Last week – review:
Indian major indices finally manage break-out on lower side on back of ADANI group stocks seen sharp fall on HINDENBURG research report which claim to be biggest con in Indian corporate history. Adani group had declined their allegations and may explore legal actions against the HINDENBURG research.
Approach on Technical: Indices break-down on lower end of the range was followed by brutal sell-off as ADANI group stocks feared massive sell-off.
Our strategy for this week will to play for potential short covering on Nifty around 17580 for bounce up to 17775 & Banknifty bounce could be sharp to 41024 & 41597. We would prefer hedge position only on either side due to Budget & US Fed outcome.
Fundamental Insight
1) India Enters Green Bond Market With $1 Billion Debut Auction. First Tranche Of Sovereign Green Bonds Sold At A Thin ‘Greenium’
2) India’s Forex Reserves Rise By $1.73 Billion To $573.7 Billion
3) Russian Oil Exports To India May Hit New Highs As Interest Grows
4) India’s Services Exports To Cross $300 Billion Target For This Fiscal, Says Piyush Goyal
5) Worst Of Inflation, Growth And Currency Crises Behind Us: RBI Governor Das
Market View & Strategy
MSCI on Saturday said that it is seeking feedback on ADANI group stocks and that may impact the eligibility of those relevant securities for the MSCI global investable market indexes.
Technical chart has turned weak, so market will face selling pressure on every rise unless there some concrete positive news which could provide fresh trigger to market, budget is key event and we will be watching closely with optimistic view.
We do not have any view on ADANI group stocks, bearish or bullish but this is the first time we have seen more impact on other stocks as market was trading in range for some time and needed a reason for correction. We do not rule this correction as buying opportunity and we would be going by strategy on Monday & Tuesday and mostly likely avoid fresh positional view on Wednesday that is Budget-day.