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11 Sep

This Week in a Nutshell (5th – 9th September)

Technical talks

NIFTY opened the week on 5th September at 17,546 and closed at 17,833 on 9th September.  The index made a weekly gain of 1.7% during the week. On the upside, the upper Bollinger band level of 18,199 might act as a resistance. On the downside, it can take support at the 50-week moving average near 17,137. Even though the RSI of 60 does suggest some caution, in the recent past NIFTY has comfortably traded at a 60+ RSI level.

Among the sectoral indices, PSU BANK (+4.3%), IT (3.5%), and MEDIA (3.2%) led the gainers during the week. AUTO was the only sector that ended marginally in the red.

Weekly highlights

  • The US indices snapped a three-week losing streak despite remarks from the Federal Reserve officials on rising treasury yields. Geopolitical tensions and the US central bank’s aggressive tightening may tip the US economy into recessions were on investors’ minds during the volatile week. The US markets had a truncated week due to Labor Day weekend with the tech stocks and blue chips leading the rally. NASDAQ closed up 4.1%, S&P 500 up ~3.7%, and Dow Jones Industrial Average up ~2.7%.
  • Crude oil prices also remained volatile during the week with the OPEC+ meeting on Monday 5th. To support oil prices, which have fallen due to concerns about an economic downturn, OPEC and its partners, led by Russia, decided on a modest reduction in production. For October, the oil producers will reduce their output by 100,000 barrels per day (bpd), or just 0.1% of the world’s demand. They also concurred that Saudi Arabia, the organization’s dominant member, could call an emergency meeting at any time if volatility continues. Price hikes due to the output reduction would worsen India’s current account deficit.
  • The volatility in crude prices continued after reports that the Biden administration might stop releasing barrels from the US Strategic Petroleum Reserve on the market after October, in an attempt to keep energy prices down that have led to unprecedented inflation. Brent Oil ended the week at USD 92.4/barrel (-0.7%) while Crude Oil WTI (West Texas Intermediate) ended the week down 2.4% at USD 86.1/barrel.
  • After Russia announced that one of its key gas supply pipelines to Europe will remain closed indefinitely, gas prices in Europe increased by 30% on Monday. A leak in the Nord Stream 1 pipeline, according to Russia, will cause it to remain closed beyond the three days of scheduled repair last week.
  • In India, FADA released the data for retail sales of automobiles for August-22. The sales grew 8.3% YoY driven by an increase in vehicle registrations across all major segments. Two-wheeler retail sales grew 8.5% YoY while passenger vehicle sales grew ~6.5% YoY.
  • The National Company Law Tribunal (NCLT) Mumbai panel directed Zee Entertainment to call a shareholders’ meeting on October 14 to approve the merger with Culver Max Entertainment on Wednesday (formerly Sony Pictures Network).
  • To increase domestic supply in response to a decline in the area under the paddy crop in the current Kharif season, the Indian Government implemented a 20 percent export levy on all non-Basmati rice, with the exception of parboiled rice.
  • The Foreign Institutional Investors (FII) purchased equities worth Rs 61,367mn. Domestic Institutional Investors (DII) sold shares worth Rs 3,521 mn.

 Things to watch out for next week

  • Global markets will watch out for the US inflation numbers expected to be released on Tuesday 13th, ahead of the Federal Reserve policy meeting on September 20-21.
  • Indian investors’ attention would be on the consumer price index (CPI) inflation numbers for August, before the monetary policy meeting scheduled to be held towards the end of September. The industrial production data for July and wholesale price index (WPI) inflation for August is also expected to be released in week starting 12th. 

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.”

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17 Apr

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.”

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