysis and should consult their own investment advisors to determine the merit, risks, and suitability of the information provided.”

Week in a Nutshell (14th November – 18th November)

Technical talks

NIFTY opened the week on 14th November at 18,376 and closed at 18,308 on 18th November. The index lost 0.4% during the week. The index’s next support and resistance levels would be 18,298 and 18,325 respectively. The RSI (14) of 64 indicates the index is in the overbought zone.

Among the sectoral indices, PSU BANK (+2.4%), BANK (+0.7%), and PRIVATE BANK (+0.4%) were the gainers during the week while MEDIA (-5.4%), CONSUMER DURABLES (-3.1%) and AUTO (-2%) led the losers.

Weekly highlights

  • The S&P 500 and NASDAQ ended the week marginally lower and lost 0.8% and 0.5% respectively however Dow Jones Industrial Average closed the week marginally higher with a 0.3% gain. St Louis Fed Reserve President alluded the Fed’s key policy rate will need to be further increased which was a cause of concern for investors. Data showed fewer Americans filed new applications for unemployment benefits last week, suggesting tightness in the labor market. The economy has survived rate hikes, according to a report released on Wednesday that highlighted solid retail sales growth in the previous month.
  • Both Brent crude and West Texas Intermediate closed the week negatively at $87.7 and $80.1 per barrel respectively, brent crude and West Texas Intermediate lost 8% and 10% respectively during the week. On Monday, the Organization of the Petroleum Exporting Countries (OPEC) cut down its global oil demand growth forecast for 2022 for the 5th time and reduced the next year’s outlook due to economic challenges including high inflation and tightening of the monetary policies across the globe. Oil demand is expected to increase by 2.55mn barrels per day (bpd) or 2.6% in 2022 down by 0.1mn bpd from an earlier forecast.
  • India’s retail inflation measured by the Consumer Price Index (CPI) data for the month of October stood at 6.77% vs 7.41% in September-22 and fell to a three-month low, data released on Monday. Despite the easing down, inflation data remains above the RBI’s comfort level of 6% for the 10th consecutive month.
  • India’s Wholesale Price Index (WPI) inflation for the month of October 22 fell to 8.39% vs 10.7% in September 22 and fell to the lowest since March 21. The decline in the rate of WPI inflation was primarily driven by price declines across the commodities.
  • Inflow of inflation data continues during the week, UK and Japan also released their inflation data. UK’s inflation jumped to 11.1% and rose to a 41-year high in October 2022 vs 10.1% in September 2022. Japan’s inflation also hit a 40-year high in October 2022 and stood at 3.6% vs 3% in September 2022.
  • India’s industrial growth measured by the Index of Industrial Production (IIP), delivered a growth of 3.1% above consensus estimates in September 2022. Growth in IIP is led by the mining, manufacturing, and electricity sectors.
  • International Monetary Fund (IMF) said, the global economic outlook is even gloomier than projected last month due to the tightening monetary policy on account of persistently high inflation, weak growth momentum in China, and ongoing supply disruptions and food insecurity led by Russia-Ukraine war. It has cut the global growth forecast to 2.7% from 2.9% earlier for 2023.
  • Indian IT companies L&T Infotech (LTI) and Mindtree have received approval for a merger from National Company Law Tribunal (NCLT) and they will start operating as an LTIMindtree effective from 14th November 2022. The board of both companies has fixed 24th November as a record date for the allocation of shares of the merged entity to eligible shareholders. LTI-Mindtree announced the merger in May 2022, postmerger Mindtree shareholders will get 73 LTI shares for every 100 shares of Mindtree.
  • India’s foreign exchange reserves stood at USD 530bn for the week ended 12th November 2022, which declined by USD 1.087bn. in the previous reporting week, the reserves declined by USD 6.561bn. the reserves have been declining as the RBI defends the rupee amidst of global pressures.
  • During the week both Foreign and Domestic institutional investors were the net buyers, Foreign Institutional Investors (FIIs) net bought shares worth Rs 3,492mn, and Domestic Institutional Investors (DIIs) net bought shares worth Rs 22,750mn.

 

Things to watch out for next week

  • US markets have a truncated next week as markets will be closed on Thursday, 24th November on account of Thanksgiving Day. Inventors will closely watch the initial jobless claims data and FOMC meeting minutes on 23rd
  • In India investors will closely watch the weekly forex reserve data next week, how the RBI is defending the rupee amidst global pressures. The result season in India for the July-September quarter officially ended during the week of 14th-18th We expect stock-specific action as the results are out of the way.

 

Disclaimer: “The views expressed are for information purposes only. The information provided herein should not be considered as investment advice or research recommendation. The users should rely on their own research and analysis and should consult their own investment advisors to determine the merit, risks, and suitability of the information provided.”

Week in a Nutshell (31st October – 4th November)

Technical talks

NIFTY opened the week on 31st October at 17,910 and closed on 4th November at 18,117. During the week, NIFTY gained 1.9%. It closed above 18,000 for the first time since early January this year. On the upside, the all time high of 18,600 can be the first target to achieve. On the downside, it can take support at the 50 week moving average of 17,100.

Among the sectoral indices, METAL (+7.5%), PHARMA (+2.9%), and OIL & GAS (+2.8%) were the top gainers during the week. There were no losers during the week.

Weekly highlights

  • The US market ended the week negatively with Dow Jones down 1.4% and S&P 500 down 3.3%.
  • On Wednesday, US Federal Reserve increased the repo rate by 75 basis points, taking the key repo rate to 4%, the highest since 2008. They also signalled that their aggressive campaign to curb inflation could be approaching its final stage.
  • On the next day, the Bank of England raised their repo rate by 75 basis points to 3%. This was the biggest hike since 1989.
  • In India, the government collected Rs 1.52 trillion as goods and services tax(GST) in October, a 16.6% rise year-on-year, driven by festival-related spending, higher tax rates, and better compliance. This was the second-highest monthly collection since the implementation of the indirect tax regime in July 2017. GST collection touched a record high of Rs 1.67 trillion in April. This is the eighth month in a row that monthly GST revenue has been more than Rs 1.4 trillion.
  • Electric two-wheeler registrations have hit an all-time high for 2022, touching close to 68,324 vehicles in the festival month of October this year, an increase of 29 per cent over the last month. However, ICE two-wheeler registration has grown even faster than electric vehicles. Overall two-wheelers have shot up by over 45% in October compared to September. With this latest figure, electric two-wheelers now account for around 4% of total two-wheeler registrations between January-October.
  • Electric passenger and motor vehicles(light, medium and heavy) which includes motor cars and buses have seen their registrations more than double in the calendar year 2022 till October 31 with another two months still to go. They have hit registrations of 31,281 vehicles compared to 13,884 for the full year of 2021 a growth of over 125% according to data from VAHAN.
  • Credit card issuers saw significant erosion of their card base during the July-September quarter as the Reserve Bank of India’s (RBI) norms mandated the deactivation of cards that have been inactive for a year. In April this year, the RBI came out with a master direction on credit and debit card issuance. It said if a credit card has not been used for more than one year, the process to close the card should be initiated after intimating the cardholder. The second quarter of the current financial year saw an outstanding cards-in-force decline by 2.55 million to 77.7 million. Meanwhile, credit card spending has continued to be on an upward trajectory. They topped the Rs 1 trillion mark for six consecutive months. Spends touched a record high of Rs 1.22 trillion, buoyed by higher discretionary spending during the festive season.
  • Credit to industries in September 2022 grew at the fastest pace it has grown in the last 100 months, aided primarily by a pick-up in working capital loans from corporates.
    According to the latest sectoral deployment data of the Reserve Bank of India, credit to industries, which accounts for 27.6% of non-food credit, was up 12.6% year on year to Rs 32.4 trillion. Month on month, it rose 1.4%, the highest in seven months. On a year-to-date basis, it was up 2.7%.
  • During the week, Foreign Institutional Investors (FIIs) net bought shares worth Rs 10.3 bn, however, Domestic Institutional Investors (DIIs) sold shares worth Rs 4.5 bn.

 

Things to watch out for next week

  • Next week is a four-day work week as NSE and BSE will be closed for trading on Tuesday 8th, on account of Gurunanak Jayanti.
  • The biggest economy, the US will report its inflation number for October this week. The second biggest economy, China will report its balance of trade data for the month of October. Political disputes kept aside, our dependence on that country for the import of raw materials cannot be ignored. Hence, this is an important datapoint to keep track of.
  • The result season for July-September quarter is coming to an end with biggies like Godrej Consumer, Tata motors, M&M, amongst others reporting their results. We expect stock specific action.

 

Disclaimer: “The views expressed are for information purposes only. The information provided herein should not be considered as investment advice or research recommendation. The users should rely on their own research and analysis and should consult their own investment advisors to determine the merit, risks, and suitability of the information provided.”