#WeekInANutshell

Technical talks

NIFTY opened the week on 23^rd May at 16,291 in the red and ended in the green at 16,352 on 27^th May, after high volatility during the week. The index gained 0.4% during the week. The next support and resistance levels for the index would be 16,253 and 16,414 respectively. It breached its 20 DMA levels and closed above that. The RSI (14) of 48 indicates the index is moving towards the overbought zone.

Among the sectoral indices, FINANCIAL SERVICES (+4.3%), PRIVATE BANK (+4%), and BANK (+3.9%) were the gainers during the week while METAL (-8.7%), OIL AND GAS (-3.7%) and REALTY (-3.3%) led the losers.

Weekly highlights

• US major indices closed the week in green after the 7 weeks of consecutive losses, the S&P 500, Nasdaq, and Dow Jones closed the week with gains of 6%, 7%, and 5% respectively. The rally was led by factors such as minutes from the federal reserve’s FOMC May meeting, a fall in weekly jobless claims, and inflation slowed slightly in April.
• Oil prices settled higher on Friday supported by the demand will continue to be elevated, the Brent crude and WTI crude closed with a gain of 1% and 0.9% respectively.
• The government of India has waived the customs duty on the import of some raw materials used by the steel industry and increased the tax on the exports of iron ore and concentrates to 50% from 30% earlier. This measure was taken to cool off the elevated steel prices in India. These duty changes in raw materials and intermediaries will lead to more availability of steel in the domestic market and reduce the elevated steel prices which give some relief to industries such as auto, construction, etc. who already struggling with supply challenges and input cost pressures.
• On 25^th May 2022, The power ministry said that they are working on a scheme to liquidate the past dues of power distribution companies (discoms). This scheme will provide relief to the entire chain in the power sector which is currently struggling under the pressure of non-payments. Delay of payments by discoms to power generating companies affects the cash flows and disrupts the provisions for the input supply such as coal. But this scheme will provide adequate liquidity and ensures that the discoms will pay their dues regularly.
• Amidst retail inflation surging the government of India announced the reduction in excise duty on petrol and diesel by Rs 8 and Rs 6 per liter respectively, and effectively this will reduce the petrol and diesel price by Rs 9.5 and Rs 7 per liter respectively. Along with the central government, some state governments have also slashed the value-added tax (VAT) on petrol and diesel. This reduction in excise duty on fuel will help the consumers and corporates while battling inflation.
• Department of promotion of industry and internal trade (DPIIT) said the total FDI equity inflows were at USD 58.77bn in FY22 vs USD 59.63bn in FY21 in India, a contraction of 1% in FY22. Although the total FDI into India stood at USD 83.57bn in FY22 and rose by 2%, Singapore, the US, and Mauritius remain the top 3 contributors to FDI while IT, Auto, construction, and pharma sectors attracted the highest inflows.
• On 26^th May 2022 ONGC said that they will invest Rs 310bn over the next 3 years to explore the basin for oil reserves, this will augment the production of the nation in its attempt to be self-reliant in the energy sector. In this program ONGC is trying to explore ~1700mn tonnes of oil and oil equivalent gas.
• The foreign institutional investors (FII) continued to be sellers and sold equities worth Rs 96,890mn while Domestic institutional investors (DIIs) continued to be buyers and bought equities worth Rs 112,580mn during the week.

Things to watch out for next week

• The report on India’s GDP growth, which is due on Tuesday, will be closely watched by investors. Aṣ India’s economic recovery from the Covid-19 pandemic is expected to have stumbled again in the Jan-Mar period.
• On Monday the US indices are closed on account of the Memorial Day but in the truncated week investors will closely watch the May employment report, monthly vehicle sales, and Federal Reserve’s beige book.
• The 4QFY22 earnings season is coming to an end. The Automobile companies are expected to release the monthly volume data for May, which will be closely watched. The volatility will likely continue next week amidst results, institutional activities, India’s GDP data, and global cues.

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.”

Technical talks

NIFTY opened the week on 16^th May at 15,845 and closed on 20^th May at 16,266. It made a gain of 2.7% during the week. The index is trading below the 20DMA level of 16,514 which might act as a resistance. On the downside, the 10 DMA level of 16,072 might act as a support. The RSI (44), and MACD turning upward suggests a further possible upside.

Among the sectoral indices, AUTO (+4.8%), FMCG (+4.5%), and REALTY (+4.3%) led the gainers, whereas IT (-2.8%) was the only loser during the week.

Weekly highlights

• The US indices closed the week in the red as investors worried that inflation and rising interest rates may adversely affect the overall demand and performance of businesses. Broad-based selling led to S&P 500 closing down 3%, Nasdaq 100 by 4.5%, and Dow Jones by 3%.
• International Holding Company PJSC (IHC) announced the completion of Rs 154bn investment in Adani Group’s companies namely Adani Green Energy, Adani Transmission, and Adani Enterprises. IHC’s investment will support and accelerate Adani Group’s growth plan to supply the country with 45 gigawatts (9% of India’s non-fossil energy) by 2030.
• The Adani Group has entered into agreements to acquire Swiss cement major Holcim Ltd.’s stake in Ambuja Cements and ACC Ltd as ~ USD 10.5 bn. After this deal, the Adani group will become the second-largest cement maker in the country with a capacity of about 70 Metric tons Per Annum.
• Maruti Suzuki India has planned to invest Rs 180bn in its new manufacturing facility in Haryana to roll out 1 mn units per annum in 8 years. The first set of vehicles is expected to roll out of the facility in 2025.
• Indonesia, the world’s largest supplier of palm oil said that it will lift a ban on exports from Monday (23^rd May). Indonesian President Joko Widodo said that the decision will take place despite bulk cooking oil being at higher prices than the target, as the government considers the welfare of 17 million workers in the palm oil industry.
• The Union Cabinet on Wednesday approved the National Biofuel Policy-2018 with several amendments, the major one on advancing the blending target of 20% blending of ethanol in petrol to 2025-26 from 2030 earlier. The policy is intended to help in meeting the target of reducing import dependence on fossil fuels.
• India’s power ministry said that it would cut domestic fuel supply to state government-run utilities by 5% if they do not import coal for blending by June 15, as officials struggle to address rising power demand. A heatwave pushed power use to a record high and forced India to reverse a policy of slashing coal imports.
• Data released on Tuesday showed that India’s wholesale price index (WPI) based inflation rose to 15% in April 2022, a double-digit figure for the 13^th consecutive month. It has spiked further due to the Russia-Ukraine Conflict, and headwinds arising out of disruption in the global supply chain. Fuel Inflation rose to ~39%, and food inflation was ~8%.
• FII (Foreign Institutional Investors) continued to be net sellers, selling of shares worth Rs 114,013 mn and DII (Domestic Institutional Investors) continued to be net buyers, buying of shares worth Rs 94,729 mn this week.

Things to watch out for next week

• The next week’s focus will be on the world economic forum (WEF) to be held in Davos from 22^nd May to 26^th The key topics that would be addressed during the sessions at WEF include ease of doing business reforms, energy transition, digital economy, startups, emphasis on innovation, and research in the healthcare ecosystem.
• We expect the markets to remain volatile as investors show the sentiments of fear guided by news related to the Ukraine-Russia war, supply-related constraints, and rising inflation.

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.”

Technical talks

NIFTY opened the week on 1st August at 17,243 and closed on 5th August at 17,397. The index gained 1.4% during the week. The index has managed to sustain above the 50DMA of 17,105 level, which acts as a support. On the upside, the recent high of 18,114 might act as a resistance.

Among the sectoral indices, IT (+2.8%), AUTO (+2.1%), and METAL (+2.1%) were the top gainers while REALTY (-2.9%) was the only loser in the week.

Weekly highlights

• Wall Street fluctuated (Indices data to be inserted) throughout the week due to better than anticipated corporate earnings, economic data, and US-China tensions following Speaker of the US House of Representatives Nancy Pelosi’s visit to Taiwan, which led to China conducting military exercises near Taiwan.
• China’s factory activity contracted in July after rebounding from COVID-19 lockdowns as new virus outbreaks and a bleak global outlook weighed on demand. (rephrase)
• Oil prices fell ahead of the OPEC+ meeting on August 3rd. In the meeting, it was decided that the cartel will add only 100,000 barrels a day of oil in September. Consumers feeling the inflationary squeeze due to higher oil prices won’t find much relief from the increase. Brent oil futures and WTI futures were mixed wherein the former settled 0.6% up at USD 94/ barrel and the latter 0.01% lower at USD 89/barrel. 
• The 5G spectrum auction concluded on August 2nd, with bids exceeding Rs 1.5 bn. Approximately 71% of the total spectrum was sold in the auction held through 40 rounds of bidding. The government has received bids totaling Rs 1,501,730 mn. 
• Reliance Jio was the highest bidder at the 5G spectrum auction, with bids of over Rs 880,000 mn. Bharti Airtel took 19,867 MHz for Rs 430,840 mn, while Vodafone Idea acquired the spectrum worth Rs 187,990 mn.
• Bank of England raised the interest rate by 50 bps to 1.75% despite warning that recession is on its way, even as inflation is now expected to top 13%.
• RBI in its policy meeting on Friday raised the repo rate by 50 bps. It now stands at 5.4%. The MPC also decided to remain accommodative while focusing on withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth.
• After nine months of relentless selling, foreign investors turned net buyers in July, investing Rs 49,890 mn in Indian equities as the dollar index fell and corporate earnings improved. This is in stark contrast to the stock market’s net withdrawal of Rs 501,450 mn in June. 
• FII (Foreign Institutional Investors) turned net buyers this week, buying shares worth Rs 54,620 mn. DII (Domestic Institutional Investors) turned net sellers by selling shares worth Rs 17,650 mn.

Things to watch out for next week

• India’s largest lender, State Bank of India (SBI), will report earnings on August 6. SBI is expected to report robust balance sheet growth, improvement in asset quality, and improved interest income.
• Investors and traders are focused on corporate earnings and announcements. The earnings of companies such as SBI, Tata Consumer, HAL, Eicher, Hero Moto, and Aurobindo may cause volatility in Indian markets. Share price moments would be driven by management comments on the impact of inflation on demand and the supply chain challenges, particularly chip shortages for 2W companies.
• With result season coming to an end next week, investors’ attention would be focused on company-specific news.

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.”

Technical talks

NIFTY opened the week on 4^th 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.”

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.”