Month: March 2023

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Daily Reports

Daily Report 20-Mar-23

Wall Street was down around as Banking challenge continues, FRC continues to end at lower level despite unsecured $30 billion deposit.  Credit Suisse impacted market fall on Friday.

UBS to buy Credit Suisse 3 billion Swiss Franc ($3.23 billion) and assume $5.4 billion in losses in a deal backed by Swiss National Bank guarantee.

FED, ECB, SNB, BOE, BOJ, AND BOC announce coordinated central bank action to enhance liquidity via USD-swap line.

VIX @ 14.77: need to turn cautious above 16 level.

F&O data: Nifty PCR @ 0.88 Vs 0.67 previous.  Banknifty PCR @ 0.72 Vs 0.53 previous.  FII Long: Short in Index futures 10.19%:89.81%.

Approach on Indices: We believe its time to focus on VIX, fresh move on VIX above 16 level, need to hedge position going into US Fed event on 22-Mar-23.  Nifty @ 16669 & Banknifty @ 37386 are extreme low level to watch out for this week.  

SGX Nifty @ 17063 down 99 points at 8:10 AM

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20-Mar-23 Daily-Report.pdf
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Research Report

Global Market – Will US Fed signal pause on 22-Mar-23 – US Fed meeting

Global Market – Will US Fed signal pause on 22-Mar-23 – US Fed meeting

This week we will focus on US Fed meeting outcome on 22-Mar-23.  Market participants will be watching closely as crisis has impacted few US regional banks and European banks.  ECB raised rates by 50-bps on 16-Mar-23, but scrapped future guidance as situation is still evolving.

US Fed balance sheet increase by $300 billion to $8.69 trillion from $8.39 trillion

• $152.85 billion – Discount borrowing window
• $164.80 billion – Banks borrowing from US Fed.

US regional bank (FRC) First Republic Bank – Big US banks deposit $30 billion deposit

• JPMORGAN, Citibank, Bank of America, Wells Fargo each making a $5b uninsured deposit into FRC
• Goldman Sachs and Morgan Stanley each depositing $2.5b
• BNY-Mellon, PNC bank, state street, U.S. bank each deposit $1b

Equichain Wealth Advisors: Market View & Opinion

Last week, probability of 50-bps rate hike by US Fed on 22-Mar-23 was more than 75% after US Fed chair Jerome Powell testimony, lots of things have changed in last 1 week.

Since last week financial crisis in US & Europe is evolving and now is fearing more negative surprise from US & European banks.  We continue to believe that US Fed meeting outcome on 22-Mar-23 will be very important and crucial for market.  After this week’s event we have turn cautious as this financial crisis could trigger domino effect unless properly addressed by US Fed.

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Global Market – Will US Fed signal pause on 22-Mar-23 – US Fed meeting.pdf
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Weekly Reports

18-Mar-23 Technical & Fundamental Insight

Last week – review

Last we have turned cautious as financial crisis triggered by SVB was evolving, last week regulator closed 3 banks – SVB, SILVERGATE BANK & SIGNATURE BANK.  Indian IT & Banks were major looser this week.  We focused on VIX this week, VIX closed above 16 for 3 days this week and we believe its time to remain cautious.

Approach on Technical: last week we did mention that when news flow leads the market movement, technical take back seat.

Nifty @ 16747 / 16669 & Banknifty @ 37386 / 37247 are likely to be tested on lower side and act as important support level.  

Nifty @ 17546 / 17565 & Banknifty @ 39970 could act as resistance this week.  VIX closed below 16 on Friday, however if VIX moves above 16 next week – its time to turn highly cautious and expect sharp fall as we are heading into important week of trade.

Fundamental Insight

Financial crisis continues to US ‘s regional banks – FIRST REPUBLIC BANK and Europe ‘s Credit Suisse banks was supported by Swiss National Bank of 50 billion Swiss Franc.

• Japan Finance Ministry, BOJ Ready To Respond On Bank Sector Woes
• Goldman Raises US Recession Probability To 35% On Banking Stress
• Turmoil Means ECB Will Finally Set Rates One Meeting At A Time

Market View & Strategy

We see financial crisis could have downside in near term as global news could trigger panic selling in near term.  During next week we could find opportunity to reduce exposure by 5% to 25% based on news flow or could hedge portfolio if find necessary.  

What could be bargain buying level – Nifty @ 16669 & Banknifty @ 37247 are the level we believe are good bargain buying entry level with positional view.  Any speculative position, we would prefer to have complete hedge position as we anticipate highly eventful next week or 2 weeks going into financial year end.

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18-Mar-23 Fundamental & Technical Insight.pdf
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Daily Reports

Daily Report 17-Mar-23

Wall Street rallied as Bank of America, JP Morgan lead banks group infuse $30 billion in First Republic.  After this move, US regional banks rallied.

ECB hikes rate by 50-bps, ECB does not provide any guidance for future rate action, guided it to be incoming data driven.   

ECB monitoring current market situation closely and stands ready to respond as necessary to preserve price stability and financial stability.

F&O data: Nifty PCR @ 0.88 Vs 0.67 previous.  Banknifty PCR @ 0.72 Vs 0.53.  FII net short by 165,534 contracts in index futures.  Net long: short position remains at 11.27%:88.73%.

Approach on Indices: SGX Nifty indicate 100 points positive opening, F&O data & technical indicate – Indices are in oversold zone.  Any trigger could provide major short covering rally.

SGX Nifty @ 17132.50 up 110 points at 7:55 AM

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

Daily Report 16-Mar-23

Wall Street open weak of Credit Suisse fear of default, US market recovered on news of  Credit Suisse will borrow $54 billion from Swiss National Bank liquidity facility.

India’s trade deficit narrowed to 13-months low in February 2023 @ $17.43 billion Vs $17.75 billion deficit in January 2023.

SGX Nifty recovered around 200 points from yesterday’s low indicating flat opening.  F&O data indicate – market in highly oversold zone.

VIX @ 16.30: closed above 16 level for 3 days continuously.

F&O Data: Nifty PCR @ 0.67 Vs previous 0.69.  Banknifty PCR @ 0.53 Vs 0.59 previous.  FII net long in index futures stands at 11.87%.

Approach on Indices: Technical & F&O data indicate market is in oversold zone at the same time indices trading below all important support level.

Market View: Lower crude oil prices & crisis in US & European bank will have limited direct impact on India, we believe recent market fall is more driven by sentiment.  We believe its time to deploy some fund with a conviction on India’s story.

SGX Nifty @ 17001 up 25 points at 8:25 AM

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

Daily Report 15-Mar-23

Wall Street recovered by 1.06% to 2.14% as CPI & Core CPI inflation data came in-line with market expectation.

US CPI inflation data @ 6.0% Vs estimate of 6.0%, previous @ 6.4%.

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

F&O Data: Nifty PCR @ 0.69 Vs 0.71 previous.  Banknifty PCR @ 0.59 Vs 0.51 previous.  FII net long @ 13.26% in Index futures.  F&O data indicate highly – market is in highly oversold zone.

Approach on Indices: Indices are due for technical bounce, supported by global cues.  Nifty @ 17255 & Banknifty @ 39970 now could act as resistance zone.

SGX Nifty @ 17203.50 up 92 points at 8:05 AM

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

Daily Report 14-Mar-23

Wall Street ended flat in a volatile session as FIRST REPUBLIC was down 60%, WESTERN ALLICANCE down by47% & BANCORP & PACWEST down by 21.05%.

India’s CPI data came @ 6.44% Vs estimate of 6.25% & 6.52% in January.  Core CPI remain @ 6.23% Vs 6.28% previous month.

US Economic data due today: CPI & Core CPI data.  

F&O data indicate highly oversold zone.  Nifty PCR @ 0.71 Vs 0.89 previous & Banknifty PCR @ 0.51 Vs 0.66 previous.  FII Long :Short position is at 15.92% : 84.08%.

VIX @ 16.22: above comfortable level.  Expect high volatility.

Approach on Indices: Technical & F&O data indicate highly oversold zone; any short covering rally could face selling pressure as technical has turned weak.  

SGX Nifty @ 17235 up 56 points at 8:25 AM

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

Daily Report 13-Mar-23

US Fed and regulator announced that all depositors will have access to all money on Monday.  Regulator weighing bailout of all unsecured SVB depositors to prevent “Banking Panic”

DOW Futures is currently 400 points up and could witness relief rally on Monday as major shift expected in tight monitory policy.

VIX @ 13.41: turn more cautious if VIX goes above 16.

Approach on Indices: At times when news flow dominates market sentiment technical take a back seat and we believe this time to focus on VIX.

Market View: We would avoid any panic selling and its time we expect short covering rally as supported by news by US Fed.  There will be skepticism still in the market as any rally will likely to get sold into.   We would avoid making any hasty decision at this time and stick to good stocks with better earnings visibility.

SGX Nifty @ 17466 up 28.50 points at 8:25 AM

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

Global Market – Powell’s testimony, BOJ Meeting outcome & SVB collapse

This week we will discuss US Fed chair Jerome Powell testimony, BOJ Meeting outcome and its commitment to maintain ultra-accommodative policy and collapse in (SVB) Silicon Valley Bank on Thursday after reporting $1.8 billion loss on bonds to meets client’s cash demand.

Bank of Japan – Policy outcome & Statement

• BOJ kept interest rate unchanged at -0.10% Vs estimate of -0.10%
• The Bank will purchase a necessary amount of Japanese government bonds (JGBs) without setting an upper limit so that 10-year JGB yields will remain at around zero percent.
• JGB yield curve control maintain at -0.50% to 0.50%

Silicon Valley Bank – SVB Financial Group (SIVB)

On Friday as on 7:35 PM IST, trading halted @ $39.40 down 62.84% in a pre-open market.  On Friday, regulator shut down SVB financial group, regulator appoint FDIC as received and deposit to be secured through FDIC – Federal Deposit Insurance Corporation.

Equichain Wealth Advisors: Market View & Opinion

We continue to maintain our view as on last week as now there is added challenge for US Fed as SIVB issue is still evolving.  US Fed post meeting conference will and guidance of future action will be an important event as more hawkish US Fed will challenge economic activity which is already showing signs of slowdown.  Key challenge for US Fed will be to manage soft landing.

US Treasury Janet Yellen closely monitoring situation as SVB financial group shutdown by regulator and it could impact other banking system.  SVB is the largest failure since 2008.  We remain cautious as situation is evolving and early pause or pivot could be very much possible as we mentioned in our Repeat of August 2007 – January 2008 phase.

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Global Market – Powell’s testimony, BOJ Meeting outcome & SVB collapse.pdf
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Weekly Reports

11-Mar-23 Technical & Fundamental Insight

Last week – review

We went into trade this week with bullish view and preferred to deploy fund fully with a bullish view and if we exclude Friday’s fall which was triggered by SVB financial group turmoil seen on Thursday after its plan to raise emergency capital by $2.25 billion & loss on bond portfolio by $1.8 billion.

Wall Street ended this week with cut of around 4.5% on major indices, out of which major decline was seen on Thursday & Friday as SVB financial group collapse.  

Approach on Technical: market technical are turning weak based on news from global market.  At times when news flow dominate market sentiment technical take a back seat and we believe this time to focus on VIX.  

This week onwards we would focus more on VIX and move on VIX above 16 would turn cautious.  Nifty @ 17255 & Banknifty @ 39600 could act as strong support level, once this level is broken market could see sell-off due to panic selling to news flow from SVB financial group and banking stocks in US & Globally could turn cautious.  

Time to turn cautious & turn extra cautious once VIX cross above 16 level.

Fundamental Insight

• Reserve Bank of Australia increase rate by 25-bps to 4.60% Vs estimate of 4.60% & previous 4.35%.
• Bank of Canada kept key interest rate unchanged at 4.50% Vs estimate of 4.50%.
• US Fed chair Jerome Powell testifies – expect appropriate pace of ongoing rate hike.
• Fed fund rate monitor tool indicate 50-bps rate hike at 76% probability.  However by the
Friday’s closing probability of 50-bps rate hike moved down to 40.2%.
• RBI Weekly bulletin: Deposit growth @ 10.1% & Credit growth @ 15.5% as on fortnight ended 24-Feb-23.
• Four largest banks in US: lost $47 billion in collective valuation.

Market View & Strategy

We have been fully invested and deployed around 95% to 100% fund.  We would reduce exposure as near term market correction could trigger another round of sell-off which could be in range of 3% to 5%.  

Biggest fall bring opportunity for bargain buying, as we seen in past any financial crisis could change the path of central bank’s existing policy which is currently hawkish as recently guided in testimony by US Fed chair Jerome Powell.  

Any reason to be bullish – we believe US Fed would pivot in near term which could change dynamics. 

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11-Mar-23 Fundamental & Technical Insight.pdf
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