Author: equichain

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Daily Reports

Daily Report 13-Jun-22

Wall Street was down from 2.73% to 3.52% as growth stocks continue to drag market down.  Going into US FOMC meeting outcome on 15-Jun-22, risk-off continues

Meltdown in Crypto currency continues as Bitcoin now below $26000.  Dollar Index @ 104.373 & US 10-year bond yield @ 3.20%.

VIX @ 19.58: today likely to open around 22 level.  We would turn cautious if VIX crosses 25 level.

Approach on Indices: SGX Nifty indicates opening around 15860 level, back to March & May 2022 lows, approaching 3rd time. 

Market View: Market approach “Play for June – Technical bounce” now seems to be over and we need to closely watch whether the market is able to hold on to it.  Global risk-off continues as tight monitory policy will money will move to safe asset classes.

Wall Street was down from 2.73% to 3.52% as growth stocks continue to drag market down.  Going into US FOMC meeting outcome on 15-Jun-22, risk-off continues

Next major event for global market is US FOMC meeting outcome on 15-Jun-22.  Indian market will react to it on 16-Jun-22.  Indian inflation & IIP data due to released today & WPI data to be released on 14-Jun-22.  Remain light & prefer hedge position.

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Daily Reports

Daily Report 9-Jun-22

RBI MPC policy: Repo rate hike by 50 bps, no CRR hike, stance remain at “Withdrawal of Accommodation” Initial reaction to RBI Policy was positive but market failed to hold on to gains.

Wall Street ended with around 1% cut, as chip maker Intel was down more than 5% after CITI cut its earning estimate.  

Crude oil at 13-week high, Brent crude oil near $125.  US 10-year bond yield back above
3%.

VIX @ 19.84: Market showing weakness, any sharp increase in VIX could bring more volatility, if VIX above 22 – time to turn cautious.

Approach on Indices: Closing on Nifty below 16366 & Banknifty below 34860 – could open downside level of tested in May 2022.

Market View: RBI event failed to trigger rally in market is a cause of concern, ECB meeting outcome today & US inflation data on Friday will provide further cues.  

Nifty PCR @ 0.72 indicates – market is currently in oversold zone ahead of weekly options expiry today.  

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Daily Reports

Daily Report 8-Jun-22

Going into RBI MPC outcome today at 10:00 AM, global cues are positive as SGX Nifty indicates opening around 16500.  Market will take further directional view from policy outcome today.  

World Bank cuts India economic forecast for FY23 to 7.5%, In April this year World
Bank had revise GDP forecast to 8% from 8.7% earlier.

Approach on Indices: Nifty above 16752 & Banknifty above 35693 could open up further upside with yesterday’s low as potential reversal.

India’s 10-year G-Sec have crossed 7.50%, higher bond yield will be negative for PSU Banks as it would reduce treasury gains.  Tomorrow’s ECB meeting will also be an important event for global market.

SGX Nifty @ 16508 up 83.50 points at 8:05 AM.  We are expecting no major surprise from RBI MPC policy and expect market to react positively post event.  We see fear & pessimism is overdone and current level & will review if lower level are tested again.

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Daily Report 7-Jun-22

Indian market ended flat, with weak opening manage to turn flat and closed with minor loss.  Cement stocks continue to witness selling pressure taking cues from Friday.  

Wall Street ended mix with Growth stocks doing well, but inflation concerns are back in focus as Natural Gas prices hits record high @ $9.384.  US 10-year back above 3% and near to high in May 2022, currently @ 3.05%.

SGX Nifty @ 16456 down 116 points at 7:55 AM

Approach on Indices: Next decisive move is expected tomorrow post RBI MPC policy outcome.  Till Nifty is holding 16366 & Banknifty @ 34860 today’s dip could be buying opportunity, but expect event base volatility.

Defense stocks will be focus as Defense ministry approve 76k crore upgradation through indigenous companies.  It could be big boost for domestic defense companies.  Defense theme continue to remain robust – most of companies have order book 2x – 3 x of last year total Sales.

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Daily Report 6-Jun-22

Indian market gave up early gains on Friday after gap-up opening and facing resistance on Nifty around 16752 – 16800 level, going into important US Jobs data.

US Jobs data on Friday: Non-Farm Employment change came actual at 390k Vs estimate of 325k – was ahead of expectation, strong data lead to growth stocks correcting.  

SGX Nifty @ 16518 down 71 points at 8:10 AM.

Technical Highlight: Nifty correction from 17377 to 15740 – retracement @ 61.8% comes at 16752 – Nifty corrected from this level.

Defense sector will continue to provide hiding opportunity or momentum play, Banking stocks will be in focus and we expect some positive build up going into event.  Today’s weak opening is on back of global news, but remain positive going into Monday’s trade.

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Research Report

Global Report – Food Inflation & Energy Inflation

This week we will discuss inflation concern comes mainly from food inflation and another important contributor to inflation is high energy prices (Oil & Gas).   After Russia-Ukraine crisis since 24-Feb-22 and sanctions on Russia by US & other European countries inflation have sky rocketed.

Food inflation

The FAO Food Price Index dropped 0.6% mom to 157.4 in May of 2022, the second month of declines, but still remained close to a record high of 159.7 points hit in March.

Energy inflation – Crude oil & Natural Gas

OPEC+ meeting delivered only a modest increase in output despite speculations of a bigger supply boost. 

The group of major producers decided to increase output by 648,000 barrels per day in July and August instead of the previously agreed 432,000 bpd, in a move that was seen as hardly enough to compensate for lost supply from Russia.

Central banks meeting this month will try to do a balancing act and try to calm the market but Central banks could do very little to solve supply side problem and could end up doing destruction in an attempt to bring inflation down.

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Weekly Reports

4-Jun-22 Technical & Fundamental Insight

Last week – review

In our Daily / Weekly view we did mention of Nifty likely to test 16752 level, tested yesterday.  Banknifty underperform this week, an outperformance would have taken Banknifty to 36718 level which remains our target.

US Market after around 6% rally in previous week, this week ended with cut of around 1%.  US market – focus continues around US FOMC meeting outcome and economic data.

RBI focus will also remain to keep 10-year G-Sec at manageable level as Government borrowing may increase by 1 lakh crores more due to announce in Petrol & Diesel excise cut.

For short term: Play via hedge position & in equity market – prefer to buy as per conviction in case of huge fall this week with medium to long term view.  Market may give healthy bounce back.  For sustainable bounce – Central Banks events this week – RBI MPC & ECB need to be turned out be positive.  Going into event with positive view and aggressive long after confirmation from event outcome.

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Daily Reports

Daily Report 3-Jun-22

US Economic data: ADP Non-Farm Employment change – Actual 128K Vs estimate 295K.  Weak data.  All eyes are set on data to be released on Friday – 1) Average Hourly earnings m/m, 2) Non-Farm Employment Change & 3) Unemployment rate.

Indian’s trade deficit data for May 2022: deficit widens to $ 23.33 billion.  Petroleum & Crude oil import surged to by 91.6% to $18.14 billion.  Gold import increased by $5.82 billion.

Approaches on Indices: We have mentioned “Play for June – Technical bounce” Nifty indicates opening above 16750, can add long around this zone.

Today SGX Nifty indicates opening 1 % higher on weak US Data and US Fed vice chair’s comment.  It is very much about central banks actions this month.  Nifty with 16362 could act is immediate support level and any trend reversal only once March & May 2022 low is broken around 15740 – 15780.

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Daily Reports

Daily Report 2-Jun-22

Global factors continue to drive Indian market.  India’s GST Collection figures for April & collected in May were at 1.40 lakh crores.  Auto sales for May month was little below expectation – failed to create positive surprise.

US Economic data continues to drive global sentiment.  US ISM Manufacturing data & JOLTS Jobs opening data – Strong compared to estimate, impact >> Dollar Index @ 102.575 & US 10-year @ 2.92%.

VIX @ 20.84: Move again above 24 – 25 level – will turn cautious.  VIX at current level ahead of event is normal.

Approach on Indices: Weekly options expiry could limit downside and surprise rally not ruled out as Banknifty is showing strength.  

Market View: Recent rally can be termed as short-covering or relief rally and sustainable rally only post RBI MPC meeting, ECB & US FOMC meeting outcome.  Today & tomorrow US jobs data will provide important cues ahead of RBI MPC meeting outcome on 8-Jun-22.

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Daily Reports

Daily Report 1-Jun-22

Indian market ended flat after 3 days of rally and up move of 4% on major Indices.  Indian market corrected ahead of Biden-Powell meet.

Q4FY22 GDP growth @ 4.1% higher than estimate at 3.9%.  FY22 GDP growth @ 8.7% in line with estimate.  Fiscal deficit data: @ 6.7% Vs expectation of 6.7%.

Wall Street corrected post comment from Biden – Powell meeting were released.  Focus clearly remains on inflation.

Crude oil cooled-off from high after OPEC+ nations mulled Russia exclusion from group output.

VIX @ 20.48: Expect to consolidate in range of 20 – 22, any sharp increase in VIX surge to seen carefully as central banks meeting will remain key events this month.

Approach on Indices: We continue to believe; this month could provide opportunity for sharp bounce and we would prefer to take entry on Nifty @ 16362 & on Banknifty around 34863.

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