Month: March 2024

Categories
Research Report

Global Market – Gold, ECB Meeting & U.S. Fed – Powell ‘s testimony

Global Market – Gold, ECB meeting & U.S. Fed – Powell ‘s testimony

This week we will focus on ECB meeting outcome, ECB kept interest rate unchanged and commentary is important to watch out for.  U.S. Fed chair Jerome Powell testimony this week provided further cues on interest rate trajectory and we would be focus on gold which is currently trading at above $2150.

ECB Meeting outcome on 7-Mar-24

ECB kept rates unchanged at 4.50% for fourth straight time as ECB expect softer inflation and stable economic growth, ECB guides for rate cut in June 2024 meeting. 

“We clearly need more evidence, more detail,” she told reporters Thursday in Frankfurt. “We know that this data will come in the next few months. We will know a little more in April, but we will know a lot more in June.”

Christine Lagarde Signals ECB Cut in June with 2% Inflation in Sight

European Central Bank President Christine Lagarde indicated policymakers may be in a position to lower interest rates in June as fresh projections showed inflation hitting the 2% target in 2025.

U.S. Fed Chair Jerome Powell’s Senate Testimony

Powell reiterated that it’s likely the Fed will cut interest rates this year. “We’re waiting to become more confident that inflation is moving sustainably at 2%,” he said. “When we do get that confidence — and we’re not far from it — it’ll be appropriate to begin to dial back the level of restriction.” He also said the Fed is well aware of the risk of cutting too late.

Gold Climbs to Record on Mix of Fed Pivot and Geopolitical Risks

Gold touched an all-time high as fund buying combined with speculation over a Federal Reserve pivot and geopolitical and financial risks underpinned a rally in the precious metal.

Equichain Wealth Advisors: Market View & Opinion

Last week, we have turned neutral to cautious with balance view last week, this week’s comment by U.S. Fed chair Jerome Powell in a testimony to U.S. Congress and ECB ‘s guidance on expectation of first rate cut in June has provided positive trigger to risk-on sentiment.

We will use any correction to add / deploy fund and recent trend looks positive.  Market not expecting any change in rate in this month, but guidance on rate cut in coming months or likely by May 2024 meeting could provide much needed trigger and rally.

Click on the attachment to read the full report:
Global Market – Gold, ECB Meeting & U.S. Fed – Powell ‘s Testimony.pdf
View Document
Categories
Weekly Reports

9-Mar-24 Technical & Fundamental Insight

Last week – review

Technical trend turned positive and expected indices to test higher level in 4-day trading week.  Banknifty outperformed this week as ICICIBANK, AXISBANK & SBIN lead the Banknifty rally.  Mid-cap & Small-cap under performed as Small-cap index closed the week with cut of 2%.

Technical Insight

• Nifty range of this week seen at 22334 to 22627 and Nifty above 22627 could provide fresh upside triggers.

• Banknifty range seen at 47206 to 48535.  Banknifty has outperformed this week and outperformance likely to continue.

Approach on Technical: Going into trade next week, GIFT Nifty is indicating gap-up opening of more than 100 points on positive global cues.

Technical trend continues to remain positive and Nifty @ 22627 & Banknifty @ 48161 to act as resistance.  If Indices manage to move above these levels, it could further trigger short covering rally and indices could test higher level in this week on Nifty @ 22921 & Banknifty @ 48535.  

Fundamental Insight

1) Centre Hikes Dearness Allowance To 50% Of Basic Pay For Its Employees
2) Gold Rallies To Record High But May Have Overshot Its Near-Term Upside
3) How Discoms Will Be Hit If They’re To Meet Peak Demand Of 250 GW In April-June
4) Singtel Divests 0.8% Stake In Bharti Airtel For Rs 5,849 Crore

Equichain Wealth Advisors: Market View & Strategy

Global sentiment is turning positive ahead of next round of central banks meeting which starts with Bank of Japan on 19-Mar-24, U.S. Fed on 20-Mar-24 & Bank of England on 21-Mar-24.  Recent rally in Gold, US 10-year bond yield below 4.10% & Dollar index below 103 – market rally on hope of rate cut by US Fed by in May 2024.  ECB kept interest rate unchanged on 7-Mar-24 and guided for rate cut in June 2024 depending on incoming data.  BOJ is expected to hike rate on 19-Mar-24.

We have maintained our exposure around 65% – 75% and would prefer to increase deployment gradually with stock specific approach.  Market continues its uptrend and momentum could get strong if it is supported by action of central banks which could lead to short covering rally ahead of financial year end.

Click on the attachment to read the full report:
9-Mar-24 Fundamental & Technical Insight.pdf
View Document
Categories
Research Report

Global Market – Gold, Cryptocurrency & U.S. Govt averts shutdown

Global Market – Gold, Cryptocurrency & US averts shutdown

Last week, we have discussed how global market continues to trade at recent high on hope of interest rate peaked out and hope of economic stability.  This week we will focus on Gold which has now trading around $2050 & BITCOIN which is now above $60000 almost after two years.  We will also discuss China’s continues effort to boost economy.

Congress Approves Interim Funds to Avert U.S. Government Shutdown

The Senate passed the bill on a 77-13 vote on Thursday night, hours after the House acted on it.

Fed Officials emphasize Data to Guide Pace of Interest-Rate Cuts

Three Federal Reserve officials said the pace of interest-rate cuts will depend on incoming economic data, suggesting the path to lower borrowing costs may look different than in previous rate-cutting cycles.

U.S. Fed’s Preferred Inflation Metric Increases by Most in A Year

The Federal Reserve’s preferred gauge of underlying inflation rose in January at the fastest pace in nearly a year, helping explain policymakers’ patient approach to start cutting interest rates.

Bitcoin Scales $60,000 As ETF Demand Puts Record High in Sight

A wild 24 hours for the cryptocurrency market saw Bitcoin jump as much as 13% on Wednesday to $63,968 — its first trip above $60,000 since November 2021. Along the way, leading US digital-asset exchange Coinbase suffered outages as traffic surged before eventually restoring services.

Gold trading above $2050

Gold has been trading around $2000 level for some time now, gold price would rally if interest rate decline or any economic uncertainty.  Gold is considered as safe heaving and asset class which comes into focus in case of any economic uncertainty.  

Japanese Currency Official Warns Against Unstable FX At G-20

Japan kept up its drumbeat of warnings against currency volatility, with a top finance ministry official saying that foreign exchange rates should reflect fundamentals, and authorities in Tokyo are watching moves closely.

Equichain Wealth Advisors: Market View & Opinion

We remain cautious on Japan ‘s change in monitory policy which was -0.10 interest rate since 2016.  Japanese currency official warning against unstable FX at G-20 needs to see with cautious.

Global market and risk-on sentiment remains very much strong; however, we have been cautious for past weeks, but market momentum seems to be very strong.  Incoming economic data due next week could provide further cues as we remain neutral with balance view.   Recent up move in Gold & Bitcoin is interesting to watch as incoming economic data needs to be watched carefully ahead US Fed meeting on 20-Mar-24.

Click on the attachment to read the full report:
Global Market – Gold, Cryptocurrency & US averts shutdown.pdf
View Document
Categories
Weekly Reports

2-Mar-24 Technical & Fundamental Insight

Last week – review

Indices closed mixed this week as Nifty 50, SENSEX & Banknifty ended with around 1% gain, while Mid-cap 100 & Small-cap 100 closed with loss of around 1%.  GDP data released on Thursday after market hours provided much needed rally from lows of the week to record high on major indices.  Mid-cap & Small-cap underperformed this week as SEBI asked for further disclosure and regulation from Mutual fund.

Technical Insight

• Nifty could see fresh upside above 22446.  Nifty range for this week could be 22297 to 22796.  Nifty above 22297 is seen as fresh break-out.

• Banknifty move on Friday can be seen as big positive and now immediate support @ 47052 and trend remains positive till it holds 47052.

Approach on Technical: Friday’s move after strong GDP data on Thursday after market closing has change direction in short term.  Last Wednesday & Thursday market remain under pressure.

Nifty @ 22096 & Banknifty @ 46562 to act as important and decisive support level.  Technical chart has turned positive and could test higher level.  Nifty is expected to test 22446 & 22796.  Banknifty likely to test 47748 & 48636.  We see Friday’s move as big trigger as Nifty 50 index made fresh high and could open further upside.  

Fundamental Insight

1) India’s GDP Grows 8.4% In Q3 Surpassing Estimates; Full-Year Growth Pegged At 7.6%

The gross domestic product grew 8.4% over a year earlier in the October-December quarter, according to the latest estimates released by the government’s statistical agency. Gross value added, which strips out indirect tax and subsidies, is estimated to have grown 6.5%.

2) Fiscal Deficit Widens To 64% Of Revised Estimates till January
3) India’s GST Collection Rises 12.5% To Rs 1.68 Lakh Crore in February
4) Cabinet Nod for Three Semiconductor Units Entailing Rs 1.26 Lakh Crore Investment

Equichain Wealth Advisors: Market View & Strategy

Nifty closed at fresh 52-week high lead by broad base rally from banking to infrastructure sector.  GST Collection for February came at 1.68 lakh crores, records 12.5% growth compared to previous year while decline compared to previous month’s collection of 1.74 lakh cores.

We see recent development as fresh positive triggers and we may find opportunity to deploy fund available.  In last few weeks, we have been underweighted as we were expecting correction, but market witness sideways correction / consolidation and Friday ‘s rally changed the sentiment.  Q3FY24 GDP number just ahead of election could limit the downside.  Any correction could be seen by market as buying opportunity as strong domestic inflows is now backed by strong economic data

Click on the attachment to read the full report:
2-Mar-24 Fundamental & Technical Insight.pdf
View Document