Last week – review
We expected some correction / consolidation before market makes its next move, Nifty tested 19458 but was trading above 19160 & Banknifty tested 61.8% retracement level of 43541 to 46256 rally. Indian market remain mix with Banknifty correct by 1.29% as high interest rate would be major concern.
Technical Insight
• Nifty continue to remain in correction / consolidation zone with 19160 to act as decisive support level this week & break-out above 19678 to act as fresh trigger.
• Banknifty took support at 61.8% retracement level of 43541 to 46256. Banknifty close below 44578 could open further weakness & above 45219 Banknifty could expect another round of rally.
Approach on Technical: Technical trend continue remain mix and no clear direction in short term while medium term trend remains positive.
Nifty @ 19160 & Banknifty @ 44578 & 44138 to act as critical support level. Indices would turn negative only if this support level are broken on closing basis and uptrend could resume once Nifty goes above 19674 & Banknifty above 45615.
Fundamental Insight
1) Forex Reserves Drop By $3 Billion To $603.87 Billion
2) India’s Unemployment Rate Falls in July Due to Farm Demand
3) Banks Spend More In Q1 As Employee Costs Continue To Mount
Equichain Wealth: Market View & Strategy
This week focus would shift to RBI MPC meeting outcome on 10-Aug-23. Most private banks came out with Q1FY24 result in-line or better than street estimate but SBIN seen some increase in slippages to 7659 crores from 3185 crores, quarter ago. RBI has kept rate unchanged in last two policy meeting and is expected to maintain status quo. RBI Governor commentary and guidance on future action will provide fresh set of triggers. Q1FY24 earnings season in last phase as PSU & defense PSU stocks will be in focus.
We would continue to focus on capital allocation strategy which is currently around 70% to 85% with allocation in defensive stocks around 15%. Any major correction would provide us opportunity to deploy fund which is already available. In case of sharp up move, we would prefer to keep exposure at same level and look for rotation of stocks within exposure limit.