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Daily Reports

Daily Report 6-Jul-23

Wall Street had muted session with minor cuts as US FOMC meeting minutes revealed hawkish signal and indicated rate hike on 26-Jul-23, next US Fed meeting.

Reacting US FOMC meeting outcome, US 10-year bond yield is now trading a 3.95% & Dollar index at 103 indicates further rate hike expected.

Crude oil prices remain steady, WTI Crude @ $72 & Brent crude trading around $77 level.  Base metal prices remain stable.

F&O data: FII added 4605 contracts in index futures, net long position now at 72.39%.  Nifty PCR @ 1.37 Vs 1.47 previous.  Banknifty PCR @ 1.08 Vs 1.38 previous.

Approach on Indices: GIFTNIFTY indicate flat to negative start, with weekly F&O expiry, today could be a day of big correction which is overdue for some time now.  On lower side Nifty @ 19154 & Banknifty @ 44530 to act as strong support level.  

GIFTNIFTY @ 19488 down 24 points at 8:00 AM

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Daily Reports

Daily Report 5-Jul-23

U.S. market was closed on 4-Jul-23 for Independence Day.  Monthly economic data will be released later this week and US FOMC meeting minutes to be released tonight.

HDFCBANK quarterly business updates shows mix trend on merge entity.  HDFCBANK standalone business updates – loan growth at 15.8% & deposit growth at 19.2%.

LTIM to replace HDFC in Nifty from 13-Jul-23.  HDFC to de-list at trade as merge entity with HDFCBANK from 13-Jul-23.

F&O data: FII long position now stands at 71.89% or by 89765 contracts.  Nifty PCR @ 1.47 Vs 1.48 previous and Banknifty PCR @ 1.38 Vs 1.39 previous.

Approach on Indices: Run-up on indices is too fast supported by short covering, we would wait for correction to take fresh long and expect correction from current level.

GIFTYNIFTY @ 19498.50 up 5 points at 8:40 AM

Market View: Broder market sees some sign of consolidation; we would continue to follow strategy to increase cash level on rally and take opportunity to take fresh view on long position on correction & consolidation.  Q1FY24 result season will be key and provide further cues.  Quarterly business updates so far has been in-line with recent rally.

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Daily Reports

Daily Report 4-Jul-23

Wall Street had muted session in a holiday shorten session followed by holiday on 4-Jul-23 on U.S. Independence Day.

Quarterly business updates from BAJFINANCE recorded growth of 32% on yearly basis.  In Q1FY23 recorded highest ever AUM growth.

IDFC & IDFCBANK set to merge: IDFC Ltd share holder to get 155 shares of IDFCFIRSTB against 100 shares of IDFC.

VIX @ 11.54: moved above 11 as market witness profit booking.

Approach on Indices: Momentum remains strong, but looks stretched from current level.  We would wait for correction / consolidation for fresh entry.   GIFTNIFTY indicate flat opening and we expect indices to see some selling pressure / supply at current level.

GIFTNIFTY @ 19456 up 17 points at 8:15 AM

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Daily Reports

Daily Report 3-Jul-23

Wall Street continue to rally on Friday ahead of holiday shorten week in US and major jobs data by end of this week.  NASDAQ was up by 1.45% as tech stocks continue to do well.

China’s Caixin PMI continue to show weakness, eased to 50.5 from 50.9 indicate marginal expansion as 50 level mark separates expansion from contraction.

SGX Nifty to trade as GIFT NIFTY from 3-Jul-23, derivative contract with notional value of about $7.5 billion will shift to GIFTNIFTY.

F&O Data: FII added 16333 contracts in index futures, net long position now stands at 72433 contracts.  Net long: short contract now stands at 69.21%:30.79%.

Approach on Indices: Indices in unchartered territory, Nifty @ 19362 & Banknifty @ 44959 could be next target / resistance level and support level on Nifty @ 18932 & Banknifty @ 44253.

GIFTNIFTY @ 19365 up 20 points at 8:20 AM

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Research Report

Global Market – China’s economic recovery hits road block

Global Market – China’s economic recovery hits road block

This week we will discuss China’s growth momentum slows further and need further stimulus.  China’s Central bank PBOC continues its support for YUAN as currency continues to weaken.  China after following strict COVID policy since March 2020 has removed strict restriction from 8-Jan-23.

China June PMI @ 49 – reading below 50 is contraction

Speculation about potential policy support has been mounting as the recovery for the world’s second-largest economy loses traction. After a burst of activity in the first quarter, consumer spending is slowing. The housing rebound has fizzled, exports have weakened and infrastructure investment has been muted, too.

China’s PBOC Sticks with Yuan Support as Currency Losses Deepen

The central bank set its so-called fixing for the managed currency at a stronger-than-expected level on Friday, after the offshore yuan extended a seven-month low. The move came after reports that regulators have stepped up scrutiny of currency trading and cross-border capital flows, in a bid to stabilize the yuan.

China removes strong COVID restriction from January 2023

China after following zero tolerance COVID policy for more than 2 years since COVID in March 2020 has taken steps to remove restriction from January 2023 and support economy.   Travelers coming into China were required to follow COVID restriction policy and go through quarantine period before of 7 days.

Equichain Wealth Advisors: Market View & Opinion

The People’s Bank of China will likely reduce the rate on its one-year policy loans — known as the medium-term lending facility — by 5 basis points to 2.6% in the final quarter of this year, according to the median estimate in the latest quarterly survey.

China economic data continues to show worrying sign where as US Fed, ECB & BOE continues to raise rates as inflation remains key risk in developed economy.  Inflation is not a concern in China – 2nd largest economy.   Global market continues to trade near its recent high market is factoring in some kind of stimulus and any weakness in economic recovery will be blessing for market and risk-on sentiment.

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Weekly Reports

1-Jul-23 Technical & Fundamental Insight

Last week – review

We went into last week with muted expectation, but indices witness healthy rally in a holiday shorten week and F&O expiry.  HDFCBANK & HDFC merger will be effective from 1-Jul-23 and that trigger huge rally in HDFC twins.  All major indices were up by around 2.5% recording in one of the best weeks in recent times.

Technical Insight

• Nifty RSI @ 72.04 & RSI average @ 64.08.  Nifty RSI back to above 70 level and gap between RSI & average has more than 8 and indicate overbought zone in near term.

• Banknifty RSI @ 65.36 & RSI average @ 55.93.  Banknifty gap between RSI & RSI Average is around 10 points indicate overbought zone.

Approach on Technical: Indices rally this week was sharp which has increase gap between RSI & RSI average by 8 to 10 points on Nifty & Banknifty, indicate overbought zone in near term.

Our strategy this week would be seek buying opportunity around on Nifty around 18932 & 18765 & Banknifty around 44530 & 44253.  Going into trade next week do indicate overbought zone and current momentum could take indices higher on Monday before we expect some cool-off or profit taking.

Fundamental Insight

1) Share Of Loans Bearing Over 9% Interest Rate Hits 56.1% In March, Says RBI
2) Commerce Minister Asks Bankers to Ensure Enhanced, Affordable Credit to MSME Exporters
3) HDFC Bank-HDFC Merger To Be Effective July 1

Equichain Wealth: Market View & Strategy

This week, SGX Nifty will start to trade in GIFT CITY from Monday 3-Jul-23 and will be now know as GIFTNIFTY.  Market momentum remains strong and major economic data will come only later in the week.

Our strategy going into this week will be to find suitable entry opportunity and would be preferred on decline and will continue to maintain exposure around 70% to 85% as we mentioned in last week.  We would continue to seek opportunity with basket of stocks and place our allocation to be beneficial going into result season.  We are optimistic on Banks & infrastructure and have cautious view on IT sectors.

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Daily Reports

Daily Report 30-Jun-23

Wall Street gain on Thursday as bank outperforms and tech stocks take a breather after outperformance in recent times.  S&P500 index up by 0.45%.

HDFCBANK & HDFC lead the indices to new high as merger date finalized.  HDFCBANK & HDFC is all set to merge effective from 1-Jul-23 & will trade as merge entity from 13-Jul-23 likely.

US 10-year bond yield rises to 3.84% & Dollar Index currently trading at 103 after comment of Fed chair on further rate hike by end of year.  China’s PMI shrinks for the third straight month in June.  

F&O data: FII rollover @ 87%, net long: short remains at 66.42%:33.58%.  Nifty PCR @ 1.41 & Banknifty PCR @ 1.30.

Approach on Indices: SGX Nifty indicate flat to positive opening, could continue to see positive movement, but we would wait for dip or correction any fresh entry

SGX Nifty @ 19185 up 35 points at 8:00 AM

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Daily Reports

Daily Report 27-Jun-23

Wall Street ended with losses as NASDAQ was down by 1.16% as recession fear as investor believes that aggressive rate by US Fed could lead to economic slowdown.

Mid-cap 100 was up by 0.92% & Small-cap up by 0.62% indicate positive momentum may continue after negative close last week.

Commodity continues to remain near lower as China’s recovery fail to cheer the market.

F&O data: FII net buyer by 2023 contract in index futures, net long: short position remains at 53.26%:46.74%.  Nifty PCR @ 0.93 Vs 0.93 previous.  Banknifty PCR @ 0.84 Vs 0.88 previous.

Approach on Indices: Indices trading in narrow range with low volatility for quite some time now, we expect some increase in volatility as just two trading day for F&O expiry for June series.

Market View: We would prefer to book profit and reduce exposure and wait for better clarity.  Market seeing supply at higher level as global cues remain mix and no much fresh news to guide market in near term.  

SGX Nifty @ 18736.50 up 32.50 points at 8:00 AM

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Daily Reports

Daily Report 26-Jun-23

Wall Street was down by 0.65% to 1.01% as economic worries continues to weigh on sentiment.  Rate hike of 50-bps to 5.00% by BOE surprised market participant.

Russia’s political crisis seems to be de-escalated over the weekend but may continue to remain an important geo-political event to watch out for, crude oil rises on Monday morning as supply may be impacted.

SGX Nifty indicate flat opening going into trade on Monday morning for final F&O expiry for June series.

VIX @ 11.24: continue to trade near lower end of the range.

Approach on Indices: Technical do indicate further correction and consolidation and Nifty @ 18567 & Banknifty @ 43314 could act as important support level, below these indices could witness further downside.

Market View: There are very little cues from global as well domestic market as indices continue to trade in narrow range, Mid-cap & Small-cap corrected after 12 weeks of gain and we think further correction in Mid-cap & Small-cap likely. 

SGX Nifty @ 18718 up 3 points at 8:25 AM

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Research Report

Global Market – BOE hike rate by 50-bps & Powell’s testimony

Global Market – BOE hike rate by 50-bps & US Fed Chair Jerome Powell testimony

This week we will discuss, BOE surprises street by raising interest rate by 50-bps to 5.00% and US Fed chair Jerome Powell in a testimony over 2-days to US Congress indicated further rate hike by 1 or 2 before end of 2023.

BOE raises rates by 50-bps to 5.00% – highest level since 2008.

The nine-member Monetary Policy Committee voted 7-2 for an increase to 5%, the highest level in 15 years and the biggest move since February.

Markets had priced in only a 40% chance of a half-point hike, with most economists anticipating a quarter point.

US Fed chair Jerome Powell – may need one or two more rate hike in 2023

Policymakers feel “it will be appropriate to raise rates again this year, and perhaps twice,” if the economy performs about as expected, even as they’ve been hiked to an appropriately restrictive level, Powell told the Senate Banking Committee Thursday.

Fed officials held rates steady last week after 10 straight increases, giving themselves more time to evaluate how the economy is responding to recent banking stress and higher borrowing costs.  The move left the Fed’s benchmark rate steady in a range of 5% to 5.25%.

Equichain Wealth Advisors: Market View & Opinion

Barring BOE decision which hike rate by 50-bps, decision by all other major banks were in-line with market estimate.  Last week US Fed “PAUSE” on rake hike, ECB raise rates by 25-bps & BOJ maintain its negative interest rate policy and guidance on JGB remains at -0.50% to 0.50%.

We believe further rate hike could impact global economy, which could be pushed in recession for short period of time and globally central banks are prepared to take pain in near term for long term objective to keep inflation at 2%.