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Weekly Reports

20-May-23 Technical & Fundamental Insight

Last week – review

In our last week, we expected range bound movement and our strategy would be to deploy fund on correction and reduce exposure in case of further rally.  Indices this week traded in narrow range and weekly change this week was withing 1% or -1%.

Technical Insight

• Nifty RSI @ 58.85 & RSI average @ 62.99.  Last up move on Nifty from 17553 to 18458 – almost 1000 points without any major correction.  Nifty corrected up to 18113 which is 38.2% retracement level.

• Banknifty RSI @ 66.38 & RSI average @ 66.26.  Banknifty last up move from 42582 to 44151 completes double formation requirement of previous top on Banknifty made in Dec-22.

Approach on Technical: Nifty & Banknifty do indicate opposite view.  Nifty do indicate range bound move expected with negative bias.  Banknifty on the other hand shows strength which could see further build-up.

Our strategy based on technical chart would to turn cautious only after Nifty closed below 18131 & Banknifty below 43181.  Indices likely to see selling pressure on rally as Nifty @ 18499 & Banknifty above 44151 could test 44624.  Base case assumption for this week would be – Indices likely to test upper end and could see supply at higher level.

Fundamental Insight

1) Rs 2,000 Currency Notes Withdrawn from Circulation, Can Be Exchanged Till Sept. 30
2) Forex Reserves Jump $3.5 Billion To $599.53 Billion
3) RBI To Transfer Rs 87,416 Crore Surplus To Government For FY23
4) S&P Global Reaffirms India’s Sovereign Credit Rating At ‘BBB;’ Outlook Stable

Market View & Strategy

Global market will continue to focus on U.S. debt ceiling talks as deadline is near, latest news from U.S. is that there is no progress on debt ceiling talks.  Crisis in U.S. regional banks remain key concern as interest rate remain high.

We are currently invested around 85% and any rally in market could be utilized for reduction.  We would wait for healthy correction before we may deploy fresh fund on correction / consolidation.  Nifty below 18113 & Banknifty below 43151 could trigger further correction.

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Research Report

Global Market – European market at fresh 52-week high & China’s growth slows

Global Market – European Market at fresh 52-week high & China’s recovery slows

This week we will discuss, despite U.S. uncertainty on debt ceiling limit and crisis in U.S. regional banks, European market continue to make fresh high.  Germany’s DAX made fresh 52-week high this week.  Japan’s Nikkei surges to 33-year high, seen at highest level since 1990.  China’s economic recovery fails to keep momentum on fear of global growth.

Germany’s DAX at fresh 52-week high

European shares rose on Friday, with Germany’s DAX 40 index solidifying its gains above the 16,200 level and reaching a new 16-month high, fueled by growing optimism that a resolution regarding the US debt ceiling was on the horizon.

JAPAN’S NIKKEI 225 SURGES TO 33-YEAR HIGH, ENDS AT HIGHEST LEVEL SINCE 1990

Asia-Pacific stock markets closed on a mixed note on Friday, marking the end of a tumultuous week influenced by a variety of factors, including concerns over the US federal debt ceiling.

China’s April data show economic recovery losing steam, testing policymakers

Tuesday’s batch of data, which also showed a further decline in property investment, adds to concerns about the outlook for the world’s second-biggest economy as both its domestic and export engines of growth remain underpowered.  

Equichain Wealth Advisors: Market View & Opinion

We believe equity market continue to ignore the negative economic factors in near terms as they focus on earnings season.  Most of the companies came with decent set of result except few disappointments as market went into earning season with low expectation.   

We do believe this trend can’t continue for long, on one hand there is debt crisis and on other hand interest rate continue to rise although at declining pace and market continue to trade near its recent high. 

Either there should be pivot as far as interest rate policy is concern or market should witness sharp correction from current level which could reflect current economic data.

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Daily Reports

Daily Report 19-May-23

Wall Street stocks closed higher for a second straight day on Thursday on mounting optimism that a U.S. debt ceiling deal could be reached within days.

SBIN result beat market expectation, but pre-positioning going into result led to profit booking post result above estimate.

US 10-year above 3.65% & Dollar Index @ 103.46.  Gold trading around $1960 on strong weekly unemployment claim.  Crude oil remains steady as US Dollar rises.

F&O data: FII in index futures added 6578 contracts at net long, position remains 49%:51%.  Nifty & Banknifty PCR continue to trade in narrow range indicate mix view.

Approach on Indices: SGX Nifty indicate positive opening by 20 – 30 points.  We believe indices could have catch-up rally going into weekend and remain bullish till Nifty @ 18137 & Banknifty @ 43552 hold

SGX Nifty @ 18211 up 33 points at 8:20 AM

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Daily Report 18-May-23

U.S. stocks rose sharply on Wednesday, fueled by optimism over a potential deal on the $31.4 trillion federal debt ceiling and as a rebound in regional bank shares eased concerns about an escalation in the sector’s troubles.

Crude oil rallied post optimism on debt ceiling limit.  US 10-year bond yield back above 3.50% and Dollar Index near to 103 level.

SGX Nifty indicate 50-points gap-up opening on positive global cues, SBIN result is expected during market hours, we expect high volatility due to SBIN result and weekly options expiry.

F&O data: FII added net short by 6156 contracts in index futures.  Index long: short remains at 47.46%:52.54%.  Nifty 18300 Call & 1800 PUT.  Banknifty 44000 Call & 43500 Put are key options to watch.

Approach on Indices: SGX Nifty indicate higher opening, SBIN result if declared during market hours could provide wild swings as weekly options expiry to play its role.  Today is the day for surprising bounce.

Market View: After few days of cautious approach and yesterday’s correction, we have turned bullish with a view that Indices may test their recent highs which is Nifty around 18400 – 18450 & Banknifty around 44000 – 44200.  SBIN result could trigger making fresh all-time high on Banknifty.

SGX Nifty @ 18289.50 up 57.50 points at 8:30 AM

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Daily Reports

Daily Report 17-May-23

Wall Street closed lower as forecast from Home Depot was disappointing.  U.S. Retail sales & Core retail sales came below market expectation.  

Chinese yuan breaches 7 level, cast doubt on post COVID economic recovery.  Recent drop in YUAN comes at disappointing economic data.  JAPAN prelim GDP q/q beat market estimate, Japanese stocks rises on positive data.

BHARTIARTL result mix, Profit beat market estimate, ARPU @ 193, Revenue growth and EBITDA came below market estimate.

F&O data: FII after 1 day of short covering, again added net short in Index futures.  Nifty PCR @ 0.90 Vs 1.35 previous.  Banknifty PCR @ 1.05 Vs 1.42 previous.  

Approach on Indices: SGX Nifty indicate weak opening by 40 – 50 points, we expect indices to remain soft ahead as profit booking expected to test lower level on Nifty @ 18137 & Banknifty @ 43181.  RSI on Indices moved below 70 level indicate further correction.

SGX Nifty @ 18289 down 40.50 points at 8:00 AM

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Daily Reports

Daily Report 16-May-23

Wall Street had another quite but positive session.  Empire state manufacturing index came at -31.8 Vs estimate of -3.7 indicating slow-down.

India trade deficit at 20-month low at $15.24 billion, exports shirk 12.7% in April.  Imports too decline by 14%, fifth month in a row to USD 49.9 billion.

Windfall tax on crude oil output cut to zero from 4100 per Ton, to benefit oil production companies like ONGC & RELIANCE.

VIX @ 13.17: moving towards 14 level.

F&O data: FII added 14047 contracts in index futures, net long: short is now at 49.90%:50.10%.  Nifty PCR @ 1.35 Vs 1.24 previous and Banknifty PCR @ 1.42 Vs 1.28 previous.

Approach on Indices: Banknifty do indicate highly overbought zone, next round of rally could be supported by short covering, as Banknifty is now in unchartered territory.  However, we remain cautious and expect some correction.

SGX Nifty @ 18455.50 up 52 points at 8:10 AM

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Daily Report 15-May-23

Wall Street had another muted session, as U.S. debt ceiling & regional banking crisis continue to drive sentiment.

KARNATAKA: Congress gets clear majority, there is divided view on its impact on national politics or LS 2024 election.  

India’s CPI inflation data came @ 4.75 Vs estimate of 5.1% & previous month CPI data @ 5.66%.  IIP data came @ 1.1%

Commodities trade lower: WTI Crude oil below $70 & Brent crude oil below $75.  Copper, Aluminum & other metal trade lower.

F&O data: FII long: short position in index futures stands at 46.12%:53.88%.  Nifty PCR @ 1.24 Vs 1.25 previous.  Banknifty PCR @ 1.28 Vs 1.06 previous.

Market View: KARNATAKA election & global cues remain weak; we expect weak opening could see further selling pressure through the day.  TATAMOTORS & DLF came out with result after market hours on Friday will be in focus – both companies have delivered positive surprise.

SGX Nifty @ 18279.50 down 44.50 points at 8:35 AM 

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15-May-23 Daily-Report.pdf
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Weekly Reports

13-May-23 Technical & Fundamental Insight

Last week – review

Last week, major fall came on Friday on news of HDFC & HDFCBANK leading the fall.  This week’s rally is almost same as last Friday’s fall.  Indices took support at lower level and face supplied at higher level as market continues to trade in range.  Corporate earnings continue to drive market and will continue to do so.

Technical Insight

• Nifty RSI @ 68.99 & RSI average @ 68.09.  Nifty range of 18137 to 18498 remain very important.  Nifty RSI trading near 70 level which is considered as over-bought zone.

• Banknifty closed at 43793 above last Thursday’s day high of 43739 can be considered as fresh break-out.  Banknifty around 43125 level now remains important support level.

Approach on Technical: Indices are showing some sign of distribution at higher level.  Indices had rallied of more than 7% – 9% on Nifty & Banknifty without any major correction.  

Nifty @ 18137 & Banknifty @ 42685 are important support level we are looking for, Indices after consolidation this week may continue its towards its target of Nifty @ 18498 & Banknifty towards 44020 & 44151.

Fundamental Insight

1) India’s CPI Inflation Falls To 18-Month Low In April
2) IIP: India’s Industrial Output Grew 1.1% In March
3) India’s Forex Reserves Jump By $7.2 Billion To Nearly $596 Billion

Market View & Strategy

KARNATAKA election result will impact Monday’s opening, global cues continue to keep market on edge.  India’s CPI inflation data came at 4.7% will be positive whereas IIP data showing growth concern will be negative for market sentiment.

Our strategy this week would be to continue to focus on booking profit on market rally & stock rotation.  We would prefer to deploy fund only in case of there is major correction.  We are worried about global cues could bring correction and increase in volatility which could trigger correction in Indian market as well.

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Global Market – U.S. debt ceiling & reginal banking crisis

Global Market – U.S. debt ceiling limit & regional banking crisis

This week we will focus on U.S. debt ceiling limit, crisis at regional banks as deposit continues to flees small and regional banks move towards treasury and big banks.  We will also discuss BOE action this week and China’s economy showing slow pace of economic recovery.

U.S. debt ceiling limit at $3.4 trillion

U.S. national debt surpassed $31 trillion for the first time October 2022, according to the Treasury Department. A whopping $8 trillion were added since the start of the coronavirus pandemic in early 2020.

In a letter to Treasury Secretary Janet Yellen, current and former leaders of the Treasury Borrowing Advisory Committee said the costs of the current standoff extend beyond markets to the time that financial firms are having to spend preparing for a possible default.

BOE Raises Key Rate To 4.5%

The UK central bank lifted its key rate a quarter point as expected to 4.5%, with two of the nine-member Monetary Policy Committee voting for no change.

China’s Weak Inflation, Borrowing Show Economic Recovery Waning

Consumer inflation weakened to a two-year low of 0.1% in April, the National Bureau of Statistics said Thursday, as food and energy costs eased.

PacWest deposits fell 9.5% or $1.5 billion last week – U.S. regional banking crisis

Shares of PacWest Bancorp (PACW.O) plunged 23% on Thursday, 11-May-23 after the Los-Angeles-based lender said its deposits declined and that it had posted more collateral to the U.S. Federal Reserve to boost its liquidity.

Equichain Wealth Advisors: Market View & Opinion

U.S. banking crisis or debt ceiling limit problem is yet to have any significant impact on financial market.  Although sentiment remain weak, global asset class continue to trade in narrow range.

It is surprising to many experts and market participants that, how all global stocks market continue to trade near its recent highs.  We would prefer balancing approach and would prefer to increase cash level in cash of any major correction due to unforeseen reason which we have discussed today and any other reason which could surprise global market.

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Global Market – U.S. debt ceiling limit & regional banking crisis.pdf
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Daily Reports

Daily Report 12-May-23

Nifty closing around 18300 & Banknifty around 43500 as weekly index options expiry guides weekly index options expiry.  

Wall Street seen in under pressure as US regional banking crisis was back in focus as PACWEST lost more than 9.5% of its deposit in last week.  

US Debt ceiling limit keeps market on edge, President Biden ‘s meeting with congress men postponed to next week.  U.S. treasury secretary Janet Yellen will discuss debt ceiling with bank lobby group.

KARNATAKA election result tomorrow on 13-May-23, will impact market on Monday.  Exit poll had little impact on market.

VIX @ 13.22: slowly moving towards 14 level.

Approach on Indices: Indices are in consolidation zone for some time now, we do expect decisive move on reaction to KARNATAKA election result.  Banknifty continues to remain strong compared to Nifty.  SGX Nifty indicate gap-down opening of 60 – 80 points, however we do see limited downside for today.

SGX Nifty @ 18278.50 down 71.50 points at 8:20 AM

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12-May-23 Daily-Report.pdf
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