Month: April 2023

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Daily Reports

Daily Report 5-Apr-23

Wall Street rallied on Monday and gave up some gains on Tuesday on weak JOLTS Jobs openings data as recession fear mounts.  JOLTS Job opening came at 9.93M Vs expectation of 10.49 M.

Govt removed windfall tax of domestic crude, cut by half on diesel exports.  Positive for oil refineries, RELIANCE & ONGC could react positively.

US 10-year bond yield @ 3.53 & Dollar Index @ 101.24, Gold trading at $2040 level indicate US Fed might soon signal pause in rate hike.

VIX @ 12.58: could increase to 14 ahead of RBI event tomorrow.

Approach on Indices: Indices in near term could be in over-bought zone, Nifty range seen 17199 to 17490 & Banknifty range 40201 to 41310 for today & tomorrow, RBI MPC meeting outcome and weekly options expiry tomorrow.

Market View: HDFCBANK, BAJFINANCE will react to quarterly business updates – expect positive move.  RELIANCE & ONGC expect to react positive to withdrawal in windfall tax.  IT stocks expected to remain under pressure on weak US economic data.

RBI MPC meeting expected to increase 25-bps rate hike and signal pause on further rate hike.

SGX Nifty @ 17515.50 compared to 17474.95 (Monday’s close).

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

Daily Report 3-Apr-23

On Friday, first trading day for new F&O series and new financial year closed with healthy gains of around 1.75%, managing Nifty & Banknifty to end March month on a positive note.

GST collection for February 2023 comes at 1.60 lakh crores, average monthly collection for FY 22 – 23 comes at 1.51 lakh crores.

OPEC + nations in a surprise move announced production cut by 1.16 million barrels per day, duking the prior expectation to maintain output.  WTI Crude oil & Brent Crude oil up by $5.

VIX @ 12.94: expect to move higher ahead of RBI meet on 6-Apr-23.

F&O data: FII long: short position remains at 11:20%:88.80%.  Net position remains 29% short.  Nifty PCR @ 1.27 Vs 1.05 previous.   Banknifty PCR @ 1.23 Vs 0.94 previous, indicate mild overbought.

Approach on Indices: Market on technical is better placed compared to last 3 weeks, any correction / consolidation could be utilize as buying opportunity.  Nifty @ 17314 & 17199 and on Banknifty 40142 & 39781 levels to add fresh long position.

SGX Nifty @ 17445 up 27.50 points at 8:05 AM

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

Global Market – US Fed Balance Sheet & US Economic data

Global Market – US Fed balance sheet and US economic data

This week we will discuss increase in  US Fed balance sheet due to emergency funding and what are its implication on sentiment and its actual path of monitory tightening.  US bond yield indicate soft monitory policy in futures.

US Fed balance sheet @ $ 8.73 trillion – as on 20-Mar-23

Recent increase in US Fed balance sheet could be considered as emergency funding rather than expansion of US Fed balance sheet which can be defined as change in monitory policy.   This can be early sign of pause or pivot by US Fed but confirmation from US Fed is awaited.

US Bonds – Gap between 2-year / 10-year currently @ 60-bps

In February 2023 end there was gap of 100-bps, which was indicative of trend reversal and high probability of recession.  Recent crisis in US & Europe banking system was due to distress selling in bond as higher interest rate impacted the regional banks.

Equichain Wealth Advisors: Market View & Opinion

Is financial crisis in US & Europe is over or not, it will be too early to judge as in next two weeks, quarterly earnings and US economic data will provide better clarity.  

This week, there was no fresh negative news and market has witness relief rally.  We continue to believe high probability of pause or pivot on or before next US Fed meeting on 3-May-23 and market will preempt from US Economic data & quarterly earnings season.

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Global Market – US Fed Balance Sheet & US Economic data.pdf
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Categories
Weekly Reports

1-Apr-23 Technical & Fundamental Insight

Last week – review

No fresh bad news this week was good news for market as clam returns in global market.  We did maintain Nifty @ 16669 & Banknifty @ 37387 could be bargain buying level, but Indices bounced back without testing this level.  Nifty above 17202 & Banknifty above 40201 has witness sharp rally on Friday.

Technical Insight

• Nifty correction from 17799 to 16828 – next resistance / target level comes at 17428 (61.8% retracement) & 17799 (100% retracement ) level.  Nifty @ 17199 & 16981 could act as support level.
• Banknifty @ 39781 could act as strong support level.  Banknifty could test 41400 – 41700 range on upper end this week.

On upper end Nifty could test 17799 and Banknifty could test 41671 level this week and would act as strong resistance level.  Nifty range 17201 – 17799 & Banknifty range 39781 – 41671 for 3-trading day week.

Fundamental Insight

1) Government To Borrow Rs 8.88 Lakh Crore In First Half Of FY24
2) India’s Eight Core Industries Grow 6% In February, The Slowest In Three Months
3) India’s Current Account Deficit Narrows To 2.2% Of GDP In Q3 FY23
4) Government Exceeds FY23 RE Target Of Combined Disinvestment, Dividend Mop Up
5) Government Announces Small Savings Interest Rate Hike For First Quarter Of New Fiscal
6) Fiscal Deficit Till February At 83% Of Full-Year Target

Market View & Strategy

Global interest rate has been increased since March 2022 and this rate hike cycle is one of the steepest paces of hike, but now there are enough indicator to believe that we are near to end and global central banks has refused to comment on future rate hike, keeps door open for pause or pivot.  Any official confirmation of pause or pivot will be bullish for risk-on sentiment.

Going into trade for 3-Apr-23 to 6-Apr-23, 3-trading day week with RBI MPC meeting outcome on 6-Apr-23, we expect high volatility with positive bias.  We maintain positive view on market with expectation of Indices to test upper end of the range mentioned in technical view ahead of quarterly earning season which could begin from 2nd week of April 2023.


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1-Apr-23 Fundamental & Technical Insight.pdf
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