Month: July 2022

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Research Report

Global Market – Will US Fed manage soft landing?

Will US Fed manage soft landing?

So, what is soft-landing and what is hard-landing.  US Fed primary object currently is to bring long term inflation around 2% and inflation target for 2022 is at 4.6%.  Last US CPI & Core CPI data released on 12-Jul-22 came at 9.1% & 5.90% respectively.

After tapper tantrum in 2013, where US Fed moves to control inflation led to financial crisis led by sudden sell-off in equity, commodity and emerging market currency.

Soft landing: US Fed wants to bring inflation down without causing financial crisis.

Hard landing: Repeat of financial crisis led by sudden monitory tightening by US Fed followed by other central banks.

In June 2022, global market including India was near 52-week low and stocks specific correction up to 50% to 70%.  Since then, data continue to remain at elevated level, but narrative have changed as some easing is seen in commodity prices.

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Weekly Reports

30-Jul-22 Technical & Fundamental Insight

Last week review: going into trade Nifty & Banknifty witness highest closing for July 2022 and short covering rally continued as Nifty crossed 17000 convincingly.

Back home, HDFC twins & BAJAJ twins did the fire work as result of both BAJAJ companies had positive surprise.  We are half-way down the Q1FY23 result season, so far, no major disappointment in results as expectation is down as compared to previous quarter.

Nifty range for this week 16691 to 17674 and Banknifty range for this week 36926 to 38448.  We expect upper end of the range to be tested later in the week as RBI MPC policy outcome on 5-Aug-22.

Fundamental Insight

US Fed have increased interest rate by 75 bps on 27-Jul-22 in-line with market expectation.  US Fed chair J Powell guided that in next US FOMC meeting on 21-Sep-22, decision on interest rate will be based on data.

Result season for Q1FY23 have not been disappointing so far, as market went into result season with very low expectation after debacle in Q4FY22 result season where market witness major sell-off.

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30-Jul-22 Fundamental & Technical Insight.pdf
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Daily Reports

Daily Report 29-Jul-22

US Fed decision of 75 bps rate hike and dovish commentary helped global market and aided by short covering, Indices gained from 0.84% to 1.87%.

US Advance Q2 GDP data came at -0.9%, in-line with market expectation.  US 10-year bond yield below 2.70%

Earnings season continue to provide momentum, AMAZON up by 12% & APPLE up by 3% were up after market hours as earnings better than estimate.

Approach on Indices: Indices approaching overbought zone as RSI is about to cross 70 on Nifty and already above 70 on Banknifty.  Some profit booking around 17200 on Nifty & 38000 on Banknifty expected.

Market View: FII long position at 57.38% as market start new series.  HDFC & SUNPHARMA will declare their result today.  We believe it is time to book part profit and reduce exposure as key event of US Fed decision & US GDP data are out.

SGX Nifty @ 17146.50 up 199.50 points at 8:25 AM

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29-Jul-2022-Daily-Report.pdf
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Daily Reports

Daily Report 27-Jul-22

5G Spectrum Auction: Telecom companies bid on day 1 to fetch 1.45 lakh crores.  700 MHZ band sees bids for the first time.

Wall street down as Wall Mart lowered profit guidance, Microsoft disappoints, ALPHABET is small miss – up around 3% in aftermarket.

US Fed decision today, Indian market will go into event positioning today and will react tomorrow along with F&O expiry.

VIX @ 18.17: bounce from below 17 level, ahead of US Fed event today.

Approach on Indices: Market will position itself for US Fed event, will react to it tomorrow along with expiry.  Any move is expected tomorrow, broad range seen at 16330 to 16622 till F&O expiry.

SGX Nifty @ 16479 up 3 points at 8:05 AM

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27-Jul-2022-Daily-Report.pdf
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Daily Report 26-Jul-22

Indian market ended the day with around half a percent cuts on Nifty & Sensex.  Banknifty remained flat.  Metal stocks were up ahead of TATASTEEL result.

VIX @ 17.68: as mentioned yesterday, VIX could revers from below 17 level.  Increase ahead of US Fed meeting & final F&O expiry.

Approach on Indices: We expect consolidation on Indices and expect Nifty to test 16330 & Banknifty to test 35985.  Any up move would be seen as short covering rally once Nifty is above 16678 & Banknifty above 36926.

Market View: SGX Nifty indicate flat to negative opening, Metal stocks will be in after TATASTEEL result.  BAJAJFINSV to consider bonus & stock split on 28-Jul-22.

HDFC twins & BAJAJ twins in focus for any potential short covering.

SGX Nifty @ 16608 down 10.5 points at 8:15 AM

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26-Jul-2022-Daily-Report.pdf
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Daily Report 25-Jul-22

Market will react to earnings of RELIANCE, ICICIBANK, KOTAKBANK & INFY.  Indian market closed on strong note on Friday going into event.

Result expectation of 4 major companies.

RELIANCE: expect to react negative.
INFY: expect to react positively.
ICICIBANK: Gap-up opening may later get sold into.
KOTAKBANK: Market expecting weak opening.

Market View: So far narrative have been, not so bad earnings, this will be on test after today’s reaction.  Can reduce position on rising market.  US Fed meeting outcome on 27-Jul-22 critical event.

SGX Nifty @ 16697.50 down 27.50 points at 8:40 AM

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25-Jul-2022-Daily-Report.pdf
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Weekly Reports

23-Jul-22 Fundamental & Technical Insight

Last week review: We expected this week, Indices to trade in narrow range, but once Nifty @ 16255 & Banknifty @ 35543 was crossed, Indices did witness sharp rally backed by short covering.

Cement stocks reacted positively on back of strong result from Ultratech cement and Banking stocks kept the momentum to record weekly gain of more than 5%.  ECB raised rates by 50 bps and guided for more rate hike.  Crude oil continues to trade near $100 which helped global sentiment.

Approach on Technical: Nifty @ 16622 & Banknifty @ 36422 / 35985 to act as immediate & strong support for intermediate support level.

Market View & Strategy

RELIANCE will have muted opening on Monday with negative bias.  Last week rally have surprised many participants.  FII turn buyer in cash segment as well covered its short position in F&O.  

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23-Jul-22 Fundamental & Technical Insight.pdf
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Research Report

Global Market – Looking beyond recession & US Fed

Global market has risen around 7% – 10% from lows made in June 2022, during this there are various factors which have triggered rally in bits and pieces on back of low conviction.  Today we will discuss few points with a view whether market is already looking beyond recent worries.

1) U.S. Gasoline Prices Fall To Two-Month Low With Pump Pain Easing
2) Housing Starts In U.S. Decline To Lowest Level Since September
3) Canada Inflation Quickens To 8.1%, Keeping Up Rate Pressure
4) Chinese Banks Hold Lending Rates As PBOC Remains Cautious
5) China’s Premier Signals Flexibility On Economic Growth Target
6) ECB Rushes To Tighten As Half-Point Hike Matched By Crisis Tool
7) German Economic Activity Unexpectedly Shrinks On Inflation
8) Powell Seen Slowing Fed’s Hikes After 75 Basis Points Next Week

Corporate earnings from Wall Street have been better than market estimate which have triggered risk-on sentiment across the asset class.  China’s supportive policy could help metal prices.  ECB rate hike by 50 bps last week have stopped deprecation of EURO against global currency.

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Global market – Market looking beyond recession & US Fed.pdf
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Daily Reports

Daily Report 22-Jul-22

ECB hikes rate by 50 bps, annual inflation rate in Euro Zone is at 8.6%.  EURO rises gained after ECB hikes.  Dollar Index cooled-off.

Crude Oil: Cooled off by $2 – $3, Russian President PUTIN hold talks with Saudi Arabia.  OPEC+ meets obligation to stabilize global oil market.

VIX @ 16.86: going into Final F&O expiry – indicate further short covering rally.  FII Long: Short exposure now stands at 40.19 : 59.81.

Approach on Indices: Indices rallied in last 4 days since last Friday is around 4%, any correction could be healthy.  Indices at point where short covering could trigger another 3% – 4% rally.

Market View: Global narrative have changed from recession fear and hike in interest rate to corporate earnings and so far, earning in US have resulted in positive trigger.  Going into this weekend – RELIANCE, ICICIBANK, KOTAKBANK & INFY will declare result.

SGX Nifty @ 16659.50 up 42 points at 7:40 AM

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22-Jul-2022-Daily-Report.pdf
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Daily Reports

Daily Report 21-Jul-22

Indian market: IT, Banks & Reliance & ONGC rally took Nifty above 16500 & Banknifty closed around 36000 level.

U.S. stocks ended higher on Wednesday with the tech-heavy Nasdaq booking a 1.6 % gain on positive earnings signals with a wary eye on inflation and more interest rate hikes by the Fed.

F&O Data – Weekly options expiry: Nifty PCR @ 1.40 & Banknifty @ 1.13.  OI build up seen on Nifty @ 16600 strike & Banknifty @ 36000 strike.

VIX @ 16.82: any reversal in trend needs to be watched out.

Approach on Indices: based on F&O data and rally in last 3 days, Nifty @ 16622 & Banknifty @ 36200 could be utilized to reduce position for short term trades.

SGX Nifty @ 16519 up 21.50 points at 7:45 AM

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21-Jul-2022-Daily-Report.pdf
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