Month: February 2023

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Research Report

Global Market – US Economic data & European market at fresh recent highs

Global Market – US Economic data & European market at fresh recent highs.

This week we will discuss how US economic data which came above market estimate, leading to rise in bond yield of US & Europe.  European market is trading at fresh recent highs on back of positive corporate earnings despite worrying of inflation and recession fear.

US Economic data

All major data this week in US came above market estimate, crashing hopes of any early pause or pivot by US Fed.

European Market at fresh recent high

Inflation in European nation remains high, economic concern are higher in Europe as compare to US and other parts of the world.  In our earlier article we have discussed European nations were heavily depending on Natural gas & Crude oil on Russia.  Europe was also dependent on China for other manufacturing goods.  

Equichain Wealth Advisors: Market View & Opinion

We believe, downside from current level is limited unless there is serious recessionary situation, market is prepared and factoring soft landing and in such circumstance.

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Global Market – US Economic data & European market at fresh recent highs.pdf
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Daily Reports

Daily Report 17-Feb-23

Wall Street closed lower as PPI & Core PPI data came above market estimate.  US 10-year bond yield @ 3.89 & Dollar Index above 104 indicate risk-off sentiment.

US economic data: PPI @ 6.0% Vs estimate @ 5.4%.  Core PPI @ 5.4% Vs estimate @ 4.9%.

European market at fresh 52-week high as inflation seen signs of cooling-off.

VIX @ 12.89: could increase to 14.

Approach on Indices: SGX Nifty indicate gap-down opening of around 80 – 100 points.  Nifty could test 17856 & Banknifty could test 41000 to 40817 on lower side.  Technical chart indicates narrow movement & VIX around 13 – 14 could find buying at support level.

Market View: no big move seen on either side, we continue to focus on stock specific story in Mid-cap & Small-cap segment.  With lack of positive trigger, upside for overall market remains limited.

SGX Nifty @ 17974 down 94 points at 8:15 AM

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17-Feb-23 Daily-Report.pdf
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Daily Reports

Daily Report 16-Feb-23

Wall Street manage to recover its early loss from strong retails & Core retail sales data.  NASDAQ was up 0.92% as tech stocks rallied.  

US Economic data: Retail sales actual @ 3.0% Vs estimate @ 1.9%.  Core retail sales @ 2.3% Vs estimate @ 0.9%.  Empire state manufacturing index: Actual @ -5.8 Vs estimate @ 18.2.

Strong US Economic data is equal to more tight monitory policy. Market reaction to strong economic data is surprising as market is now factoring continuation of tight monitory policy by US Fed.

VIX @ 12.86: VIX below 13 could support short covering rally.

Approach on Indices: SGX Nifty indicate opening around 18100 and Banknifty around 42000 level, weekly options expiry could play its role.  Technical setup showing strength for more upside.

SGX Nifty @ 18099 up 78.50 points at 8:30 AM

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16-Feb-23 Daily-Report.pdf
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Daily Reports

Daily Report 15-Feb-23

Wall Street ended volatile session with minor cuts, turning into green & red with more than 2% difference during the day as inflation data remains mix.

US CPI actual @ 6.4% Vs estimate of 6.2%, previous @ 6.5%.

US Core CPI actual @ 5.6% Vs estimate of 5.5%, previous @ 5.7%.

F&O data: FII covered short in index futures, net long by 41077 contracts yesterday.  Nifty PCR @ 1.16 Vs 0.83 previous.

VIX @ 13.45: continue to indicate low volatility & range bound.

Approach on Indices: SGX Nifty indicate muted opening around 50 – 70 points down, Indices will open around 20-DMA, yesterday’s chart closing shows positive setup but again likely to failed to get follow through move.  Indices continue to remain in narrow range.

SGX Nifty @ 17874.50 down 53 points at 8:05 AM

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15-Feb-23 Daily-Report.pdf
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Daily Reports

Daily Report 14-Feb-23

India’s inflation @ 6.52% Vs expectation of 6.1%.  High inflation could put some pressure on India’s 10-year bond yield & Banking stocks.

F&O data: FII long: short exposure at 17.94%:82.06%.  Nifty PCR @ 0.83 Vs previous 1.05.  Banknifty PCR @ 0.66 Vs 0.87 previous.  F&O data do indicate oversold zone and any positive trigger could lead to short covering.

VIX @ 13.68: could move above 14.

Approach on Indices: Indices continue to face resistance around 20-DMA on Nifty @ 17862 & Banknifty @ 41588.  Major rally could be expected once this level is cleared convincingly.  Indices expected to be in narrow range ahead of US CPI & Core CPI inflation data.

Market View: Going into trade today, SGX Nifty indicate flat opening ahead of key data from US tonight.  We believe inflation trend would continue to come lower, but market trend remains weak.  Market trend remain mix and F&O data indicate in oversold zone.

SGX Nifty @ 17807.50 up 18.50 points at 8:35 AM

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14-Feb-23 Daily-Report.pdf
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Daily Reports

Daily Report 13-Feb-23

Wall Street ended flat, NASDAQ was down 0.61% as US bond yield above 3.6% on Friday and currently above 3.73%.

Crude oil is trading higher after Russia announce to cut production by 500,000 bpd from March 2023, in response of price cap announce by US & Europe nations.

IIP for December 2022 @ 4.3% compared to 7.3% in November 2022.  India ‘s CPI data to be released today, expectation @ 5.90%.

US CPI & Core CPI data due to be released today.

VIX @ 12.74: Lowest level since Budget. 

FII F&O data: Long @ 17.75% & Short @ 82.25%.  

Approach on Indices: Indices likely to trade in narrow range, currently trading 20-DMA on Nifty @ 17871 & Banknifty 20-DMA @ 41642.

SGX Nifty @ 17849 down 28 points at 8:20 AM

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13-Feb-23 Daily-Report.pdf
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Research Report

Global Market – Crude Oil, German bond yield & US Economic data

Global Market- Crude oil, German bond yield @ 2.34% and US Economic data.

This week we will discuss rise in crude oil, German bond yield above 2% and also seen rise in US bond yield.  This week key US Economic data are CPI & Core CPI inflation data, Retail sales & PPI & Core PPI data.

1) Russia plans to cut its oil output by 500,000 barrels a day from March 2023
2) Oil May Hit $100 Amid China Reopening, Iran’s OPEC Official Says

German 2-year yields touch the highest since 2008.

Increase in Germany bond yield shows sign of rising concern as inflation remains a major concern in near term.  EURO zone is behind the curve as far as raising interest rate is concern compared to US Fed & BOE.  Further tightening of bond yield could be negative for equity & other risk-on asset class.

Equichain Wealth Advisors: Market View & Opinion

In speech this week US Fed chair Jerome Powell reiterated the need for couple of 2 more rate hike before pause and maintain high interest rate for some period of time.  Inflation would continue its downtrend where as any major disappointment in retails sales could negative for market.

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Global market -Crude Oil, German bond yield & US Economic data.pdf
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Weekly Reports

11-Feb-23 Technical & Fundamental Insight

Last week – review

As expected, volatility reduced significantly compared to last week which was highly eventful due to budget and central bank’s meeting.  RBI MPC increase rate by 25-bps by 4-2 count, 2 members in favour of less or no rate hike.  ADANI group stocks continue to remain volatile as MSCI reduce weightage on 4 ADANI group stocks.

Approach on Technical: Indices this week has been trading around 20-DMA and narrow range, we expect clear trend in next week.

Nifty above 17897 & Banknifty above 41999 could open upside on Nifty to 18201 & Banknifty could test 43078.  Indices could see major downside risk only if Nifty breaks 17593 & Banknifty below 40861.  Our strategy would be play on long side above Nifty @ 17897 & Banknifty above 41999 break-out convincingly. 

Fundamental Insight

1) RBI MPC hikes rate by 25-bps – Decision by 4 – 2 in favour of rate hike
2) IIP: India’s Industrial Output Expands 4.3% In December
3) India’s Forex Reserve Drops $1.49 Billion To $575.27 Billion
4) MSCI Changes Free Float Of Four Adani Companies

Market View & Strategy

We would continue to follow strategy to keep exposure around 65 – 75% and would do further allocation in coming weeks on positive sign.  Currently market is trading in narrow range where fresh cues will be critical to provide positive or negative trigger.  This week would focus on US economic data which are trending downwards.

Union finance budget is positive for market, but sentiment was turned negative due to ADANI group stocks and global uncertainty.  We do not expect any major directional move on either side as quarterly result are in-line with no major surprise.  We would wait for upcoming data to continue to remain optimistic.

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11-Feb-23 Fundamental & Technical Insight.pdf
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Daily Reports

Daily Report 10-Feb-23

Wall Street was down by 0.73% to 1.02%, ALPHABET slips in trade as AI chat boat concern and US 2–10 years yield curve inverted by 85-bps points indicating fresh economic worries.

MSCI review: weightage reduce in select ADANI group stocks, changes effective will be 28-Feb-23.  ADANIENT, ADANITOTAL, ADANITRANS & ACC sees FIF factor reduction.

MSCI global standard index: BANKBARODA & CGPOWER added and BIOCON removed.

VIX @ 13.04: within comfortable level.

Approach on Indices: Indices broadly trading in range, today’s indictive opening is around 80 – 100 points gap-down.  Indices today could accelerate downside momentum as trade setup remains weak. 

Market View: market failed to build on any positive news or positive momentum.  Current trend do indicate mix cues with negative bias.  We would prefer to wait and use any rally to reduce position.

SGX Nifty @ 17835 down 95.50 points at 8:20 AM

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10-Feb-23 Daily-Report.pdf
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Daily Reports

Daily Report 9-Feb-23

Wall Street ended down by 0.61% to 1.68% on profit booking and ALPHABET plunges by 7.7% after AI chatbot Brat delivered incorrect answers.

RBI increase repo rate by 25-bps, highest in last 5-years.  RBI still concern over sticky core inflation, further calibrated monitory policy action warranted to keep inflation expectation anchored.

MSCI to review weightage of ADANI group stocks as free float to be recalculated.

VIX @ 13.60: indicate possibility of short covering.

Approach on Indices: Indices likely to trade in narrow range and volatility could reduce further however, due to weekly options expiry market could see some expiry related volatility.

SGX Nifty @ 17902 up 12 points at 8:05 AM

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9-Feb-23 Daily-Report.pdf
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