Tag - week in a nutshell

The week in a nutshell (April 12th to 16th)

 

Technical talks

  • NIFTY opened the week on 12th April at 14,645 and closed on 16th April at 14,617. After beginning the week with major losses, the index rebounded to close flat for the week. The index is trading below its 20DMA of 14,661, which may act as resistance. The next level being 50DMA at 14,863. The Index breached its 100DMA at 14,316 during the week where it may find support.

Weekly highlights

  • The week began with major indices in red due to the rising Covid-19 cases and lockdown-like conditions imposed across major areas in the country.  Indices recovered during the week to end flat. Gains were seen in pharma, IT, metals, and auto stocks, while bank and realty indices ended in the red.
  • Due to the increasing number of COVID-19 cases in India, Foreign Institutional Investors (FII) turned net sellers this week,  at  Rs 10,590 mn. Domestic Institutional Investors (DII) were net buyers and pumped in Rs 6,080 mn.
  • Q4FY21 result earnings season started this week with the big 3 tech companies -TCS, Infosys, and  Wipro. All reported good revenue growth on the expected lines. Their comments for upcoming quarters suggest promising growth. On the back of a strong earnings show, Infosys has announced a buyback of Rs.92 bn, at an upper price limit of Rs. 1750/share.
  • The US Equity markets hit a record high during the week. The Dow Jones Industrial Average hit the historic milestone of 34,000 for the first time owing to economic recovery and stimulus package announced by President Joe Biden and reducing unemployment.
  • American banking major Citibank on Thursday announced that it will exit from the consumer banking business in India and 13 countries. This is a part of a global strategy of CEO Jane Fraser attributing the decision to an absence of scale to compete in these geographies. The bank has 35 branches in India and employs approximately 4,000 people in the consumer banking business. 
  • India’s retail inflation, measured by the Consumer Price Index (CPI), rose to 5.52 percent in March. Separately, the country’s factory output, measured in terms of the Index of Industrial Production (IIP), witnessed a contraction of 3.6 percent in February. The retail inflation during February was at 5.03 per cent.

Things to watch out 

  • Q4FY21 result season to continue with HDFC Bank and Nestle reporting their earnings. India’s COVID patient numbers will drive the sentiment of the market in the near term. Some economists are already reducing India’s GDP growth forecast for FY22 due to the second wave. We expect investors to focus back on cash flow creators – pharma, consumer, and software services. This is a holiday-shortened week due to a break on Wednesday. 

The Week in a nutshell (5th April- 9th April)

Technical Talks

NIFTY opened the week on 5th April at 14,778 and closed on 9th April at 14,835, a muted weekly gain of 0.4%. On the upside, 15,336 could be a resistance to watch out for. On the downside, 100DMA of 14,249 might act as a support. The flat trending RSI of 52 and reducing negativity in MACD indicates that the market might see some uptrend in the coming days.

Weekly Highlights

  • The Reserve Bank of India (RBI) maintained the status quo for the fifth time in a row on policy rate. The repo rate is kept unchanged at 4 percent. The RBI expects economic growth for FY22E to be at 10.5 percent. The Governor said that the recent surge in COVID-19 infections has created uncertainty over economic growth recovery.
  • SEBI: Capital markets regulator SEBI asked institutional investors like banks, insurance companies, and pension funds to follow the ’transparent’ Stewardship Code in order to be truly accountable to their clients and beneficiaries.
  • The country’s foreign exchange reserves declined by USD 2.99 billion to reach USD 579.29 billion in the week ended March 26, RBI data showed. The fall in reserves was on account of a decrease in foreign currency assets (FCA), a major component of the overall reserves. FCA declined by USD 3.2 billion to USD 538 billion. In the previous week ended March 19, the forex kitty had increased by USD 233 million to USD 582 billion.
  • According to AMFI, the equity mutual funds saw a net inflow of Rs 91,150mn in Mar-2021 as compared to an outflow of Rs 44,970mn in the previous month (Feb-2021). 
  • INR saw its worst one-day fall in nearly 20 months on Wednesday on the fears of another lockdown hitting economic recovery. INR closed 1.5% down on Wednesday and closed the week at 74.76INR/ USD.
  • Foreign Institutional Investors (FII) were net sellers worth Rs 23,410mn in Indian equities, against net buying worth Rs 26,044mn in the previous week. Domestic Institutional Investors (DII) continued to be net buyers worth Rs 11,550mn, lower than last week’s buying of Rs 39,660mn.

Things to watch out 

  • The 4QFY21 result season will kick-off on Monday with the biggie, TCS announcing its FY21 audited result. During the week, Infosys and Wipro will announce results. Investors will keep an eye on dollar revenue growth and EBIT margin delivered by IT companies during the result season. Apart from the IT sector, the rising raw material prices are expected to affect the profitability and margins of industrial companies.
  • The key macro numbers like inflation data, Industrial production, Wholesale Price Index (WPI), export and import data are to be announced during the week.