#WeekInANutshell

Week in a nutshell (9th May to 13th May)

Technical talks

NIFTY opened the week on 9th May at 16,227 and closed on 13th May at 15,782. During the week, NIFTY was down 3.8%. The index has breached the 50-week moving average on the weekly chart with RSI at 37. The immediate support for the index stands at 15,515 and resistance at 16,230.

PSU Bank (-8.8%), Realty (-5.8%), and Infrastructure (-5.3%) were the top losers and there were no sectoral gainers during the week.

Weekly highlights

  • The Life Insurance Corporation of India (LIC) public issue got bids for Rs 439,335 mn on the final day of bidding on May 9, more than double the issue size. According to subscription data available on markets, the offer was subscribed 2.95 times, with investors bidding for 478.2 mn equity shares versus an IPO size of 162 mn shares. Policyholder participation remained strong, with bids totalling 6.12 times the authorised quota and the value of shares subscribed was Rs 120,340 mn. Retail investors put in Rs 124,560 mn in the IPO, the most among investors from May 4 to 9. Employees’ reserved portion was subscribed 4.4 times.
  • Oil prices surged more than 5% on 11th May as Russian gas deliveries to Europe decreased and Russia sanctioned certain European gas businesses, adding to global energy market turmoil. On 13th May, Crude oil closed 4% higher at usd 110 and Brent crude oil closed 3.8% higher at usd 112.
  • According to the official data released on 11th May by the Labor Department of the US, the annual growth in the consumer price index (CPI) peaked in March at 8.5% but decreased in April to 8.3% due to lower energy expenses. After a 1.2% gain in March, the CPI rose only 0.3% in April, but excluding volatile food and energy commodities, the index increased 0.6%, double the rate in March, according to the study.
  • According to the data released on May 12, inflation for April in India was 7.77%, higher than the 7.5% consensus forecast driven by fuel items, with the CPI index for the ‘fuel and light’ group climbing 3.15% MoM in April. Higher-than-expected retail inflation in April has raised expectations of another repo rate hike at the Reserve Bank of India’s (RBI) Monetary Policy Committee meeting on June 6-8.
  • According to data released on May 12 by the Ministry of Statistics and Programme Implementation, India’s industrial growth, as per the Index of Industrial Production (IIP) increased to 1.9% in March from 1.5% in February.
  • America’s employers’ added 428,000 jobs in April, extending a streak of solid hiring that has defied punishing inflation, chronic supply shortages, the Russian war against Ukraine, and much higher borrowing costs. The unemployment rate was at 3.6%, just above the lowest level in a half-century. The economy’s hiring has been remarkably consistent in the face of the worst inflation in four decades. Employers have added at least 400,000 jobs for 12 straight months.
  • Foreign institutional investors (FIIs) continued to be sellers, selling equities worth Rs 163,583 mn. Domestic institutional investors (DIIs) continued to be buyers and bought equities worth Rs 182,020 mn.

Things to watch out for next week

  • Volatility is expected to remain high as rising global inflation forces investors to reconsider their expectations for strong earnings growth. Fears of a further rise in the US 10-year bond yield, geopolitical concerns, and oil price volatility will keep investors on edge.
  • With the inflation data released, investors are looking forward to Fed’s intended 50 bps interest rate hike in the next meeting. The United States housing market updates for April are expected on the 18th of May. Consumer Price Index (CPI) inflation for the Eurozone, the United Kingdom, and Canada will be released this week, indicating whether global inflation rates have peaked. We can also anticipate the release of the United States Census Bureau’s report on retail sales for April, as well as earnings from some major retailers, such as Walmart and Target.

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 (May 2nd to May 6th)

                                                                                       Technical talks

NIFTY opened the week on 2nd May at 16,924 and closed on 6th May at 16,411. During the week, NIFTY was down 1.63%. The index has breached the 50-week moving average on the weekly chart with RSI at 42. Immediate support for the index stands at 16,269 and resistance at 16,763.

Nifty Realty (-8.0%), Nifty Media (-6.0%), and Auto (-5.0%) were the top losers and there were no sectoral gainers during the week.

                                                                                     Weekly highlights

  • Wall Street had a very volatile week. At the start of the week, the stocks were trading higher on the back of news that the European Union is working on new sanctions against Russia for waging war on Ukraine that will target Moscow’s oil industry.
  • The rally continued after the Federal Reserve delivered a widely expected interest-rate hike of half a percentage point with another half-percentage-point rate hike expected at the upcoming policy meetings in June and July.
  • Bureau of Labor Statistics released data revealing a tight labor market that has emboldened millions of Americans to seek better-paying jobs, while also contributing to the biggest inflation surge in four decades.
  • Later in the week, US stocks ended sharply lower amid a broad sell-off, as investor sentiment cratered in the face of concerns that the Federal Reserve’s interest rate hike would not be enough to tame surging inflation. All three main Wall Street benchmarks erased gains made in the earlier rally.
  • The downward journey continued as stronger-than-expected jobs data amplified investor concerns over bigger interest rate hikes by the U.S. Federal Reserve to tame surging prices.
  • Indian markets also followed the lead and were no less volatile. Entirely unexpected – the Reserve Bank of India (RBI) on May 4 increased the repo rate by 40 basis points to 4.4 percent for the first time in almost two years since the start of the pandemic in 2020. This comes when inflation has been rising to an 18-month high amidst a rebound in domestic economic activity.
  • RBI Governor stated that India’s foreign exchange reserves are “sizeable” and the outlook for the country’s overall external sector is bright. Potential market opportunities have opened up due to geopolitical conditions and the recent trade agreements.
  • LIC launched its IPO on 4th May 2022. Through this IPO, the government of India will be liquidating its 3.5 percent stake in the corporation. The offer has garnered bids of 223.4 mn equity shares against the offered size of 162 mn shares, subscribing 1.38 times on Friday.
  • International Monetary Fund released data saying India’s GDP to hit USD 5 tn in FY29E and the Rupee at 94 a Dollar.
  • Oil prices dipped as worries about an economic downturn that could dampen demand for crude vied with concerns over new sanctions from the European Union against Russia, including an embargo on crude oil.
  • Larsen and Toubro Infotech (LTI) board approved amalgamation with Mindtree, creating a USD 3.5 bn IT service provider named LTIMindtree.
  • Axis AMC suspended two fund managers pending investigation of potential irregularities after conducting a suo moto investigation over the last two months and used reputed external advisors to aid the investigation.
  • Foreign institutional investors (FIIs) continued to be sellers, selling equities worth Rs 1,27,335 mn. Domestic institutional investors (DIIs) continued to be buyers and bought equities worth Rs 85,333 mn.

                                                                       Things to watch out for next week

  • The 4QFY22 earnings season so far has not succeeded to uplift the market sentiments. The commentary so far from companies on rising pressure on their margins and muted demand environment has tempered the enthusiasm of investors.
  • We expect volatility to remain high in the coming days as surging global inflation is forcing investors to reconsider their assumptions of strong earnings growth. Fear of further up move in the US 10-year bond yield, geopolitical concerns, fluctuations in oil prices, and earnings season will keep the investors on their toes.

 

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 (25th – 29th April)

Technical talks

NIFTY opened the week at 17,006 on 25th April. The index closed 0.8% lower at 17,102 on 29th April. RSI (14) of 49 and MACD are trending downwards. On the upside, the 20DMA weekly of 17,273 could act as resistance while 16,379 could act as support.

FMCG (+1.3%), Auto (+0.5%), and Private Bank (0.2%) were the sectoral gainers in the week. Media (-6%), PSE (-4.4%), and IT (-2.5%) led the laggards.

Weekly highlights

  • The US indices closed the week lower as the market priced in weak earnings from tech giants, inflation worries, and aggressive monetary policy tightening by the Federal Reserve. S&P 500 was down 3.6%, Nasdaq 100 4.5%, and Dow Jones was down 2.8%.
  • With the Q4 earnings season going in full swing, Indian indices are driven by rising input prices, margin pressures, and weak future expectations by companies.
  • Life Insurance Corporation of India, India’s largest life insurer, is set to launch its IPO on May 4. The IPO, according to its red herring prospectus, will comprise an offer for sale of 220 mn equity shares at Rs 902-949 apiece. How the IPO performs amidst uncertainties caused due to geopolitical tensions and foreign sell-offs remains to be seen.
  • The RBI is expected to raise policy rates among major central banks in Asia to tackle the surged inflation. Traders have been pricing a potential 25bps hike in repo rates in June. This has resulted in increased volatility in recent trading sessions.
  • For April 2021-February 2022, the Index of Industrial Production in India averaged 129.97 against 130.1 in the corresponding pre-pandemic period of FY20. Shortage of key raw materials, rising pricing pressures, and global geopolitical risks are some of the challenges faced by the manufacturing sector. Sectors such as chemicals, machinery, and electrical equipment logged an annual contraction in industrial output in February.
  • In light of the recent battery-related fires inside electric two-wheelers, the Union government has asked all-electric two-wheeler brands to refrain from launching new products in the market. The makers are free to sell current models in the market. This is expected to give the government more time to set up an authority for taking a closer look at the cause behind these fires.
  • Traders in the US are pricing a 50 bps interest rate hike when the Fed meets next on May 3rd. Traders are expecting a potential 75bps hike in June, following the meeting next week.
  • A mixed set of earnings from US tech giants has left investors feeling anxious. Investors expected healthy earnings to hold the markets up after a vicious sell-off caused due to an increasingly hawkish Fed and geopolitical tensions stemming from the Russia-Ukraine crisis.
  • FII (Foreign Institutional Investors) continued to be sellers this week and sold shares worth Rs 1,14,450 mn while DII (Domestic Institutional Investors) continued to be buyers and bought shares worth Rs 97,000 mn.

Things to watch out for next week

  • Continuing with the Q4 results season, management commentary about near-term economic recovery, rising cost inflation, and margin pressures are expected to drive the markets.
  • Rising Covid-19 cases in Shanghai, China, and subsequent lockdowns will continue to impact oil prices and equity markets globally. The supply chain disruption for key inputs coming from China is expected to continue to hurt investor sentiments.

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 (18th – 22th April)

Technical talks
NIFTY opened the week at 17,183 on 18th April. The index closed 1.7% lower at 17,172 on 22nd April. RSI (14) of 47 and MACD are trending upwards. On the upside, the 17,465 could act as resistance while 16,965 could act as support.

Auto (+3.1%) was the only sectoral gainer in the week. IT (-5.6%), Financial Services (-4.3%), and Media (-4.2%) led the laggards.

Weekly highlights

  • The US indices closed the week lower as the market priced in persistent inflation and US Fed’s imminent 50 bps interest rate hike. S&P 500 was down by 2.6%, Nasdaq 100 by 3.7%, and Dow Jones was down by 1.7%.
  • Q4 result season continues to be in the fray as various Nifty 50 companies reported results, increasing input costs, supply, and logistical challenges and margin pressures continue to be a persistent challenge across the board.
  • Data from the National Bureau of Statistics showed on Monday that China’s economy slowed in March as consumption, real estate, and exports were hit hard, taking the shine off faster-than-expected first-quarter growth numbers and worsening an outlook already weakened by COVID-19 curbs and the Ukraine war. Gross domestic product (GDP) expanded by 4.8 percent in the first quarter from a year earlier.
  • The International Monetary Fund (IMF) has cut its growth forecast for India for FY23 by 80 basis points to 8.2 percent, warning that Russia’s invasion of Ukraine would hurt consumption and hence, growth, by way of higher prices reflecting in part weaker domestic demand – as higher oil prices are expected to weigh on private consumption and investment – and drag from lower net exports.
  • The blockades by groups in Southern and Eastern Libya citing political demands have caused National Oil Corporation to declare force majeure on output from several major fields and ports in recent days. Libya is currently losing more than 550,000 barrels per day in oil production from blockades on major fields and export terminals, creating supply challenges in an already affected market due to the Russia-Ukraine conflict.
  • The number of Americans filing new claims for unemployment benefits fell moderately last week, still suggesting that April was another month of strong job growth. The report from the Labor Department on Thursday also showed unemployment rolls shrinking to the lowest level in 52 years in the first week of April, reinforcing the tightening labor market conditions. An acute shortage of workers is keeping layoffs low, helping to fuel inflation, and forcing the Federal Reserve to adopt a restrictive monetary policy stance.
  • Federal Reserve Chair Jerome Powell stated that a 50 bps interest rate hike is imminent when the Fed meets next on May 3rd. The Fed is expected to be aggressive in its actions going ahead as inflation in the US is running roughly three times the Fed’s 2% target.
  • Wholesale inflation in India – measured by the Wholesale Price Index (WPI) — worsened to 14.55 percent in March from 13.11 percent in the previous month, data released on Monday showed. WPI for March was the highest in four months indicating worsening inflationary challenges.
  • FII (Foreign Institutional Investors) continued to be sellers this week and sold shares worth Rs 1,84,433 mn while DII (Domestic Institutional Investors) continued to be buyers and bought shares worth Rs 1,43,943

Things to watch out for next week

  • Continuing with the Q4 results season, management commentary about demand slowdown, and cost inflation would be key things investors would be concerned with.
  • Rising Covid-19 Cases in Shanghai, China, and subsequent lockdowns will be on investors’ minds as fears of a Chinese slowdown have been impacting the securities markets over the past 2 weeks.

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 (11th – 13th April)

Technical talks

NIFTY opened the truncated week at 17,741 on 11th April. The index closed 1.5% lower at 17,476 on 13th April. RSI (14) of 53 is trending downwards and MACD is trending upwards. On the upside, 18,191 could act as resistance while 20DMA of 17,296 could act as support.

FMCG (+1.7%), and Metal (+0.1%) were the only sectoral indices to close the week with gains. IT (-3.0%), Realty (-2.1%), and Auto (-1.1%) led the laggards.

Weekly highlights

  • IT heavyweights TCS, and Infosys released 4QFY22 and FY22 earnings this week. While the numbers were largely in line with the street estimates, attrition continues to be a problem. While demand continues to be robust, there are headwinds of hiring, salary increments, and return of travel spending.
  • US markets ended the week in the red on Thursday. Bond rates spiked as investors worried about the prospect of aggressive policy tightening in the United States. Oher central banks around the world have started increasing interest rates. Following the release of US economic data for retail sales and jobless claims, the benchmark US government yield increased.
  • Fuel costs rose during the first full month of the Russia-Ukraine war, causing inflation in the United States to reach a 40-year high. While prices began to rise last year as the economy recovered from the Covid-19 outbreak, the most recent monthly report showed expenses for numerous items reaching record highs. According to the report, the increase may be leveling out.
  • The European Central Bank confirmed its asset purchase program will end in the third quarter. Once the bond-buying program is completed, the ECB is expected to begin interest rate hikes, following the Bank of England and the US Federal Reserve.
  • A substantial rise in automobile output in March bolstered US industrial activity for the third straight month, possibly indicating that the worst of the industry’s production woes from 2021 were passed.
  • Oil prices retreated after the release of a larger-than-expected build in the US oil stocks. Brent oil closed at USD 111/barrel while Crude oil WTI closed at USD 107/barrel on Thursday.
  • FII (Foreign Institutional Investors) continued to be sellers this week and sold shares worth Rs 63,342mn while DII (Domestic Institutional Investors) continued to be buyers and bought shares worth Rs 27,674 mn.

Things to watch out for next week

  • The markets are likely to take cues from corporate earnings, and geopolitical tensions between Russia and Ukraine amid rising inflation globally.
  • The Indian markets would react to earnings from IT companies such as Mindtree, Larsen & Toubro Infotech (LTI), and HCL Technologies. While the market leaders have alluded to higher attrition, amidst a robust demand environment, the impact of attrition on smaller companies would be something to watch for.

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 (4-8th April)

Technical talks

NIFTY opened the week on 4th April at 17,809 and closed on 8th April at 17,784. After moving in the range of 500 points, it finally made a Doji candle which suggests indecisiveness in the market. The index is trading below the upper Bollinger Band level of 18,175 which might act as a resistance. On the downside, the 16,370 level might act as a support. The RSI (57) and MACD turning upward suggests a further although limited possible upside.

Among the sectoral indices, FMCG (+4.4%), METAL (+4.3%), and PSU BANK (+3.9%) were the gainers during the week. IT (-2.6%), MEDIA (-0.3%) were the week’s losers.

Weekly highlights

  • The US indices closed the week with the tech-heavy Nasdaq index falling 3.9%, S&P 500 fell by 1.3%, and Dow Jones was down by 0.3%.
  • The inflation in the US is at a 40-year high on the back of higher fuel and commodity prices. The minutes of the Federal Open Market Committee meeting in March revealed that several members had called for an aggressive 50 bps hike in interest rates. Still, the FED Chair, Jerome Powell chose to go for a 25 bps hike due to concerns over Russia’s invasion of Ukraine and its effects on the economy.
  • Closer home, the Reserve Bank of India also has the same worry about inflation. On Friday, the monetary policy committee concluded its bi-monthly meeting by keeping the repo rate unchanged at 4%. The rate at which RBI borrows money from banks to suck excess liquidity now stands at 3.75%.
  • A big, breaking newsworthy event occurred with HDFC Ltd., the housing finance giant and HDFC Bank, the largest private sector bank (by market cap) announcing their merger on Monday. An HDFC Ltd. shareholder with 25 shares will get 42 shares of HDFC bank. A lot is going on here from changing fundamentals to a rejig in mutual fund portfolio weights. The merger is expected to be over in the next 18 months subject to multiple regulatory approvals. There will be no dearth of updates and announcements. Worry not, we will be covering everything for you.
  • The long-awaited and recurringly delayed IPO of The Life Insurance Corporation of India is likely to conclude by May 12. A delay beyond that will require the government to issue a fresh filing with the market regulator. During the roadshows, the Centre has declared that it would not look for further equity dilution to prevent any downward pressure on the stock price.
  • The mutual fund industry AUM clocked in a 19.5% year on year growth and the average AUM stands at ₹38.4 trillion during the March 2022 quarter. The inflows through systematic investment plans (SIP) stood at nearly ₹230 bn for January and February 2022. SIPs inflows are largely driven by retail investors. Among the top 10 fund houses, five managed to clock industry-beating growth.
  • GST collections hit an all-time high in March at ₹1.42 trillion. The revenues for March 2022 are 15% higher than the GST revenues in the same month last year. The collections have stayed above the ₹ 1.10 trillion mark since July last year.
  • Since this was a week full of FY22 annual data points, an interesting piece of information is that the draft red herring prospectus (DRHP) filed with SEBI jumped nearly fivefold to 145 in FY22 compared to just 30 in the last financial year. FY22 saw the highest filings since 2007-08. Companies from new-age sectors such as fintech, online e-commerce and food delivery tapped the market for the first time. The year saw companies from several unique sectors as well as traditional businesses file their offer documents. A large number of filings was on account of the push from private equity and venture capital (PE/VC) investors looking to exit their investments.
  • FII (Foreign Institutional Investors) net sold ₹ 63,375 mn, and DII (Domestic Institutional Investors) were net buyers this week. DIIs bought shares worth ₹ 41,615 mn.

Things to watch out for next week

  • The 4QFY22 earnings season kicks off from Monday with IT giants TCS and Infosys publishing their quarterly and full year FY22 earnings. Management commentary on attrition, FY23 outlook and guidance will be key variables for the IT industry.
  • A quarter largely impacted by the Russia-Ukraine war, barring IT companies, which escaped from the brunt of the war, market will keenly look for those that got beaten up and others which have shown enough resilience this quarter.

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 March- 1st April)

Technical talks

NIFTY opened the week on 28th March at 17,182 and closed on 1st April at 17,670. It made a gain of 2.8% during the week. The index is trading below the upper Bollinger Band level of 17,937 which might act as a resistance. On the downside, the 17,324 level might act as a support. The RSI (63), and MACD turning upward suggests a further possible upside.

Among the sectoral indices, REALTY (+5.7%), FINANCIAL SERVICES (+5.1%), and BANK (+4.9%) led the gainers during the week. PHARMA (-0.2%) was the week’s only loser. 

Weekly highlights

  • The US indices closed the week with marginal gains as concerns regarding the continuing conflict between Russia and Ukraine persisted with its inflationary effect on prices. S&P 500 was up by 0.1%, Nasdaq 100 by 0.7%, and Dow Jones was down by 0.1%.
  • The US president Joe Biden has announced that the U.S. will release 1 million barrels of oil per day from its strategic reserves. The announcement came as the White House looked forward to combat a spike in energy prices caused by Russia’s invasion of Ukraine. 
  • Russia has offered crude oil to India at a discount of USD 35 per barrel on pre-war prices. Russia has offered Rupee-Ruble-denominated payments using Russia’s messaging system SPFS (System for Transfer of Financial Messages). The direct purchase is expected to involve Russia’s Rosneft PJSC and the Asian nation’s biggest processor Indian Oil Corp., which have an optional term contract. A final decision is yet to be made.
  • Axis Bank has bought Citigroup’s consumer banking business in India for up to Rs 123 bn and it expects the transaction to get completed in 9-12 months. Around 3,600 Citi employees will be transferred to Axis Bank, and Citi expects the release of about USD $800 mn of allocated tangible common equity after the deal.
  • The board of directors of PVR Limited (PVR) and INOX Leisure Limited (INOX) on Sunday approved an all-stock amalgamation of INOX with PVR at their respective meetings. Post-merger, PVR’s Promoters will have a 10.6% stake while INOX’s Promoters will have a 16.7% stake in the combined entity. Inox shareholders will receive three shares in PVR for 10 shares of Inox.
  • Emami on Friday said it has acquired the ‘Dermicool’ brand from Reckitt Benckiser (India) Ltd for a total consideration of Rs 4,320 mn. It is a brand popular for providing respite from prickly heat caused during the summer season. The acquisition is funded through internal accruals.
  • Adani Total Gas has forayed into electric mobility by launching its first electric vehicle charging station (EVCS) in Ahmedabad. The company aims to expand its network by setting up 1,500 EVCS across the country and has kept an expansion plan ready once the demand for EV ecosystem picks up in India. 
  • FII (Foreign Institutional Investors) and DII (Domestic Institutional Investors) were net buyers this week. There was a net inflow of Rs 55900 mn from the FII while DII invested Rs 50525 mn.

Things to watch out for next week

  • We expect the next week to remain less volatile. Market will await the results for the quarter ending March-22. News flow from Ukraine is the only potential source of volatility in the global markets. 
  • The release of data from the US Purchasing Managers’ Index (PMI) and Fed Reserve’s minutes will give investors additional insights into current economic conditions. 

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 – 25th March)

Technical talks

NIFTY opened the week on 21st March at 17,329 and ended at 17,153 on 25th March. Amid the geopolitical tensions and oil prices volatility, the Indian benchmark index closed in the red with a weekly loss of 1%. The next support and resistance levels for the index would be 17,024 and 17,442 respectively.

Among the sectoral indices, MEDIA (+7%), METAL (+5%), and OIL & GAS (+3%) were the gainers during the week. CONSUMER DURABLES (-5%), FMCG (-3.4%), and FINANCIAL SERVICES (-3%) led the losers.

Weekly highlights

  • The S&P 500 and Dow Jones ended higher on Friday and Nasdaq closed marginally lower. Financial shares rose on Friday and boosted S&P 500 as the US treasury yield jumped to near its 3 years high. Investors will watch how the Federal Reserve will tighten its policy after Fed Chair Jerome Powell this week said the central bank needs to move quickly to combat high inflation.
  • Oil prices recovered from early losses and ended higher on Friday after the two consecutive weekly losses as the missile attack hit Saudi Aramco’s storage facility and Saudi Arabia warned the crude supplies are at risk. Brent Crude and West Texas Intermediate finished the week at USD 119 and 113 a barrel up 10% and 8% for the week respectively.
  • In India, petrol prices continue to increase. The oil companies hiked the price by 80 paise per liter on Saturday, this is the fourth hike in the last five days. Oil companies started the series of price hikes from 22 March and petrol price increased by Rs 3.20 per liter till date from 22 March. Since 4th November 2021 prices had been frozen. These will lead to inflationary pressure on Indian consumers as well as organizations.
  • India’s exports exceeded USD 400bn in 2021-22, added ~USD 110bn through the year with a 37% increase on an annual basis. Engineering goods, petroleum products, gems, and jewelry witnessed an increase in the share of exports. Even electronics goods and agricultural commodities saw an uptick in exports.
  • United Nations downgraded India’s projected economic growth for 2022 from 6.7% to 4.6%. India in particular will face restraints on several fronts like energy access and prices, primary commodity restrictions, food inflation, tightening policies, and financial instability.
  • The foreign institutional investors (FII) continued to be sellers and sold equities worth Rs 53,450mn while Domestic institutional investors (DIIs) continued to be buyers and bought equities worth Rs 40,250mn.

Things to watch out for next week

  • Investors enter the last week of FY22. This typically sees tax-loss harvesting and NAV management by institutional investors. We expect to see increased volatility in mid and small-cap companies till the end of March. From 1st April, quarterly and annual volume and the business update will likely be driving the market. Investors will be focused on Indian Auto companies’ volumes data for March-22.
  • Indian equity markets remain volatile next week amidst rising geopolitical tensions between Russia and Ukraine, a series of petrol price hikes, pressure on crude oil prices due to a missile attack on Saudi Aramco’s storage facility.

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 (14th-18th March)

Technical talks

NIFTY opened the week on 14th March at 16,646 and ended at 17,287 on 17th March. NIFTY gained 1.8% throughout the week. The next support and resistance levels for the index would be 16,711 and 17,380 respectively.

All the sectoral indices gained this week, with Financial Services  (+6.8%), Bank (+5.7%), and Auto (+5.6%) being the gainers.

Weekly highlights

  • The retail inflation rate in India – measured by the Consumer Price Index (CPI)- came in at 6.07% in February 2022 as compared to 5.93% in February 2021. Commodity prices are expected to remain at elevated levels due to the geopolitical tensions disrupting supply chains and rising costs.
  • Russia-Ukraine update: Ukraine has warned that peace negotiations could last for weeks and said evacuations of combat zones continued, with another 5,000 people leaving Mariupol. Russia repeated a threat to target arms convoys sent by the US and its allies.
  • After losing ground for 5 consecutive days in the hopes of Russia-Ukraine coming to some sort of agreement, WTI crude settled above US$100/barrel on 18th March after negotiations between Russia and Ukraine deteriorated. Oil prices are expected to remain volatile till there’s some resolution on what Russia’s ultimate goal is.
  • The Federal Reserve on Wednesday raised interest rates by 25bps for the first time since 2018 and laid out an aggressive plan to push borrowing costs to restrictive levels. Investors in the US seemed to shrug off the initial jitters of the rate hike as Feds Chair Jerome Powell said the economy is strong enough to weather the rate hikes and maintain its current strong hiring and wage growth.
  • The Bank of England on Thursday hiked its main interest rate to its pre-pandemic level by 0.25%, the third increase in a row, to battle decades-high inflation. K. inflation hit a 30-year high in January and is expected to rise further as Russia’s invasion keeps energy prices high.
  • NASDAQ (+2%) and S&P500 (+1%) rallied for the fourth consecutive session on Friday as Fed met market expectations by starting its rate-hiking cycle on Wednesday.
  • The foreign institutional investors (FII) turned buyers this week and bought equities worth Rs 16,860 mn. Domestic institutional investors (DIIs) continued to be buyers and bought equities worth Rs 12,900mn.

Things to watch out for next week

  • The geopolitical tensions between Russia and Ukraine are expected to continue impacting supply chains, high commodity prices, and volatility in crude oil prices.
  • In India, the next few weeks are expected to be quiet on the corporate front as companies will be in a silent period before the announcement of the FY22 earnings.

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 (7th-11th March)

Technical talks

NIFTY opened the week on 7th March at 15,867 and ended at 16,630 on 11th March. NIFTY regained 2.4% throughout the week. The next support and resistance levels for the index would be 16,800 and 16,400 respectively.

All the sectoral indices gained this week, with Media  (+6.7%), Pharma (+6.3%), and IT (+3.4%) being the gainers.

Weekly highlights

  • Early in the week, Wall Street indices plummeted as oil prices soared to their highest levels since 2008, above $130 per barrel, owing to the ongoing conflict between Russia and Ukraine. Asian stocks followed the lead of their Wall Street counterparts.
  • The threat of a US and European ban on Russian products, as well as a delay in Iranian talks, triggered a massive stagflationary shock for international markets on Monday, sending oil prices soaring by more than 10%.
  • Global oil prices fell on Wednesday by the most in nearly two years after OPEC member the United Arab Emirates said it supported pumping more oil into a market roiled by supply disruptions due to sanctions on Russia. Brent and Crude WTI closed at USD 112.67 /barrel, USD 109.33/barrel respectively.
  • Indian Insurance monthly data for February 2022 was released during the week, the industry’s new business premium rose 27% over the previous month to Rs 27,465 crore in February 2022, 22% higher on a YoY basis.
  • The International Monetary Fund indicated that the war in Ukraine has sent a wave of more than 1 mn refugees to neighboring countries while triggering unprecedented sanctions on Russia. The US banned Russian oil imports while Britain would slowly phase out the imports.
  • The domestic market also witnessed a heavy sell-off early in the week however, the mood was reversed as the results of the state election turned positive for the market, and oil prices started cooling off.
  • US consumer prices surged in February 2022, culminating in the largest annual increase in 40 years, and inflation is poised to accelerate further in the months ahead as Russia’s war against Ukraine drives up the costs of crude oil and other commodities.
  • Japanese household spending rose for the first time in six months in January on a year-on-year basis, largely because of weakness in the prior year, even as the fast spread of the COVID-19 Omicron variant likely weighed on consumption later in the month.
  • The foreign institutional investors (FII) continued to be sellers and sold equities worth Rs 246,884 mn. Domestic institutional investors (DIIs) continued to be buyers and bought equities worth Rs 177,291 mn.

Things to watch out for next week

  • The markets will react to the FOMC meeting and the interest rate decision slated to come during this week.
  • By March 15th, companies are expected to file their advance tax that would signal the expected earnings of the listed companies in upcoming quarters.
  • The market will focus on the reduction of commodity prices and diplomatic development between Russia & Ukraine.
  • The market will also focus on inflation data to be released in India & the US, and the US Fed meeting is scheduled for next week.

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.”