Month: July 2023

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Daily Reports

Daily Report 31-Jul-23

Wall Steet had another positive session with NASDAQ gain by 1.90% as tech stocks did well.  DOW30 was up by 0.50% & S&P500 was up by 0.99%.

China Seeks to Boost Consumption to Spur Economy’s Recovery – China’s economic data continues to remain weak as Chinese government continue to focus on economic revival since beginning of 2023.

Metal & Chemical stocks will be focus as China’s is expected to announce fresh set of measures to boost economy.

F&O Data: FII net long position in index futures by 13814 contracts, FII reduced 19427 contracts in index futures.  Nifty PCR @ 0.82 Vs 0.90 & Banknifty PCR @ 0.74 Vs 0.70.

Approach on Indices: Nifty @ 19478 & Banknifty @ 45219 could act as important support level and indices remain in uptrend till these levels hold.

Market View: We would focus on Metal stocks, Defense stocks for fresh allocation.  PSU’s where Q1FY24 earnings is pending could provide fresh entry opportunity.

GIFT NIFTY @ 19785 Vs 19751 Nifty future pre close.

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31-Jul-23 Daily-Report.pdf
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Research Report

Global Market – U.S. Fed meeting outcome & BOJ Policy outcome

Global Market – U.S. Fed meeting outcome & BOJ Policy outcome

This week we will discuss U.S. Fed meeting & Bank of Japan policy outcome.  U.S. Fed increase rate by 25-bps to 5.25% to 5.50% is highest in 22 years and further tightening not ruled out.  Bank of Japan continue to maintain ultra-low interest policy and continue with its QE and manage JGB yield between -0.50% to 0.50%.

U.S. Fed hike rate to 22-year high, keeps door open for further rate hike

The Federal Reserve resumed raising interest rates and Chair Jerome Powell left open the possibility of further hikes, which he emphasized will depend on incoming data that has recently signaled a resilient US economy.

Bank of Japan policy decision outcome

The key move that jolted markets was the BOJ’s switch to a more flexible approach on bond buying. The bank turned its heavily defended yield cap into little more than a yardstick. The BOJ will now allow movements beyond 0.5%, further diluting the meaning of a 0% target aimed at stimulating the economy and prices.

Equichain Wealth Advisors: Market View & Opinion

Global market continues to focus on U.S. Fed and BOJ which are currently adopting contrarian policy approach.  U.S. Fed continue to raise rates and keep door open for further rate hike while BOJ keeps rate ultra-low and but however, they may allow JGB yield to move up to 1%.

We would continue to focus where we see risk arising out of tight monitory policy.  Globally inflation seen softening.  Global monitory policy shift to downward trajectory will provide fresh trigger to risk-on sentiment whereas further tightening would lead to risk-off.

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Global Market – U.S. Fed meeting outcome & BOJ policy outcome.pdf
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Weekly Reports

29-Jul-23 Technical & Fundamental Insight

Last week – review

Market started this week with cues from RELIANCE, KOTAKBANK & ICICBANK result.  Technical setup does indicate some pause and market this week after brief consolidation have seen correction. Market corrected on Thursday & Friday making indices to close with minor loss on weekly basis.

Technical Insight

• Nifty rally from 18646 to 19991, retracement @ 38.2% comes @ 19478 & 61.8% comes at 19160.  Nifty below 19478 could test 19160 level and Nifty above 19861 could resume fresh uptrend.

• Banknifty rally from 43541 to 46256, retracement @ 38.2% at 45219 was tested on Friday, further correction could test 44578.  Banknifty above 45841 could resume positive trend.

Approach on Technical: Indices after all most 16% -18% rally in last 3 – 4 months is showing some sign of weakness on charts.  Indices have witness sideways consolidation during this rally and we may continue to see that trend.

Nifty @ 19478 & Banknifty @ 45219 are 38.2% retracement level of their recent rally.  Any weakness could trigger correction up to 61.8% retracement level on Nifty @ 19160 & Banknifty @ 44578.  We assume that uptrend will resume once Nifty @ 19841 & Banknifty @ 45927 is crossed.

Fundamental Insight

1) India GDP To Grow 6-6.3% In FY24, Economic Prospects Brighten: Deloitte India
2) Surging India Prices May Keep RBI on Extended Pause, IMA Says
3) IMF Raises India’s GDP Forecast To 6.1% For FY24

Equichain Wealth Advisors: Market View & Strategy

During the last few weeks, we have maintained our strategy to participate in this rally with keeping exposure around 70% to 85% and some allocation towards defensives.  We would prefer stock rotation while keeping exposure at same level and we continue to maintain our strategy.  This week we would focus on defense stocks, telecom & PSU where result is awaited.  Any correction would provide fresh view on market to deploy fund available with us. 

Buying keeping allocation at 70% – 85% in last few weeks, we have managed to perform in-line with index and any we would deploy fresh fund on correction as we believe market will continue to correct and have stock specific approach.

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29-Jul-23 Fundamental & Technical Insight.pdf
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Daily Report 21-Jul-23

Wall Street: TESLA & NETFLIX was down after result, NASDAQ & S&P500 ended down by 2.05% & 0.68% respectively.  DOW30 ended in green with 0.47% gains.

INFY Q1FY24 result in-line with estimate, revised revenue guidance downward to 1% – 3.5% from earlier 4% – 7%.  INFY ADR down by 8.5% overnight, expect to open with deep cuts.

RELIANCE will come out the result today.  LT result on 25-Jul-23 will consider Buy-back and special dividend and record date for same will be 2-Aug-23.

F&O data: FII added 11091 contracts in index futures, net long position for FII is now above 1 lakh contracts in index futures, net long position now stands at 70.68%.

Approach on Indices: GIFT Nifty indicate down opening due to INFY & other IT stocks could remain under pressure, Nifty @ 19697 & Banknifty @ 45110 could act as support level in case of any correction.  Banknifty will continue to outperform.

GIFT NIFTY @ 19880 Vs 19967 Nifty future previous close at 8:05 AM

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21-Jul-23 Daily-Report.pdf
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Daily Reports

Daily Report 20-Jul-23

Wall Street had muted session with minor gains as corporate earnings continues to boost sentiment, TESLA Q2 result beat margin despite price cut.  NETFLIX was down reacting to result.

RELIANCE & JIO Financials to trade at separate entity from 20-Jul-23.  Price discovery session from 9:00 AM to 10:00 AM.  Cost of acquisition for Reliance Ind @ 95.32% & RSIL @ 4.68%, values RSIL @ 132.98*

HINDUNILVR & INFY will announce Q1FY24 result today.  INFY expected to declare result after market hours, stock will react to its number tomorrow.

F&O data: FII were net seller in index futures by 3464 contracts, net long position remains above 70% currently at 70.20%:29.80%.  Nifty PCR @ 1.34 Vs 1.34 remains unchanged.  Banknifty PCR @ 1.12.

Approach on Indices: Indices continue to make fresh high now on daily basis and Nifty is in unchartered territory and heading towards 20000 historic level.  With weekly options expiry Nifty @ 19800 & Banknifty @ 45500 will be in focus.

GIFT NIFTY @ 19830 Vs 19847 Nifty future previous at 8:30 AM

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20-Jul-23 Daily-Report.pdf
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Daily Reports

Daily Report 19-Jul-23

Wall Street had another positive session as US indices closed at yet another closing high in recently times.  US Banks rally as result beat estimate, Microsoft hits record high after AI-Optimism.

LTIM corrected yesterday reacting to its result, LTTS may correct today as it announced result after-market hours yesterday.  INFY is set to announce it result on 20-Jul-23, rallied by 3.73% on deal win.

JIO Financial will get listed in a separate entity from 20-Jul-23 and will be included in Nifty 50 and other indices.  All outstanding F&O contract in RELIANCE will be closed today and physical settled.

F&O data: FII added net long 5590 contracts in index futures, net long position now stands at 71.18% and 96701 contracts.  Nifty PCR @ 1.34 Vs 1.54 previous.  Banknifty PCR @ 0.99 Vs 1.46 previous.

Approach on Indices: We expect further profit booking on indices, we are not comfortable with the pace of rally to add fresh long at current level.  Nifty @ 19622 & Banknifty @ 45110 are near term support level in our watch list.

GIFT NIFTY @ 19800 Vs 19771 Nifty future close at 8:30 AM

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19-Jul-23 Daily-Report.pdf
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Daily Report 18-Jul-23

Wall Street had another positive as financials rally ahead of their earnings – Bank of America & Morgan Stanley are due to announce result on Tuesday & Goldman Sachs on Wednesday.

Reliance – JIO financial services demerger on 20-Jul-23.  JIO financial to be included in Nifty 50, BSE Sensex and other indices.  Pre-open price discovery session will be held between 9:00 to 10:00 AM.

HDFCBANK records 30% growth in PAT year on year, HDFC ADR was up 4.43%; Most brokerage house maintains over-weight on HDFCBNAK with target of 2010 – 2200.

F&O data: FII net long: short position at 70.25%:29.75%. Nifty PCR @ 1.54 Vs 1.34 previous.  Banknifty PCR @ 1.46 Vs 0.86 previous.  

Approach on Indices: PCR do indicate overbought zone, but expect another round of short covering.  Indices are trading in unchartered territory.  Nifty around 19800 & Banknifty around 46000 likely to be tested today.  

GIFT NIFTY @ 19769.50 Vs 19730 Nifty future previous close.

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18-Jul-23 Daily-Report.pdf
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Daily Report 17-Jul-23

Wall Street had flat closing on Friday after rally seen earlier this week on back of declining inflation data.  U.S. market recorded weekly gain on major indices round 2% to 3%.

HDFCBANK to announce result today, 42 HDFCBANK shares will be allotted for every 25 HDFC shared held.  HDFCBANK could see some pressure.

LTIM & TATAELXSI are two IT companies are set to announce result today ahead of LTTS tomorrow and INFY on 20-Jul-23.  INFY rallied around Rs 90/- or 6% in last two trading days.

F&O data: FII long: short position continues to remain at 70.29%:29.73%, Nifty PCR @ 1.34 Vs 1.11 previous.  Banknifty PCR @ 0.86 Vs 0.78.

Approach on Technical: Momentum on indices continue to remain strong, Nifty around 19550 zone Banknifty around 45000 is seeing some supply.  Nifty @ 19232 & Banknifty @ 44228 are key levels

GIFT NIFTY @ 19635 up 16 points at 8:05 AM

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17-Jul-23 Daily-Report.pdf
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Weekly Reports

15-Jul-23 Technical & Fundamental Insight

Last week – review

Going into trade last week, we had maintained cautious view with allocation to be kept around 70% to 85%.  Market momentum seems to be very strong as tech stock which came out with Q1FY24 result, stock prices reacted positively despite weak numbers.

Technical Insight

Nifty RSI @ 72.51 & RSI average @ 70.30.  Nifty closing @ 19564.50 is highest closing recorded in this rally.  Nifty next target / resistance comes at 19716 & support level comes at 19371 & 19232.

Banknifty RSI @ 58.15 & RSI average @ 59.06.  Banknifty closing on Friday’s closing at 44819, immediate resistance at 45110 & support level comes at 44228.

Approach on Technical: Indices rally looks a bit over-stretched.  Momentum on Nifty is very strong and indicate that outperformance may continue over Banknifty in near term.

Our strategy would focus on any long trade would be short term in nature, we continue to remain cautious after huge rally on indices without any major correction.  Nifty @ 19232 & Banknifty @ 44773 would act as strong support level.  Once this level is broken, can expect further downside.

Fundamental Insight

1) India’s Trade Deficit Narrows To $20.1 Billion In June As Exports, Imports Decline
2) India’s WPI Deflation Widens To Near Eight-Year Low In June
3) HDFC Shareholders Allotted Over 311 Crore Shares Of HDFC Bank

Equichain Wealth: Market View & Strategy

We see current rally and momentum very strong as reaction to weak result from IT stocks supported by positive commentary from management that worst is over.  We are already at lower end of the exposure and current rally would stretch valuation a bit more.  HDFCBANK will come out with result on 17-Jul-23, which will provide cues on who banking stocks would react?  Loan growth and advance remain high at average of 15%.  

We are comfortable with our current exposure in equity around 70% to 85% and continue to find opportunity of stock rotation and maintain allocation level at current level.  We would review IT stocks as worst may be behind us and inflation cooling off in US will provide much needed boost for tech spending helping IT stocks.

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15-Jul-23 Fundamental & Technical Insight.pdf
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Global Market – U.S. inflation softening & U.S. Fed preparing for another rate hike

Global Market – Inflation softening & U.S. Fed preparing for another rate hike

This week we will discuss softening of inflation to below 4%, lowest level since April 2021.  US Fed is behind the curve in this cycle.  US CPI & Core CPI data do indicate softening, so now the focus will shift to US Fed meeting on 26-Jul-23.  

US CPI & PPI data – indicate softening

After strong jobs data in first week of July and US FOMC meeting minutes, market is now factoring in 25-bps rate hike on 26-Jul-23.  But CPI & Core CPI data released this week could trigger one more pause before US Fed could review its decision.

Equichain Wealth Advisors: Market View & Opinion

US Fed has long term inflation target of 2% and latest data released is still above U.S. Fed’s long term inflation target.   Current US interest rate is at 5.00% – 5.25%.  In year 2006 – 07, interest rate in US was at 5.25% and sustain at that level for 14-months before we have seen sub-prime crisis.

We believe, economic slowdown and inflation cooling has direct co-relation.  Corporate earnings may get impacted with leg effect as interest rate hike takes some time to show its impact on bottom of pyramid.

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Global Market – U.S. inflation softening & US Fed preparing another rate hike.pdf
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