Month: February 2024

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Research Report

Global Market – US Market at record high – DOW30 above 39000 & S&P500 above 5000

Global Market – US Market at record high – DOW30 above 39000 and S&P500 above 5000

This week we will discuss US market which are trading at record high, US FOMC meeting minutes released this week and how China continue to provide support to its economy which continue to struggle despite opening up in last January.

NVIDIA after its fantastic earnings lead the rally in tech stocks.  US FOMC meeting minutes released this week failed to provide any timing of rate cut, yet not negative reaction by market and market took this outcome with a stable view.  

Fed Minutes Suggest Officials Are Seeking Smallest Balance Sheet Possible

Federal Reserve policymakers are gearing up for a bigger discussion about the central bank’s balance sheet, but for now its clear officials are keen to make it as small as possible.

U.S. Jobless Claims Decline to Lowest Level in A Month

Initial claims decreased by 12,000 to 201,000 in the week ending Feb. 17, according to Labor Department data released on Thursday. The figure was lower than all economists’ estimates in a Bloomberg survey.

Top Fed Officials Bolster Case for Patient Stance on Rate Cuts

Three top Federal Reserve officials hammered home the message Thursday that the US central bank is still on track to cut interest rates this year — just not anytime soon.

China’s Central Bank Tries to Catch Markets Off Guard with Surprise Easing

A record cut to a key lending rate earlier this week announced by the People’s Bank of China was just the latest unexpected move since Governor Pan Gongsheng took office last summer. At a press briefing last month, he shocked with an outsized cut to banks’ reserve requirement ratio.

Equichain Wealth Advisors: Market View & Opinion

We are certainly cautious as rally seen in market globally seems to be running ahead of its on positive expectation and events will follow later on.  Risk-On sentiment continue to provide much needed boost as economy remains strong.  

In such time we would continue to maintain balance approach with investment around 65% to 75% while keeping cash level anywhere between 25% to 35%.  We do fear that market may be venerable to any negative news which could increase volatility in near term. 

Click on the attachment to read the full report:
Global Market – US Market at record high.pdf
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Weekly Reports

24-Feb-24 Technical & Fundamental Insight

Last week – review

Last week market movement were more related to volatility seen during this week but indices continue to trade in narrow range.  Nifty 50 & SENSEX closed at fresh all-time high was market sentiment remain cautious.

Technical Insight

• Nifty this week range seen at 21956 & 22446 with positive trend.  Nifty around 21938 level likely to act as important support level on trend line from October 2023.
• Banknifty this week range seen at 46073 to 47748.  Banknifty @ 46073 to act as important support level and fresh up move can be seen above 47052.

Approach on Technical: Going into trade this week, Nifty remain strong as compared to Banknifty.  This week’s trade will be dominated by final F&O expiry for February 2024 series.

Technical setup remains bullish till Nifty @ 21957 & Banknifty @ 46073 holds.  We expect indices to test higher target on Nifty @ 22448 & Banknifty @ 47748 & higher.

Fundamental Insight

1) Policy Pivot Unlikely Until Inflation Is Under Control, Show MPC Minutes
2) Citi Research: Nifty Expected to See 14% Earnings Growth for Couple of Years
3) RBI Allows Banks, Non-Banks to Issue Public Transport Payment Instruments

Equichain Wealth Advisors: Market View & Strategy

Even though market is trading near its fresh life time, market sentiment remains cautious.  High volatility was seen this week cues from domestic & global market remains stable and positive while valuation seems to be stretched.

We continue to maintain our stance to keep allocation level around 65% to 70% while remain bullish with medium to long term view.  We remain cautious with short term view and keeping our strategy to make fresh allocation only on decline.  Technical setup looks bullish going into F&O expiry this week for February 2024 series.  However, we continue to play cautious and expecting high volatility in final F&O expiry week.

Click on the attachment to read the full report:
24-Feb-24 Fundamental & Technical Insight.pdf
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Research Report

Global Market – Key events 5 to 9 Feb 2024

Global Market – Key events for 5th to 9th February 2024

This week we will focus on China’s economy, how Powell ‘s interview to “60 Minutes” and also discuss BOJ shift in policy change from negative interest rate.  This week has been relatively quite and focus has been on corporate earnings.

China’s Consumer Prices Drop at Fastest Pace Since 2009

China’s consumer prices fell last month at the fastest pace since the global financial crisis as the world’s second-largest economy struggles to shake off persistent deflation pressures.

Germany’s Industrial Downturn Stretches into A Seventh Month

German industrial output extended its slump to a seventh month in December, underlining the struggles gripping Europe’s largest economy.

China Tightens Some Trading Restrictions for Domestic and Offshore Investors

China is tightening trading restrictions on domestic institutional investors as well as some offshore units as authorities fight to stem a deepening stock rout, according to people familiar with the matter.

Powell Tells ‘60 Minutes’ Fed Is Wary of Cutting Rates Too Soon

Federal Reserve Chair Jerome Powell said Americans may have to wait beyond March for the central bank to cut interest rates as officials look for more economic data to confirm that inflation is headed down to 2%.

Trillions Of Yen Pile Up at Negative Rates in Bets on BOJ Shift

Japan’s biggest commercial banks are letting money accumulate in negative interest-rate accounts at the central bank — another sign that the world’s last sub-zero rate policy is coming close to the end.

Equichain Wealth Advisors: Market View & Opinion

In last few weeks in our coverage of global market, we have been focusing mainly on three countries and their central banks.  U.S., Japan & China.

We would like to highlight that market is optimistic and currently trading near its high as interest rate going down in US could be positive for risk-on sentiment, China’s effort to boost economy is also positive but the real concern in BOJ moving away from negative interest rate policy.

Click on the attachment to read the full report:
Global Market – Key events this week 5 to 9 Feb 2024.pdf
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Weekly Reports

10-Feb-24 Technical & Fundamental Insight

Last week – review

Going into trade last week, we were cautious as market rally seems to be showing some sing of weakness post Budget on 1-Feb-24.  We see budget as non-event as there was no major expectation as it was Vote-On-Account ahead of general election in April – May 2024.  Market this week ended with minor cuts as RBI MPC policy was due this week.

Technical Insight

• Nifty in last two week has been trading in range of 21411 to 22115, Nifty has made double top on last Friday would act as resistance level.  Nifty range expected this week is 21680 to 22115.

• Banknifty range for this week is expected to be 45295 to 46571.  Any major move in Banknifty expected once this range is broken on either side.

Approach on Technical: Indian market reacted to Budget last week and RBI MPC policy this week.  We expect indices to follow technical direction as there are no major scheduled event, outcome of which can impact market direction.

Nifty @ 21680 & Banknifty @ 45295 to act as important support level.  If indices break this level – fresh downside could be expected, otherwise we see indices could attempt fresh up move.

Fundamental Insight

RBI Monetary Policy Key Takeaways

• To keep the repo rate unchanged at 6.5% by a 5:1 majority.
• The standing deposit facility rate, pegged 25 basis points below the repo rate, is at 6.25%.
• The marginal standing facility rate, which is 25 basis points above the repo rate, is at 6.75%.

The MPC also decided to remain focused on the withdrawal of accommodation to ensure that inflation progressively aligns with the target, while supporting growth.

India To Sell $11.6 Billion Airwaves to Boost Phone Networks

India’s federal cabinet Thursday approved a plan for selling airwaves in an auction to improve quality and coverage of networks in the world’s second-biggest telecom market.

Forex Reserves Jump To $622.469 Billion

India’s forex reserves jumped by $5.736 billion to $622.469 billion for the week ended Feb. 2, the Reserve Bank said on Friday. In the previous week, the overall reserves had increased by $591 million to $616.733 billion.

Equichain Wealth Advisors: Market View & Strategy

We have remained cautious in last few weeks and continue to remain cautiously optimistic but will continue to follow strategy of fresh allocation on correction.  

We see market at current level has factored in political stability, US fed pivot on interest rate and earnings season so far has failed to provide fresh positive triggers.  Rally in PSU stocks continue on optimism of political stability, but we do believe valuation are stretched in near term.

We would continue to keep exposure around 75% and major allocation would be preferred on correction.  We may review our stance incase indices hit fresh high supported by some positive triggers on interest rate going down or any other substantial news which could change market narrative.

Click on the attachment to read the full report:
10-Feb-24 Fundamental & Technical Insight.pdf
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