Author: equichain

Categories
Daily Reports

Daily Report 31-May-22

Indian market recorded another strong day led by IT stocks, Banknifty underperform as now focus will shift to RBI MPC meeting next week.

US Market was closed on Monday on Memorial Day.  US President Biden to meet US Fed chairman Jerome Powell on Tuesday.  President said primarily responsibility of US Fed is to control inflation, he also said not to influence decision.

VIX @ 19.98: Cooled-off below 20 level, we expect VIX to remain in 20 – 22 range and volatility to remain low compared to last few weeks.

Approach on Indices: SGX Nifty indicates soft opening, another round of rally led by banking stock would not surprise, but after a day on consolidation.

After 3 days of rally, consolidation would be healthy and could provide entry opportunity.  With result season now over, India’s Q4FY22 & FY22 GDP data will be released today.  Our market will continue to take cues from global market and central banks meeting this month will remain in focus.

Click on the attachment to read the full report:
31-May-2022-Daily-Report.pdf
View Document
Categories
Weekly Reports

28-May-22 Technical & Fundamental Insight

Nifty ended volatile session with minor gain of 0.53% on Nifty, 1.03% gain on BSE Sensex & Banknifty gained 3.90% on weekly basis.

We would like to highlight focus on Mid-Cap 100 which ended -0.77% & Small-Cap 100 which was down by 3.42% on weekly basis.  VIX was down 7% at 21.48.  

US market witness major fall in week between 23-Apr-22 to 27-Apr-22, so if compared US market from 20-Apr-22, US indices are still down by 5.4% to 9.83% on Nasdaq mentioned below.  Please find change compared 27-May to 29-Apr & 20-Apr-22.

We change our approach to “Play for June – Technical bounce” before market do a reality check in Q1FY23 result season which starts from 1st or 2nd week on July.  We may review our view in case recent lows around 15780 are tested and sudden change in narrative as we witness this week.

Key events this month to watch out for will be Central banks meeting which we expect would like to avoid recession and allow higher inflation for some more time before they move towards tight monitory policy.

Click on the attachment to read the full report:
28-May-22 Fundamental & Technical Insight.pdf
View Document
Categories
Research Report

Global Market – Recession fear – Before Central Banks run its full course

Global Market – Recession fear deepens even before Central banks steps run its full course.

Before we share our view on global factors and market reactions which did witness a change in narrative and central banks are now more focus on avoiding recession.  Key objective of central banks is to maintain price stability & robust growth environment.  It always has a balancing act to do to control pendulum moving on either side to extreme.

1) U.K. Slaps 25% Windfall Tax On Profits Of Oil And Gas Firms
2) Xi-Li Discord Paralyzes Officials Responsible For China Economy
3) U.K. Recession Risk Makes BOE Wary Of Acting On Inflation, Pill Says
4) Supply Woes Raise Recession Risk As Fed Rejects Inflation Nuance

If next quarter US GDP data turns negative, then officially it can be termed as recession, but as of now market is expecting rate hike by 50 bps each by US Fed in upcoming June 2022 & July 2022 meeting.  So, the big question how central banks will do balancing act.

We believe, Central banks will move slowly on monitory tightening because it will be tough for them to reverse their policy on interest if the move too fast from here on.  Any sudden reversal on policy front will also hurt their credibility. 

Click on the attachment to read the full report:
Global Market – Recession fear deepens even before Central banks steps run its full coursed-recession-fear.pdf
View Document
Categories
Daily Reports

Daily Report 27-May-22

Indian market rallied sharply on last day of F&O expiry for may series.  In a highly volatile session, at one point Nifty was at 15900 level but recovered sharply to close above 16100 level.

Wall Street rallied 1.61% to 2.68% as result and weak economic data kept market upbeat.  Dollar Index currently @ 101.495, significantly below 105 level seen recently.  Dollar index decline – indicates risk-on sentiment.

VIX @ 22.84: decline 9.67% – significant cool-off from 25 level.  VIX could hold above 20 level as we are heading for RBI MPC meeting on 8-Jun & US FOMC meeting outcome on 15-Jun-22.  We will turn cautious only if VIX goes above 25 again.

Finally, the shake-off is over with F&O expiry series for May 2022? We believe highly volatile & wild swings may be behind us.  Time to play for decent bounce back rally before some reality check again in next quarterly result season with begins on 1st week of July.  

SGX Nifty @ 16267.50 up 91.50 points at 8:15 AM

Click on the attachment to read the full report:
27-May-2022-Daily-Report.pdf
View Document
Categories
Daily Reports

Daily Report 26-May-22

Indian market ended on weak note as Mid-Cap 100 was down by 2.45% & Small-Cap 100 down by 3.46%.  Banknifty ended on flat note.

US FOMC Meeting minutes: 50 bps hike for next couple of meetings – June 2022 & July 2022.  No mentioned of word recession & no hint on September 2022 rate hike.

Approach on Indices: SGX Nifty indicates opening around 16080, F&O data indicates call writing at 16200 strike and on Banknifty call writing seen at 35000 strike and put writing seen at 34000 strike-price.

Market View: US FOMC minutes is out, Mid-Cap & Small-Cap carnage seen this month.  We see the shake-off is near to an end.  US prelim GDP q/q to be released today & India’s GDP data will be released on 31-May-22.  Time to change view to conviction buy – as valuation are attractive.

Stocks in focus: ICICIBANK, HDFCBANK & HDFC and banking stocks for expiry move.  COALINDIA, APOLLOHOSP & INDOGO will react to result.

SGX Nifty @ 16104.50 up 83.50 points at 8:05 AM

Click on the attachment to read the full report:
26-May-2022-Daily-Report.pdf
View Document
Categories
Daily Reports

Daily Report 25-May-22

Indian market ended volatile session with a cut of around 0.50% on Nifty & Sensex, Banknifty manage to close flat.  VIX rose more than 9% to close at 25.64.

Approach on Indices: Nifty will turn weak below 16008 & Banknifty below 33878.  Indices remain in positive / range bound move till these levels are held.

Nifty @ 16008 & Banknifty @ 33878 remains support for any possibility of short covering.  US FOMC meeting minutes – any comment on recession could or aggressive rate hike could be negative, another 50-bps hike for next 2 round is broadly expected.

VIX @ 25.64: yesterday increase by 9.5% and close above 25 level, we expect it could lead to high volatility as fear premium is getting build in.  Today’s indicative opening is around 50 – 70 points higher.  Unless VIX cool-off – we expect crazy volatility.

SGX Nifty @ 16185.50 up 71.50 points at 7:50 AM.

Click on the attachment to read the full report:
25-May-2022-Daily-Report.pdf
View Document
Categories
Daily Reports

Daily report 24-May-22

Indian market ended with minor cut after spending most of the day in positive territory.  News over the weekend on cut in excise duty on fuel, reduction in import duty and fresh export duty on metal duty.

Metal stocks witness blood bath as most of the stocks were down around 10% as it will significantly reduce their realisation value.

VIX @ 23.40: continue to remain at elevated level, yesterday during market closing VIX was trading at 23.89. VIX above 25 could bring ugly move on downside.

US market rallied from oversold zone taking momentum from Friday.  With limited domestic cues, Indian market will continue to take its cues from global market.  US Fed chair Powell speech today will provide fresh cues – inflation remains key concern as Government of India may go for more duty cuts to bring down prices.

Click on the attachment to read the full report:
24-May-2022-Daily-Report.pdf
View Document
Categories
Daily Reports

Daily Report 23-May-22

Indian market on Friday witness mega short covering rally, Indices recovered entire loss made on Thursday.  

Wall Street recovered in last 50 min of market closing on Friday to recover all the loss and end the day flat.

On Saturday, FM cut excise duty on Petrol by Rs 8 & Diesel by Rs 6 – which will be approx. revenue loss for government at Rs 1 lakh crore per year.  Government plan to increase borrowing by the same amount this fiscal.

VIX @ 23.10 – trading above 20 comfort level & in case moves above 25 – volatility could even get ugly.

Market entering into final F&O week with mix set of cues and highest volatility seen last week.  We expect volatility to continue to be over 300 – 400 points move on Nifty on daily basis.  With inflation in focus – Global cues will continue to drive market.

Click on the attachment to read the full report:
23-May-2022-Daily-Report.pdf
View Document
Categories
Research Report

Global Market – US corporate earnings & China re-opening & Recession fear

US retail sales grew at a solid pace in April, reflecting broad-based gains and suggesting demand for merchandise remains resilient despite rampant inflation.

China’s economy is paying the price for the nation’s Covid Zero policy, with industrial output and consumer spending sliding to the worst levels since the pandemic began and analysts warning of no quick recovery.

Goldman Sachs Senior Chairman Lloyd Blankfein urged companies and consumers to gird for a US recession, saying it’s a “very, very high risk.”  

The ruble surged to the highest level in seven years against the euro as more European companies appeared to be complying with Vladimir Putin’s demand that they switch to paying in Russia’s currency for natural gas.

US Fed has started tightening from March onwards and corporate result are already seeing impact on its margin due to high inflation.  So, the big question based on key points mention in this article is – US heading for recession?  Have global market after current fall have factored in recession prices??

Click on the attachment to read the full report:
Global-Market-US-Corporate-earnings-and-Chinas-reopening-and-recession-fear.pdf
View Document
Categories
Weekly Reports

21-May-22 Technical & Fundamental Insight

Indices witness highly volatile week in recent times, but most of the volatility was in range of 15750 – 16400.  Indices have gained on weekly basis around 3% – 4% and VIX was down 1.66% but continues to trade at 23.10, which is above comfort level of 20.

Daily volatility of 400 points on Nifty was 3 out of 5 trading days.  It is not a normal scenario and technical indicators change too fast and at times be misguiding.

Increase in VIX above 25 – indicates fear and that would normally come in a falling market.  

We are entering very critical week & final F&O expiry for May 2022 series this week.  

Probable Negative play: Nifty below 15782 & VIX above 25

Probable Positive play: Nifty above 16362 & VIX below 20

Result season in India will conclude by 30-May-22, most of companies have declare their Q4FY22 result.  So far major trend has been “Sell-on-Rise” and this may soon change to “Accumulate Gradually” level.  

Why market was volatile this week?

Click on the attachment to read the full report:
21-May-22 Fundamental & Technical Insight.pdf
View Document