Month: January 2024

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Research Report

Global Market – Key events for 22 to 26 January 2024

Global Market – Key events for 22 to 26 January 2024

This week, we will focus on US Q4 2023 GDP data, ECB interest rate decision & China’s steps to boost economic recovery.  Central banks meeting starts with BOJ & ECB meeting this week.  We would like to focus on stocks whether news this week would have any impact global trend.

BOJ Keeps Negative Rate for Now as It Prepares Ground for Hike

The BOJ maintained its -0.1% short-term rate and kept yield curve control parameters intact at the end of a two-day meeting, according to its statement Tuesday. 

Red Sea Turmoil Sends Economic Shockwaves Far and Wide

Two months of missile, drone and hijacking attacks against civilian ships in the Red Sea have caused the biggest diversion of international trade in decades, pushing up costs for shippers as far away as Asia and North America.

China To Cut Bank Reserve Ratio in Bid to Boost Growth, Markets

The 0.5 percentage-point cut to the ratio, or the amount of cash that banks have to keep in reserve, on February 5 will provide 1 trillion yuan ($139 billion) in long-term liquidity to the market, Pan said during a briefing with the press Wednesday.

Fed Raises Rate on Emergency Loan Program to Stop Arbitrage

The Federal Reserve raised the rate on loans to banks issued under an emergency lending program launched last year, after borrowing surged in recent weeks as institutions took advantage of the attractive financing terms.

ECB To Hold Interest Rates as Lagarde Beats Back Cut Bets

The European Central Bank is set to keep borrowing costs on hold for a third meeting while stepping up efforts to convince investors that interest-rate cuts aren’t imminent.

US GDP Grew 3.3% Last Quarter, Capping Unexpectedly Strong Year

Gross domestic product increased at a 3.3% annualized rate, according to the government’s preliminary estimate out Thursday. For all of 2023, the economy expanded 2.5%.

Equichain Wealth Advisors: Market View & Opinion

Bank of Japan is now preparing to hike interest rate, China is providing support for economic recovery, ECB guides for rate cut & while US last quarter GDP growth came above estimate ahead of US Fed meeting on 31-Jan-24.  We seen extreme mix picture of global economy which makes us cautious as year end rally seen in December 2023 could see trend reversal post US Fed meeting outcome.

Earnings season so far has remain mix and fail to provide fresh triggers for market.  We are currently focusing to reduce exposure at higher level and wait for better entry opportunity on correction.  Next big trigger could come when interest rate in US & Europe comes down and we see some economic slowdown before we see interest rate heading downward.

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Global Market – Key events this week 22 to 26 Jan 2024.pdf
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Weekly Reports

27-Jan-24 Technical & Fundamental Insight

Last week – review

Market going into 3-day trading week with F&O expiry and profit booking seen in previous week, we expected this week to resume uptrend as ICICIBANK result was in-line with market expectation.  Indices seen yet another week of profit booking as Banknifty continue to remain week as HDFCBANK remain weak closing at 1434.90 which is around 15% correction from 16-Jan-24 close.

Technical Insight

• Nifty expected to be in range of 20976 on lower end while fresh up move could be expected once Nifty crosses 21680.  
• Banknifty range for this week could be seen as 43230 on lower side while fresh up move could be expected once Banknifty sustains above 46571.

Approach on Technical: This week again news flow will drive the market as US FOMC meeting outcome on 31-Jan-24, Indian market will be reacting to it on 1-Feb-24 and Budget ahead of general election will be on 1-Feb-24.

Technical setup is weak and it indicates further downside.  Nifty @ 20976 & Banknifty @ 43230 on lower side could be tested this week.  Nifty @ 21680 & Banknifty @ 46571 could be tested on higher side.  VIX @ 13.86 will be important tool and need to turn cautious if VIX goes above 16.

Fundamental Insight

1) LIC Gets RBI Nod to Acquire 9.99% Stake in HDFC Bank
2) Cabinet Approves Rs 8,500 Crore Incentive Scheme For Coal Gasification Projects: Sources
3) Forex Reserves Fall By $2.8 Billion To $616.1 Billion, Says RBI
4) Budget 2024: Government Likely to Target 5.3% Fiscal Deficit Target for FY25, Say Economists

Equichain Wealth Advisors: Market View & Strategy

This week, US FED meeting outcome on 31-Jan-24, Indian market will react to it on 1-Feb-24 along with Union budget ahead of general election on same date 1-Feb-24.  So, we expect any major move is expected on 1-Feb-24.  

Our strategy would be to focus on keeping exposure around 70% and have balancing approach where we remain positive with medium to long term view and cautious in short term.  Technical setup looks bearish and any lack of positive trigger may lead to correction.  

When we see recent rally, which is seen from December 2023, state election result on 3-Dec-23 and US Fed guided that rate hike may done has triggered the ongoing rally.  We have mentioned earlier also that now focus will shift to earning season which has been mixed so far.  We believe post budget – market could see profit booking as run-up in PSU ‘s has been one of the best rallies seen in recent past.  

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27-Jan-24 Fundamental & Technical Insight.pdf
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Global Market – Key events this week – 14 to 19 January 2024

Global Market – Key events this week – 14th to 19th January 2024

This week we will cover we will cover how China’s stock sell-off and oil squeeze at start of 2023 is seen at surplus.  Red sea crisis event could impact food supply and impact inflation.  U.S. economic data released this week came above market estimate as jobless claim declined.  How key risk indicator reacted this week.

China’s $6.3 Trillion Stock Selloff Is Getting Uglier by The Day

Chinese stocks just capped another dismal week, with a gauge of mainland firms listed in Hong Kong languishing at the bottom of global equity index rankings for the year so far.

Oil Squeeze Of 2023 Turns to Surplus In Warning For Market Bulls

A year ago, crude traders and forecasters anticipated that the fourth quarter would be the strongest point of 2023, with China’s post-pandemic demand recovery pushing prices up to $100 a barrel. More recently, the Organization of Petroleum Exporting Countries has been predicting a record deficit of 3 million barrels a day.

Red Sea Unrest Is Bad News for The World’s Fragile Food Supply

Chaos in the Red Sea is starting to disrupt shipments of produce from coffee to fruit — and threatening to halt a slowdown in food inflation that brought some relief to strained consumers.

U.S. Jobless Claims Plunge To 187,000, Lowest Since September 2022

Initial claims decreased by 16,000 to 187,000 in the week ending Jan. 13, according to Labor Department data released on Thursday. The figure was below all estimates in a Bloomberg survey of economists.

ECB To Pick Right Moment for First Rate Cut, Economists Say

Almost three-quarters of respondents in a Bloomberg survey are confident policymakers will neither wait too long nor act too early — after they were widely accused of tardiness in responding to the continent’s once-in-a-generation price shock.

US 10-year bond yield @ 4.16% & Dollar Index @ 103.10

Key risk indicator in last week has seen risk-off sentiment as US 10-year bond yield rises from 3.94% a week earlier to 4.16% this week, rise of more than 20-bps.  Dollar Index is currently trading above 103 level was trading around 102 level.

Equichain Wealth Advisors: Market View & Opinion

Global cues were positive till last week on December 2023 on optimism of interest to cool-off sooner than expected but global cues in first three weeks of January 2024 does not provide any support to this trend.

We see next two week will be important and as BOJ meeting outcome on 23-Jan-24, ECB meeting outcome on 25-Jan-24, US Fed meeting outcome on 31-Jan-24 & BOE meeting outcome on 1-Feb-24.  Commentary of all these central banks could provide further cues.

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Global Market – Key events this week 14 to 19 Jan 2024.pdf
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Weekly Reports

21-Jan-24 Technical & Fundamental Insight

Last week – review

Nifty started this week’s trade with a bang as Nifty manage to cross 22100 level and close at 22097 on Monday.  Market seen major fall on Wednesday as reaction to HDFCBANK which disappointed market as HDFCBANK ADR was down by more than 15% in two trading session.  HDFCBANK seen cut of more than Rs 200 or 12% from 1679 closing ahead of result on 16-Jan-24.  

Technical Insight

• Nifty key support and resistance level this week could be 21411 to 21680.  Break-out on either direction to provide fresh move in a holiday shorten week.
• Banknifty expected to trade in range of 45295 to 46571.  Decisive move can be expected once this level is crossed on either side

Approach on Technical: Indices will be reacting to ICICIBANK ‘s result on Tuesday & holiday shorten week.  Banknifty monthly expiry on 24-Jan-24 & Nifty and stocks final F&O expiry on 25-Jan-24.

Indices after last week has seen sharp correction on back of HDFCBANK ‘s result on 16-Jan-24.  Nifty @ 21411 & Banknifty @ 45295 to act as important support level and indices to remain in uptrend till these levels are hold.  

Fundamental Insight

1) RBI Not Discussing Rate Cuts Yet, Governor Das Says
2) Retail Inflation For Farm Workers Rises To 7.71% In Dec
3) EPFO Adds 13.95 Lakh Net Members During November 2023
4) India’s Fiscal Deficit To Be Budgeted At 5.3% Of GDP In FY25: BofA Securities

Equichain Wealth Advisors: Market View & Strategy

F&O expiry for January series due this week in a holiday shorten week, Indian market will be trading for only 3 days this week as Friday will be holiday for Republic Day and soon after that focus will shift to Vote-On-Account, Mini-budget on 1-Feb-24.  ICICIBANK result is in-line with market estimate with NIM at 4.43% Vs 4.53% in previous quarter.  ICICBANK result is better than street estimate and no major concern seen as compared to HDFCBANK.

We remain cautious optimistic as we see many stocks are fairly valued and focus will clearly shift to budget due on 1-Feb-24.  Market will react positively to successful PRAN PARTHISTHA ceremony of RAM MANDIR as focus will now shift to budget and election.  

We would also be focusing on booking part profit and shifting to stocks which are valued attractively.   We remain open to review our allocation strategy based on incoming data and we do not rule out profit booking post budget on 1-Feb-24.

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21-Jan-24 Fundamental & Technical Insight.pdf
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Global Market – Key event for 8 to 12 Jan 2024

Global Market – Key events this week – 8th to 12th January 2024

This week we will cover various events this week and but these events does not have any major impact
on global cues.  China continues to their longest streak of deflation since 2009, threatening a deflationary spiral that may require more government support to reverse.

Brent Oil Hits $80 After Airstrikes Target Yemen’s Houthis

President Joe Biden said strikes had been conducted against a number of targets used by the Iran-backed group, with US officials saying radar sites and missile launchers were hit. A tanker industry group said military forces in the region were advising ships to avoid a key chokepoint near Yemen.

China’s Worst Deflation Streak in 14 Years Puts Pressure on PBOC

China’s consumer prices marked their longest streak of declines since 2009, threatening a deflationary spiral that may require more government support to reverse. Its export growth engine is also faltering.

Bitcoin ETF Trades Top $4.6 Billion in ‘Ground-Breaking’ Day

Over $4.6 billion worth of shares traded between the almost a dozen US spot Bitcoin exchange-traded funds on Thursday. The Grayscale Bitcoin Trust, which converted into an ETF, saw about $2.3 billion in volume, according to data compiled by Bloomberg. Meantime, BlackRock’s iShares Bitcoin Trust—IBIT— saw over $1 billion change hands.

U.S. Mortgage Rates Climb for Second Straight Week, Hitting 6.66%

Borrowing costs have risen slightly as traders grapple with questions around the Federal Reserve’s future path. US inflation accelerated in December, tempering expectations about possible rate cuts from the central bank.

Iran Captures Oil Tanker Off Oman in Deepening Mideast Turmoil

A tanker previously seized by the US for carrying illicit Iranian oil was captured by Tehran off the coast of Oman, heightening tensions in the world’s most important trade lane for global crude supply.

Equichain Wealth Advisors: Market View & Opinion

Market news and events this week does not have any major impact on equity while crude oil has seen spike on Friday as Brent crude oil approaches $80.  China’s is facing deflation and China’s CPI continues to mark longest streak of deflation since 2009.  Rising geo-political tension in Red-sea remain uncertainty in global market.

With recent development and geo-political event unfolding we will remain watchful and these events could trigger risk-off sentiment and provide much needed correction in global market.   Global market continues to trade near its recent high and remain venerable to any potential negative triggers.

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Global Market – Key events this week 8 to 12 Jan 2024.pdf
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13-Jan-24 Technical & Fundamental Insight

Last week – review

Going into trade last week, we expected Nifty range 21506 – 21834 & Banknifty range 47575 – 48636, Nifty tested both end of the range while Banknifty manage to hold lower end of the range.  Banknifty was showing weakness on chart and it has underperformed.  IT result was key highlight for this week as INFY narrowed guidance to 1.5% – 2% indicating worst may be behind as TCS report operating margin at 25%.  

Technical Insight

• Nifty range for this week could be seen as 21631 to 22306.  Nifty move above 21834 has opened further to 22306 level.
• Banknifty range for this week could be seen as 47575 – 48636.  Banknifty range for this week remains same as last week.

Approach on Technical: IT result provided trigger to Nifty this week and Banknifty could take cues from HDFCBANK result due on 16-Jan-24.  Banknifty to take move on either direction.

We will turn cautious or bearish if Banknifty breaks 47575 and fresh upside momentum can be seen on Banknifty above 47980 to 48636 level.  Banknifty could led the positive momentum as chart indicates positive from consolidation. 

Fundamental Insight

1) India’s CPI Inflation Rises to Four-Month High Of 5.69% In December
2) IIP: Growth In India’s Industrial Output Falls To Eight-Month Low At 2.4%
3) Parliament’s Budget Session Likely Between Jan. 31 And Feb. 9

Equichain Wealth Advisors: Market View & Strategy

HDFCBANK result could provide decisive direction to Banknifty and could led next round of rally.  IT stocks rallied this week helped Nifty cross its previous and closed at life time high.  HDFCBANK ‘s quarterly business updates were positive and no negative surprise could support to HDFCBANK stock prices which has seen correction in last two weeks after year end rally which on HDFCBANK which crossed 1700 level.  

We remain positive and would continue to maintain bullish stance unless we see negative cues dominating and market direction turns negative.   Our strategy would to remain long on Banks, Defense stocks and Infrastructure stocks going into Vote-on-account (mini-budget).

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13-Jan-24 Fundamental & Technical Insight.pdf
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Global Market – In focus – U.S. Economic & Geo-political tension

Global Market – In focus – U.S. Economic data & Geo-political tension

This week will on U.S. economic data and geopolitical tension as corporate earnings will start from next week.  So next week we will review corporate earnings of global companies and its impact on global as well as Indian market.

Now let us focus on the data released this week.  Most of the jobs data indicate strong economy, JOLTS Jobs opening came in-line with estimate while average hourly earnings were up by 0.40% Vs estimate of 0.30%.  Non-farm employment change came at 216k Vs estimate of 168k.

Market trend remains unclear as rally seen in December 2023 was on narrative of interest rate could starting declining earlier then estimate.  Strong economic data would mean the rate could stay at higher level for some more time.  US FOMC meeting minutes released this week also failed to provide clear trend and incoming data would be important to watch out for.

Geo-political tension – Red Sea Crisis

Freight costs, including surcharges, have increased by over 500% amid the Red Sea crisis as shipping companies were forced to take the longer route via Cape of Good Hope, according to the Federation of Indian Export Organizations.

Equichain Wealth Advisors: Market View & Opinion

US Market in December 2023 rallied from 3.81% to 4.94% on major indices will now need positive trigger from corporate earnings.

We would focus on corporate earnings where major US Banks are due to announce their earnings next week.  As we have seen economic data is U.S. continues to be strong will result in positive surprise in corporate earnings.

 
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Global Market – In focus – U.S. Economic data & Geo-political tension.pdf
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6-Jan-24 Technical & Fundamental Insight

Last week – review

Going into trade in the first week of 2024, we expected to consolidate after year-end rally seen in last two weeks of December 2023.  Market had volatile session in range and ended the week flat on major indices.  Mid-cap 100 & Small-cap 100 stocks gained around 2% on major indices, rally continues in Mid-cap & Small-cap stocks.

Technical Insight

• Nifty range for next week could see break-out from this range of 21506 – 21834.  Nifty technical indicate positive momentum to accelerate once 21834 is crossed.
• Banknifty range of this week is expected from 47575 to 48636.  We remain positive on Banknifty and will review long position only if Banknifty goes below 47575.

Approach on Technical: last week was all about consolidation and we expect this week, market to take decisive direction.  Indices consolidated this week after two weeks of major rally.

Nifty is strong as compared to Banknifty on daily chart, Indices likely to maintain positive momentum as Nifty @ 21506 & Banknifty @ 47575 holds on closing basis.  

Fundamental Insights

1) India GDP: Advance Estimates Peg FY24 Growth At 7.3%, Nominal GDP Expansion At 8.9%
2) HDFC Bank Q3 Updates: Deposit Accretion Slows
3) India To Tighten Budget Deficit as Bond Index Inclusion Beckons

Equichain Wealth Advisors: Market View & Strategy

Global cues are muted as incoming U.S. economic data will play important role in providing fresh cues for interest rate which was key reason of rally in global market in December 2023.  U.S. CPI & Core CPI inflation data will due next will provide important direction as US 10-year bond yield back above 4.00%.

IT stocks – INFY & TCS to start earnings season on 11-Jan-24, we see IT stocks may have bottomed out and we go into result season with positive view on IT stocks.  HDFCBANK quarterly business failed to cheer the market but we see this number as positive as credit growth remains healthy.

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06-Jan-24 Fundamental & Technical Insight.pdf
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