Month: April 2023

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Daily Reports

Daily Repor 17-Apr-23

INFY result disappoints on all front – FY24 guidance – Revenue growth expected to be 4% – 7% and margin range at 20% – 22%.  INFY ADR down over 10% on Thursday & Friday.  Indian market will react today.

HDFCBANK result came below street estimate, capex remains key reason, other financial parameters were positive. 

VIX @ 11.91: expect to move towards 14 level. 

F&O data: FII continue to remain net buyer in index futures – bought 15791 contracts in index futures. Long: Short position now stands at 39.27%:60.73%.  

Approach on Indices: SGX Nifty around 80 – 100 points gap-down, Nifty @ 17474 & Banknifty @ 41079 could act as good entry level.

Market View: we expect profit booking across the market as market in last 2 weeks as rallied more than 5% – 7% on major indices.  Result season begins with negative surprise on IT sector and muted expectation on HDFCBANK.  Time to book profit and reduce exposure.

SGX Nifty @ 17786 down 85 points at 8:10 AM

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17-Apr-23 Daily-Report.pdf
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Research Report

Global Marke – Recession in US Makret later in 2023 & US Economic data

Global Market – Recession in US in later part of 2023 – US Economic data & Fed minutes

This week we will discuss US economic data and US Fed meeting minutes of 22-Mar-23 meeting and key economic data.  We will also discuss how market is factoring in next move by US Fed on 3-May-23 high interest rate remains key risk to economy and banking system.

US Economic data – released this week 10-Apr-23 to 14-Apr-23

Core CPI & Core PPI remains key worry for US Fed as service inflation which is normally connected to wages remains higher and it would take few more quarter for US Fed’s long-term target of 2% inflation.  As on 15-Apr-23, Fed fund rate monitor tool indicate 78% probability of 25-bps rate hike and yes, our view is contradictory to current indicator.

US Fed meeting minutes of 21 – 22 March 2023 – released on 12-Apr-23

Spillovers from the banking crisis that rocked the United States in March will push the country into a mild recession later this year, according to the minutes of the Federal Reserve Open Market Committee’s March meeting released on Wednesday.

Equichain Wealth Advisors: Market View & Opinion

We see inflation and economic activity will continue to remain soft, corporate earnings have started and will provide further cues.  Major US Banks – JP Morgan, Wells Fargo & Co, Black Rock, CITI Group & PNC Financial came out with their results and most of them beat market expectation yet US market was down as hope of pause by US Fed declines.  

We continue to believe, US Fed might pause on 3-May-23 meeting near term data shows uncertainty and we continue to believe US Fed will focus on data rather than earnings, which continues declining trend.

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Global Market – Recession in US in later part of 2023 – US Economic data & Fed minutes.pdf
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Weekly Reports

15-Apr-23 Technical & Fundamental Insight

Last week – review

In our last week review, upper end of target on Nifty was at 17799 & Banknifty at 41625.  Both indices manage to close above this level and major move came on back of US CPI & Core CPI data which came below expectation.  India’s CPI data came at 5.66% for March 2023, at 15-months low and below RBI’s tolerance level of 4% (+/- 2) this is range of 2% – 6%.

Technical Insight

• Nifty RSI @ 65.90 & RSI average @ 58.07.  Nifty recorded 9 continuous trading days of gains and around 1000 points rally from 16850 to 17840.

• Banknifty RSI @ 68.41 & RSI average @ 58.72.  Banknifty rallied from 39325 to 42132 without any major correction with only 10-Apr-23 ended with minor loss.  Banknifty rallied around 2800 points in 9 sessions

Approach on Technical: As Nifty closed above 17799 & Banknifty above 41625 – we see technical indicators has given fresh positive break-out.  But as Indices have rallied without any major correction or consolidation, any consolidation would be healthy.

Indices has rallied around 5% to 7% from 24-Mar-23 and is now within 5% – 7% of its fresh all-time high.   Technical indicate fresh positive uptrend but we expect correction / consolidation in 17th – 21st April 2023 week.

Fundamental Insight

1) CPI Inflation Falls To 15-Month Low Of 5.66% In March
2) India To See ‘Below-Normal’ Monsoon This Year: Skymet Forecast
3) OPEC+ Output Cut May Lead To Higher Oil Prices, Push Up India’s Import Bill: IEA
4) IMF Cuts India’s GDP Growth Forecast To 5.9% For FY24
5) India’s Forex Reserves Rise By $6.30 Billion To $584.75 Billion

Market View & Strategy

We continue to maintain bullish view and as mentioned last week, we have reduced exposure by 8% – 12% as Indices are near our upper end of the range that is Nifty @ 17799 & Banknifty @ 41625.

Strategy for this week would be to focus on stocks which has so far underperformed and has potential for fresh up move, IT to remain weak as TCS & INFY disappoints.  Banking stocks going into result with positive expectation could witness profit booking.

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15-Apr-23 Fundamental & Technical Insight.pdf
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Daily Reports

Daily Report 13-Apr-23

Wall Street failed to hold on to opening gains on lower-than-expected CPI data @ 5.0% Vs estimate of 5.1% – lowest CPI numbers since May 2021.  US Core CPI remains sticky @ 5.6% Vs estimate of 5.6%.

US Fed meeting minutes – Recent crisis in banking sector may lead to tight credit market conditions.  Interest rate projection remains unchanged.  US Fed members expect mild recent by 2023 end.

India’s CPI inflation data comes @ 5.66% for March – at 15-months low.  Current inflation figures are within RBI mandate range of 2% – 6%.

F&O data: another day of short covering by FII, net long addition in index futures at 18721 contracts, short position stands at 65.33%

Approach on Indices: We see indices near upper end of the range, consolidation from current level will be healthy.  Fresh long entry preferred on Nifty around 17479 & Banknifty around 40585.

SGX Nifty @ 17852 down 27.50 points at 8:05 AM

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13-Apr-23 Daily-Report.pdf
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Daily Report 12-Apr-23

US CPI & Core CPI data to be released today and US FOMC meeting minutes to be released today.

India ‘s CPI inflation data to be released today – estimate @ 5.80% Vs previous 6.44%.

HDFCBANK on 15-Apr-23 – to consider raising 50,000 crores during FY24 through perpetual debt instrument (part of AT1 capital).

TCS to declare result today after market hours & INFY on 13-Apr-23.

VIX @ 11.98: expect to increase to 14 level.

F&O Data: FII were net buyers by 24420 in Index futures including short position cover.  Net short position reduced to 60701 contracts which was at 138719 contracts at the end of 29-Mar-23.

Approach on Indices: Nifty @ 17799 & Banknifty @ 41625 are our target / resistance level, will require positive trigger to break above this level.  We expect some profit booking before this level are crossed.

SGX Nifty @ 17799 up 12 points at 8:25 AM

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12-Apr-23 Daily-Report.pdf
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Daily Reports

Daily Report 11-Apr-23

Wall Street had a quite session as extended holiday mood due to Easter holiday in all major European market.  Major set of economic data are due from 12-Apr-23, US CPI & Core CPI data & Fed minutes.

F&O data: FII continue to cove short position, net addition in index futures contract by 21138 on Monday, Net short position is now at 85121 contracts.

BITCOIN cross above $30,000 mark.  Gold continues to trade above $2000 mark.

VIX @ 12.27: expect to move towards 14.

Approach on Indices: Indices are showing some sign of fatigue at higher level and needs fresh trigger.  Nifty @ 17799 & Banknifty @ 41625 remain our next target level and expect some consolidation post this target levels are tested.

Market View: Going into trade on Tuesday morning with limited global cues ahead of key data due from tomorrow and result season to start with TCS to declare result from 12-Apr-23.

Stocks in Focus: KOTAKBANK, DLF, OBEROIRLTY & SBIN with positive view.  IT stocks could remain under pressure ahead of IT earnings from tomorrow.

SGX Nifty @ 17722.50 up 37.50 points at 8:05 AM

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11-Apr-23 Daily-Report.pdf
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Daily Report 10-Apr-23

Indian market rallied on surprise pause by RBI, but upside was limited as RBI Governor commented it as temporary pause and not pivot.  Weekly F&O options expiry has impacted closing.

Government approved revise pricing in natural gas pricing, revised down with upper & lower ceiling limit.  End consumer of gas will be beneficiary and inflation will be lower.

VIX @ 11.80: trading near lower end of the range.

Approach on Indices: SGX Nifty indicate around 50-points gap-up opening compared to Thursday’s closing.  Nifty range 17428 to 17799 and Banknifty range 40474 to 41625.

Market View: Retail data continue to show strength, latest business updates from TITAN indicate record positive year on year growth.  Market will continue to react to RBI policy which we believe was positive.

SGX Nifty @ 17705 down 11.50 points at 8:25 AM

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10-Apr-23 Daily-Report.pdf
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Weekly Reports

8-Apr-23 Technical & Fundamental Insight

Last week – review:

Going into trade in 3-trading day week & RBI MPC meeting outcome on & weekly options expiry on 6-Apr-23, we had positive view on market.  Market this week ended with around 1% – 1.5% gains, which is below our expectation.

Technical Insight

•Nifty previous top @ 17799 could act as resistance level.  Last correction from 17799 to 16828, Nifty closing above 17428 which is 61.8% retracement level could be considered as positive sign.
• Banknifty on Thursday face resistance around downward trendline at 41275, Banknifty is very close to 41625 level, once this level is crossed Banknifty could counter downward trend.

Approach on Technical: In last two weeks, Nifty gained 3.86% & Banknifty gained 4.18% compared to close of 24-Mar-23.  If we considered correction in downward trend, both indices are trading above its 61.8% retracement level of last fall.  

Nifty @ 17199 & Banknifty @ 39763 could now act as key support level if Indices are in uptrend.  We would consider Nifty around 17428 & Banknifty around 40500 as fresh entry level.

Fundamental Insight

1) Direct Tax Collections Meet Revised Target For FY23 At Rs 16.61 Lakh Crore
2) PNG, CNG Prices Set To Fall As India Links Domestic Gas Prices To Crude Basket

Market View & Strategy

Next week will be also 4-trading day week as 14-Apr-23 will be holiday due to Dr. Ambedkar Jayanti.  TCS will declare result on 12-Apr, followed by INFY on 13-Apr-23, likely after market hours.  Major set of US Economic data are due to be released next week, CPI Inflation data, FOMC meeting minutes, PPI data & Retails sales data. 

We will try and combine technical, incoming US Economic data and IT sectors result and if Indices manage to cross on Nifty above 17799 & Banknifty above 41625 it will open further upside to the tune of 2% – 4% by end of April.

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8-Apr-23 Fundamental & Technical Insight.pdf
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Global Market – OPEC+ nations announce surprise production cut & US Economic data

Global Market – OPEC+ nations announced surprise production cut & US Economic data

This week we will discuss OPEC+ nations decision to cut production starting from 1-May-23 and US Economic data which continues to show weakness in US Economy and important inflation data due in next week.

OPEC+ nation announce surprise production cut starting from 1-May-23

Production cut announced by OPEC + nations starting from 1-May-23 till end of the year is at 1.6 million barrels per day.  Here are the list of countries and production cut by countries by end of the 2023.

• Russia: 500,000 barrels per day (bpd)
• Saudi Arabia: 500,000 bpd.
• United Arab Emirates (UAE): 144,000 bpd.
• Kuwait: 128,000 bpd.
• Kazakhstan: 78,000 bpd.
• Algeria: 48,000 bpd.
• Oman: 40,000 bpd.

US economic data – due in 10 – 14 April 2023 week

In coming week from, starting from 12-Apr-23 when US CPI & Core CPI inflation data will be released, it will provide further cues and US FOMC meeting minutes to be also released on 12-Apr-23 followed by PPI & Core PPI on 13-Apr-23 and PPI & Core PPI on 14-Apr-23.

Equichain Wealth Advisors: Market View & Opinion

If we follow the pattern since SVB bank crisis started on 8th or 9th March 2023, most US economic data are coming below expectation and weak, even US Fed meeting on 22-Mar-23 increase rate by 25-bps but before these crises begins, market was expecting 50-bps rate hike.

We expect next week to be very critical as market reaction to weak economic data is sometimes positive as hope of pause or pivot increase and there is another side of the coin which is recession fear.

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Global Market – OPEC+ nations announce surprise production cut & US Economic data.pdf
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Daily Report 6-Apr-23

Wall Street ended mix as US economic data came weak.  ADP non-farm payroll data came at 145k Vs estimate 208k.  ISM Services PMI came at 51.2 Vs 54.3 estimate.

RBI MPC meeting outcome at 10:00 AM today, market expectation and factored in 25-bps rate hike.  RBI Governor comment will be key driver.

F&O data: FII net bought 31346 contracts in Index futures, build-up seen on options side.  Nifty PCR @ 1.39 Vs 1.15 previous, still below overbought zone.

VIX @ 12.41: could rise to 14 level.

Approach on Indices: as per our understanding, technical do indicate further upside on Nifty @ 17799 & Banknifty @ 41625 level.  Today being RBI MPC outcome & weekly option expiry – we expect decisive move post event.  We expect high volatility and seen Nifty range to be 17428 to 17799 & Banknifty range 40474 to 41625.

SGX Nifty @ 17592.50 down 32.50 points at 8:20 AM

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6-Apr-23 Daily-Report.pdf
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