#WeekInANutshell

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.”

This Week in a nutshell (Oct 24th to Oct 28th)

Technical talks

This week was a truncated one on account of Diwali. NIFTY opened the week on 25th October at 17,794 and closed on 28th October at 17,786. The 50WMA of 17,061 may act as a key support level, while the recent weekly high of 17,838 may act as key resistance for the index.

Among the sectoral indices, PSU Bank (+5%), Auto (+4%) and PSE (+3.5%) were the top gainers while FMCG (-0.7%), Media (-0.4%) were the losers in the week.

Weekly highlights

  • The Monetary Policy Committee will meet again on November 3rd, according to the central bank. According to an RBI statement, the meeting would be held in accordance with RBI Act Section 45ZN, which describes the actions the central bank may take if it fails to achieve the inflation target.
  • California-based company, Apple Inc’s revenue and profit both topped analysts’ estimates despite sales of iPhones and services being softer than expected last quarter. High levels of inflation and a slowdown in consumer spending are expected to impact the growth prospects of the company in the near term.
  • Following a meeting with King Charles III, Rishi Sunak, the leader of the Conservative Party, was sworn in as prime minister of the United Kingdom on Tuesday, according to a statement sent by Downing Street late on Monday.
  • Oil’s weekly gain was curtailed as investors stayed away from risky investments due to the deteriorating outlook for China and the global economy as a whole. As a risk-off mood extended over larger markets on Friday, West Texas Intermediate fell to about $88 per barrel. Investors’ expectations that Beijing will prolong its time to abandon Covid Zero are dimming China’s economic development prospects, while the economies of France and Spain shrank in Europe.
  • The US markets bounced back after a series of bear market lows as tech shares rallied followed by Apple’s earnings release that topped analysts’ estimates. US’s economic data also contributed to positive investor sentiments as it revealed that the Federal Reserve’s fight against inflation is making some headway. The fourth consecutive rate increase of 75 basis points by the Fed is still anticipated by economists to take place next week.
  • FII (Foreign Institutional Investors) turned net buyers this week, selling shares worth Rs 39,860 mn. DII (Domestic Institutional Investors) were net sellers, buying shares worth Rs 12,400 mn.

Things to watch out for next week

  • We expect markets to continue volatile as a result of investor reactions to earnings releases and macroeconomic news such as supply-related constraints, interest rate hikes, and rising inflation.
  • The monthly auto volume data from companies like Bajaj Auto, Maruti Suzuki, and Tata Motors will be watched. Commentaries about festive demand, export business from auto companies are expected to give some idea about the domestic and international economic recovery.

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 (Oct 10th to Oct 14th)

This Week in a nutshell (Oct 10th to Oct 14th)

Technical talks

NIFTY opened the week on 10th October at 17,094 and closed on 14th October at 17,186. During the week, NIFTY was up 0.5%. The index can revisit 17,050 on the downside. On the other hand, the near-term resistance is at 17,350.

Among the sectoral indices, IT (+0.8%), Private Bank (+0.5%) and Bank (+.3%) were the top gainers during the week.  Realty (-4.2%), Media (-3.6%) and Metal (-2.8%) were the top losers in during the week.

Weekly highlights

  • Wall Street continued bleeding this week. The week started low as investors were concerned about Fed’s monetary tightening trajectory and its impact on the corporate earnings along with ongoing geopolitical tensions.
  • The downfall continued after minutes from the last Federal Reserve meeting showed policymakers agreed they needed to maintain a more restrictive policy stance. Bank of England indicated that it would support the country’s bond market for just three more days.
  • Thursday’s hot CPI data which sparked an initial selloff in all three major U.S. indices dominated the week. Investors also digested higher-than-expected producer price inflation, a more-than-expected rise in jobless claims, slightly improved consumer sentiment data which also came with a surprise rise in one-year inflation expectations, flat retail sales for September, and a bigger-than-anticipated fall in import prices.
  • US prices rose 0.4 percent MoM in September, twice the 0.2 percent projected by analysts, with price increases for food, shelter and medical care weighing on consumers, according to data from the Bureau of Labor Statistics.
  • The annual rate of inflation slowed slightly to 8.2 percent from 8.3 percent, according to the report. It indicated that pricing pressures have become more intractable despite aggressive central bank action.
  • The week also saw the earnings season kick off with major U.S. banks reporting their results.
  • Back home, Indian market’s direction was set by the IT companies quarterly results during the week.
  • The week started in red but bounced back due to impressive quarterly results announced by Infosys, TCS, strong micro and stable oil price.
  • The International Monetary Fund (IMF) announced another cut to its gross domestic product (GDP) growth forecast for India for FY23E by 60 bps to 6.8 percent. The report stated weaker-than-expected outturn in the second quarter and more subdued external demand.
  • India’s industrial growth, as per the Index of Industrial Production (IIP), slid to an 18-month low of (0.8) percent in August from 2.2 percent in July, data released by the Ministry of Statistics and Programme Implementation.
  • Headline retail inflation measured by the Consumer Price Index (CPI) rose to 7.41 percent in Sept-22 from 7.00 percent in Aug-22.
  • During the week, the rupee fell further and touched a fresh record low of 82.7. However, domestic currency ended marginally lower at 82.4 per dollar on 14th Oct-22 against its 7th Oct-22 closing of 82.3.
  • The foreign institutional investors (FIIs) remained net seller for the week as they offloaded equities worth Rs 99,417 mn. However, domestic institutional investors (DIIs) purchased equities worth of Rs 70,310 mn during the week gone by.

 

Things to watch out for next week

  • Us Equity market: In the week ahead, the result season will kick off in earnest, with major names like Tesla Inc., Netflix, and Johnson & Johnson, among others reporting numbers.
  • As the earnings season picks up, Indian markets will look out for HDFC Bank’s numbers on Monday. The bond market of US and India will give an idea of the level of inflation and the market’s reaction to it will keep the market volatile.

 

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 (03rd October – 07th October)

 

 

 

 

Technical talks

NIFTY opened the week on 3rd October at 17,102 in the red and ended in the green at 17,315 on 7th  October, after high volatility during the week. The index closed marginally in the green during the week. The next support and resistance levels for the index would be 17,262 and 17,412 respectively. The RSI (14) of 50 indicates the index is showing signs of recovery.

Among the sectoral indices, MEDIA (+5.5%), REALTY (+3.8%), IT (+4%), and BANK (+2.7%) were the gainers during the week while METAL (-1.2%), OIL AND GAS (-1.0%) and HEALTHCARE (-0.9%) led the losers.

Weekly highlights

  • US major indices closed the week in red after the US Employment data erased the gains made during the week, the S&P 500, Nasdaq, and Dow Jones closed the week with losses of 1%, 2%, and 1% respectively.
  • Oil prices settled higher on Friday as OPEC has maintained its policy of cutting down production in the wake of an impending demand slowdown, the Brent crude and WTI crude ended the week with a gain of 10% and 9% respectively.
  • India’s tax collection from the sale of goods and services soared 26 per cent to Rs 1.47 trillion in September, on account of rising demand, higher rates, and greater tax compliance. The Goods and Services Tax (GST) collection remained above the Rs 1.4 trillion mark for the seventh straight month during the month up 27% YoY.
  • S&P Global India Manufacturing PMI in September was 55.1, as against August’s 56.2. Despite cooling down from August, despite India’s manufacturing activity losing a bit of momentum the rates of expansion remained historically high. The S&P report stated that manufacturing PMI was in expansion for the 15th month in a row.
  • Indian automakers witnessed strong sales growth in September as an improved supply of vehicles and pre-festive season inventory build-up at dealerships boosted dispatches. Carmakers either reported the highest-ever monthly sales or touched peak dispatches in many months. For two-wheeler companies, exports were weak with motorcycle sales also disappointing in the domestic market. The sales volumes in the commercial vehicles and tractors segment were also robust, suggesting an even stronger festival season for companies.
  • The World Bank on Thursday projected a growth rate of 6.5 per cent for the Indian economy for FY23, a drop of one per cent from its previous June 2022 projections. India is expected to be the outperforming economy in FY23 despite multiple headwinds.
  • OPEC+ agreed on its deepest cuts to oil production since the COVID-19 pandemic on Wednesday by 2 million barrels per day. The cut could spur a recovery in oil prices that have dropped to about $90 from $120 three months ago on fears of a global economic recession, rising US interest rates and a stronger dollar.
  • The foreign institutional investors (FII) continued to be sellers and sold equities worth Rs 360 mn while Domestic institutional investors (DIIs) continued to be buyers and bought equities worth Rs 9,640mn during the week.

Things to watch out for next week

  • This week will be very crucial for Indian Equity markets as the investors will closely watch Q2 Earnings releases from IT companies, and commentary about demand headwinds and deal pipelines would be on the radar.
  • Various Macroeconomic statistics such as IIP, CPI, WPI, Balance of Trade and the RBI MPC Policy Meet Minutes will be out in the upcoming week which may lead to increased volatility during the 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.”

 

This week in a nutshell (26th September- 30th September)

Technical talks

NIFTY opened the week on 26th September at 17,165 and closed on 30th September at 17,094 after declining to 16,750. The 50WMA of 17,100 may act as a key support level, while the recent weekly high of 18,320 may act as key resistance for the index.

Among the sectoral indices, Pharma (+2.9%) and IT (+1.5%) were the top gainers while Energy (-3.5%), Auto (-3%), and Realty (-3.0%) were the losers in the week.

Weekly highlights

  • On 30th September, in its ongoing attempts to control inflation in the economy, India’s Monetary Policy Committee increased the benchmark repo rate by 50 basis points to 5.9%, marking its fourth straight increase. The Monetary Policy Committee maintained its stance of focusing on removing accommodative measures in order to keep inflation within target while fostering growth in the upcoming years. At an unanticipated meeting in May, the committee raised rates for the first time by 40 basis points. Then, by 50 basis points in June and 50 basis points in August
  • The majority of the drop in India’s foreign exchange reserves is due to the shift in valuation as the dollar rose. India’s foreign exchange reserves stood at $537.5 billion, Das said in his monetary policy speech on Friday. About 67% of the decline in forex reserves in FY23 was due to valuation changes resulting from dollar appreciation, he said.
  • The year’s best market for car sales is still India. Sales have been consistent thus far in 2022, and with the festive season commencing at the end of September, we anticipate a higher fourth quarter, according to a note written by Moody’s Investor Service. India will beat its regional and international competitors thanks to a more improved macroeconomic climate, the reduction of semiconductor shortages, and dealer restocking, it added.
  • According to the Swedish news agency, a fourth leak on the Nord Stream pipeline has been discovered off the coast of southern Sweden. All four leaks that have been found are in international seas; two are close to Sweden and two to Denmark. Since Russian President Vladimir Putin invaded Ukraine seven months ago, Europe and, by extension, the rest of the world, have been dealing with an energy crisis.  The pipeline leaks have added to Europe’s existing economic woes.
  • Concerns about historically high inflation and future monetary tightening by central banks, particularly the Federal Reserve, would probably temper any sustained rally. BOE’s sudden intervention to buy an unlimited amount of long-dated bonds sparked record gains for gilts. Last Friday’s announcement of significant tax cuts by UK Chancellor of the Exchequer Kwasi Kwarteng led to a run on British assets due to worries about the government’s ability to pay for the change and its potential to further accelerate inflation.
  • US markets plummeted repeatedly by the Federal Reserve’s resolve to keep raising interest rates until inflation eases. Wall Street indices were volatile during the week with Nasdaq and S&P ending 1.7% and 1.5% lower respectively on Friday.
  • As concerns about restricted oil supplies were overshadowed by growing worries about a global recession and a rising dollar, oil is anticipated to post its first quarterly loss in more than two years. West Texas Intermediate prices, which have fallen by almost 24% this quarter, were trading close to $80 a barrel on Friday. The dollar’s recent record-high rise has rattled crude as aggressive central bank rate hikes cloud the outlook for global growth.
  • FII (Foreign Institutional Investors) turned net sellers this week, selling shares worth Rs 1,59,900 mn. DII (Domestic Institutional Investors) were net buyers, buying shares worth Rs 1,37,440 mn.

Things to watch out for next week

  • Auto companies are expected to release their September volumes of sales. The early festive season this year, which started on 26 September versus 7 October last year, is expected to brighten the outlook for the passenger vehicle (PV) segment. However, the two-wheeler (2W) segment is expected to be muted given the weak rural demand.
  • Quarterly updates by FMCG companies like Marico and banks are expected to drive the markets in the coming week.

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.”

This week in a nutshell (19th September- 23rd September)

 

Technical talks

NIFTY opened the week on 19th September at 17,540 and closed on 23rd September at 17,327. The index lost 1.2% during the week. The index has managed to sustain above the 50DMA of 17,327 level, which is acting as a support. On the upside, the recent high of 18,114 might act as a resistance.

Among the sectoral indices, FMCG (+3.9%), PHARMA (+2.1%), and AUTO (+1.1%) were the top gainers while REALTY (-3.9%), PSU BANK (-3.1%), BANK (-3.0%) were the losers in the week.

Weekly highlights

  • Wall Street indices were volatile and reacted to because of the Fed’s interest rate decision on 21st September. Nasdaq and S&P ended 1.6% and 1.7% lower respectively.
  • Oil prices during the week reacted to supply concerns ahead of the European Union embargo on Russian oil which offset fears of a global recession that could dampen fuel demand, stalled Iran nuclear agreement, and Fed interest rate hike. Brent oil futures and WTI futures ended lower wherein the former settled at USD 85/ barrel and the latter 5% lower at USD 79/barrel. 
  • The Federal Reserve raised its key interest rate by 0.75% on Wednesday, bringing the target range to between 3% and 3.25%. According to the Fed’s forecasts, interest rates will reach 4.4% by FY23E.
  • On September 22nd, the Bank of England raised its key interest rate by 0.5% to 2.25% from 1.75%, which is its biggest rate hike in 27 years. 
  • According to a circular issued by the Ministry of Finance on September 16, the government of India reduced the windfall tax on locally produced crude oil to Rs 10,500 from Rs 13,000 per tonne, easing the burden on consumers.
  • The RBI is depleting its foreign exchange reserves at a faster rate than during the taper-tantrum period in 2013, in order to prevent the rupee from overshooting. The country’s foreign exchange reserves fell by USD 2.2 bn for the week ended September 9 to USD 550.8 bn due to a drop in foreign currency assets (FCAs), a major component of overall reserves. Between January and July 2022, the RBI sold a net of USD 38.8 bn from its forex reserves. In July alone, a net of USD 19 bn was sold, and intervention remained intense in August when the rupee fell below 80 against the dollar.
  • The Asian Development Bank cut its growth forecasts for Asia, which includes India and China, for 2022 and 2023 on September 21 due to mounting risks from increased monetary tightening, the fallout from Ukraine’s war, and Covid-19 lockdowns in China. The ADB forecasts a 4.9% growth in the region’s economy in 2023.
  • On September 20, Yes Bank announced that its board of directors had approved the sale of USD 6 bn (approximately Rs 480 bn) in stressed debt to private equity firm JC Flowers after the bank received no challenger bids to JC Flowers’ base bid for the Rs 48,000 crore NPA portfolio.
  • FII (Foreign Institutional Investors) turned net sellers this week, selling shares worth Rs 43,620 mn. DII (Domestic Institutional Investors) were net buyers, buying shares worth Rs 11,380 mn.

Things to watch out for next week

  • Fed’s 75 basis point rate hike is expected to have a ripple effect which will weigh on MPC’s monetary agenda when it meets on 28th September. Investors will be looking forward to the comments from RBI regarding inflation and interest rate hikes.
  • Various economic data points are set to be released next week starting from Japan’s PMI and policy meet, China’s industrial profits and manufacturing PMI, US 2QFY22 GDP data, and jobless claims for the week.

 

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.”

This week in a nutshell (12th – 16th September)

Technical talks

NIFTY opened the week on 12th September at 17,891 and ended in the red at 17,531 on 16th September, after high volatility during the week. The index lost 2% during the week. The next support and resistance levels for the index would be 17,497 and 17,636 respectively. It broke its 20 DMA levels and closed below that.

Among the sectoral indices, METAL (+1.9%), PRIVATE BANK (+1.3%), and BANK (+0.9%) were the gainers during the week while IT (-7%), REALTY (-3.3%) and OIL & GAS (-3.2%) led the losers.

Weekly highlights

  • US major indices witnessed huge volatility during the week and closed the week in the red, inflation data and the federal reserve’s announcement in the next week regarding interest rate dragged down the investors’ sentiments the S&P 500, Nasdaq, and Dow Jones closed the week with heavy loss of 5%, 6%, and 4% respectively.
  • Oil prices fell for a third straight week, the Brent crude and WTI crude closed with a loss of 1% and 1.3% respectively during the week.
  • India’s retail inflation based on Consumer Price Index (CPI) surged to 7% in Aug-22 and burst the downward trend of the last 3 months. The surge was mainly led by higher food prices, as it accounts for nearly half of the CPI basket. The inflation remains above the RBI’s tolerance level of 6% for the last 8 months in a row. Along with CPI India’s Wholsale Price Index (WPI) data was also released. India’s WPI inflation stood at 12.4% in Aug-22, a decline from 13.9% in Jul-22, drop in fuel prices dragged down the WPI inflation below the previous month.
  • US CPI data was released during the week ahead of the Federal Open Market Committee (FOMC) meeting in next week, US CPI inflation stood above the expectation at 8.3% for Aug-22. The decline in gasoline prices helped to cool down the rate compared to the previous two months’ rate but the cost of food, housing, and autos remains elevated.
  • Mining conglomerate Vedanta and Taiwanese electronic manufacturer Foxconn announced an investment of Rs 1,540 Bn for India’s first semiconductor plant in Gujrat through a 60:40 joint venture. The plant is expected to start production in two years. Local manufacturing of chips is expected to bring affordability to manufacturing electronic devices and it will reduce the dependency on other countries.
  • Union health and family welfare ministry of India released the National List of Essential Medicines 2022 (NLEM 2022) on Tuesday. The NLEM 2022 consists of 384 drugs vs 376 drugs in 2015. New 34 drugs were added and dropped 26 drugs in the new list. The National Pharmaceuticals Pricing Authority (NPPA) fixes the prices for these drugs. The government said several important medicines will become more affordable and reduce patients’ out-of-the-pocket expenditure.
  • On Thursday, IMF spokesperson stated that the global economic outlook continues to be dominated by downside risk and in CY23 some countries are expected to fall into recessions, but it is too early to say if there will be a widespread global recession. IMF revised down the CY22 and CY23 global growth to 3.2% and 2.9% respectively in Jul-22.
  • Data released by the commerce ministry of India shows India’s merchandise export stood at USD 33.9 bn and trade deficit stood at USD 27.9 bn for the month of Aug-22. Electronic goods, rice, oil meals, tea, coffee, and chemicals witnessed positive growth.
  • Foreign investors invested ~ Rs 56 bn into the domestic equity markets in September so far in the anticipation of growth in consumer spending on account of the upcoming festive season and stronger macro fundamentals than other emerging markets.
  • The foreign institutional investors (FIIs) and Domestic institutional investors (DIIs)  both were the net sellers during the week. FIIs sold equities worth Rs 19,216mn and DIIs sold equities worth Rs 29,368mn.

Things to watch out for next week

  • Next week will be very crucial for the global financial markets as the investors will closely watch the Federal reserve’s FOMC interest rate decision on Wednesday and the Bank of England MPC meeting on Thursday as well as initial jobless claims in the US.
  • The investors might ride a rollercoaster in the next as volatility will likely persist in the next week amidst central banks’ stance on interest rates, heated inflation, and raw material and supply chain uncertainties on account of geopolitical tensions and elevated commodity prices.

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.”