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Weekly Reports

24-Jun-23 Technical & Fundamental Insight

Last week – review

Going into trade this week, trend remain mix as indices was trading near its recent highs, BSE Sensex made fresh and manage to cross December 2022 high while Nifty is yet to make fresh lift-time high.  Market witness profit booking and selling pressure from higher level, Mid-cap & Small-cap were looser on weekly basis after 12 weeks of continuous gains.

Technical Insight

 Nifty RSI @ 54.84 & RSI average @ 62.25, Nifty RSI indicating negative trend in near term with 18567 as first support level & 18374 as intermediate support level.  

• Banknifty RSI @ 47.92 & RSI average @ 51.38.  Banknifty is trading below its 20-DMA @ 43956 which is now acting as resistance level.

Approach on Technical: Indices are currently trading near upper-end of the range and facing supply ahead of F&O expiry next week for June 2023 series.  

Nifty below 18567 & Banknifty below 43314 could open further downside which could test lower level on Nifty @ 18131 & Banknifty @ 42493.  This week could turn out to be broader correction, while uptrend would resume in case of Nifty manages to move above 18807 & Banknifty above 44046.

Fundamental Insight

1) RBI Nowcasting Model Pegs Q1 FY24 GDP Growth At 7.9%
2) MPC Minutes: Job to Contain Inflation Only Half-Done, Says RBI Governor
3) EPFO Adds 17.20 Lakh Net Members In April: Labour Ministry

Equichain Wealth: Market View & Strategy

We believe it’s time to book profit and reduce exposure, with Q1FY24 result season to begin from 2nd week of July, market will focus on final F&O expiry and global cues.  We have reduced our exposure around 75%, but will continue to maintain allocation around 70% on lower side and 85% on higher side.  

Going into final F&O expiry for June series, we expect market to correct / consolidate at lower level which could provide fresh entry opportunity.

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Daily Reports

Daily Report 23Jun-23

Wall Street closed flat to positive as US Fed chair Jerome Powell wraps testimony, NASDAQ gain by 0.95% indicate interest rate could be near its peak.

Bank Of England – BOE raises rates by 50-bps to 5.00%, rate increase above estimate, saying it needed to act against “significant” indictor that British inflation would take longer to fall.

Accenture result: revenue up 3% and operating income by 9% to 2.36 billion or 14.2% or revenue.  Lower its guidance for FY23, fiscal year ending on 31-Aug.

F&O data: FII were net buyers in Index futures by 3188 contracts, net long: short position remains at 53.47%:46.53%.

Approach on Indices: Indices continue to remain in consolidation zone, but still is uptrend till Nifty @ 18567 & Banknifty @ 43314 holds on, Indices remain in narrow range and could wait for clarity.

Market View: Going into trade on Friday, cues for IT stocks are weak on back of lower of guidance by ACCENTURE.  Crude oil was down by 4% overnight as BOE raises rates by 50-bps.  Market cues remain weak and perfectly set for major correction, any correction for current level would be healthy.

SGX Nifty @ 18809.50 down 21.50 points at 8:25 AM

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Daily Reports

Daily Report 19-Jun-23

Wall Street witness some profit booking as trading near its recent high as all major central banks policy is out.  US Fed chair Jerome Powell testimony this week will be key event.

Defense stocks will be in focus as PM Modi’s visit to U.S. – there is already HAL & G.E. deal which is announced, details of the deal will provide further clarity.

F&O Data: FII are net long in Index futures by 18385 contracts, long: short exposure now stands at 55.13%:44.87%.

VIX @ 10.84: trading near lower end of the range.  

Approach on Indices: SGX Nifty indicate flat opening, Nifty likely to test new life time high and see some profit booking.   Banknifty above 44360 could test new high.  Indices likely to trade in narrow range.

SGX Nifty @ 18909 up 11 points at 9:00 AM

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Research Report

Global Market – It’s “PAUSE” or “Indicative PIVOT”

Global Market – It’s a “Pause” or “Indicative Pivot”

This week we will discuss all three central bank’s meeting outcome and its impact on global sentiment and interest rate policy.  Our focus will be that whether it will be “Pause” or “Indicative pivot”.  US Fed & ECB meeting outcome was in-line with estimate and BOJ outlook and guidance was positive as they maintain JGB yield curve at -0.50% to 0.50%.

US Fed meeting outcome on 14-Jun-23

• US Fed kept interest rate unchanged after 15-months of rate-hike cycle.
• Current interest in US at 5.25% is same rate as seen in 2007, back in 2006 – 07 – interest rate remains at 5.25% for 14 months before interest rate heads downward.

U.S. Fed chair Jerome Powell had signaled that they would prefer to skip rate hike at June meeting, while still leaving room for a hike in coming months, if needed. 

ECB meeting outcome on 15-Jun-23

• ECB hikes rate by 25-bps to 4.00%.  Deposit rate now stands at 3.50%, highest level in more than 2-decades.
• ECB guides for continuation of rate hike to bring long term inflation at 2% and to keep interest rate higher as long as necessary.

BOJ meeting outcome on 16-Jun-23

• BOJ kept interest rate by -0.10%, maintain interest rate at ultra-low level.
• BOJ signaled JGB yield curve between -0.50% to 0.50%.
• BOJ maintain its current pace of quantitative easing, and said that it will continue to purchase exchange-traded funds and Japanese real estate investment trust.

The BOJ’s move on Friday comes largely in line with market expectations, as analysts saw little scope for immediate change in the bank’s dovish stance under new Governor Kazuo Ueda.

Equichain Wealth Advisors: Market View & Opinion

While BOJ maintains its ultra-low interest rate and QE policy.  If we compare all these policies, we see significant contradiction as all these central banks are key liquidity provide for global financial market.

Our base case assumption does suggest that – we could consider this as early sign of “PIVOT” as higher interest rate will show its impact sooner rather than later.

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Weekly Reports

17-Jun-23 Technical & Fundamental Insight

Last week – review

We went into trade in this week expecting momentum build-up as there was US Fed, ECB & BOJ central bank’s meeting.  After RBI’s meeting last week, indices failed to gained momentum as supply seen from higher level.  Mid-cap & Small-cap continues its upward momentum as defense stocks rallies. 

Technical Insight

• Nifty RSI @ 67.18 & RSI average @ 64.90.  Nifty after consolidation this week continues its upward momentum with highest closing at 18826.
• Banknifty RSI @ 53.53 & RSI average @ 54.94.  Banknifty is currently underperforming Nifty.  Last week RBI meeting & this week, US Fed, ECB & BOJ continues to weight on Banknifty.

Going into trade this week, Nifty support level @ 18503 & Banknifty support level at 43552 will re critical.  Indices continue to indicate mix view with upside target on Nifty @ 18965 & Banknifty @ 44959.  As we have seen in last 2 weeks, indices remain in narrow range, we could again see this week indices trade in narrow range, we would be watching VIX closely for any change in view on increase in volatility.


Fundamental Insight

1) India’s Trade Deficit Widens To $22.1 Billion In May
2) Government Lines Up Two Tranches Of Sovereign Gold Bonds In First Half Of FY24
3) Housing Prices Rise in Top Indian Cities, Delhi Sees Highest Spike

Equichain Wealth: Market View & Strategy

Major events such as RBI MPC meeting in previous week, US Fed, ECB & BOJ meeting outcome concluded in week just concluded, outcome was mostly in-line with market expectation.  Globally market is trading near their respective high, marking 2023 with positive return after flat or negative 2022.  

Our strategy this week to remain invested around 80% – 85% and any rally to be used to reduce exposure and fresh deployment of fund to be done on major correction.  Meanwhile if market continue to trade in range, stock rotation with limit of 85% could be preferred.

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Daily Report 16-Jun-23

Wall Street rallied over 1% on all major indices as market bets that interest rate in U.S. interest rate is near its peak, S&P500 & NASDAQ closed at 14-months high.

ECB raises rates by 25-bps to 4.00%, highest interest rate in 22 years and signal more hike to come, ECB maintain long term inflation target at 2%, which is currently far away from 6.1% latest inflation figures.

Bank of Japan kept rate unchanged at -0.10%, maintain yield for JGB at -0.50% to 0.50%.

VIX @ 11.08: continues to trade near lower end of the range.

Approach on indices: Indices likely to bounce after correction / profit booking seen post US Fed meeting outcome.  Indices do indicate sharp probability of bounce back.  Nifty continue to trade above important support level where as Banknifty underperform and closed below 43552.

SGX Nifty @ 18802.50 up 42.50 points at 8:55 AM

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Daily Reports

Daily Report 14-Jun-23

Wall Street had another positive session after CPI came @ 4.0% Vs estimate of 4.1%.  U.S. Core CPI rises to 5.3% in May lowest since November 2021.

US Fed meeting tonight is now factoring in 95% probability of pause after CPI & Core CPI data came in-line with estimate.  US Fed chair Jerome Powell post policy press conference will be key event.

FMCG & defensives stocks continue to lead the Indices higher as Banks & IT stocks see some profit booking.  Mid-cap & Small-cap stocks continue to outperform.

VIX @ 11.11: surprisingly low, any increase in VIX needs to watch-out.

Approach on Indices: With Nifty is less than 170 points away from lifetime high at 18887, expected to test.  Banknifty likely to test 44965 as Banknifty likely to react to US Fed news.  Indices remain in uptrend till Nifty is above 18458 & Banknifty above 43552.  

Market View: We are going into event with indices near all time high, even if indices move higher, we would continue to reduce exposure on higher level.  In near term – even if US Fed decision comes favourable in-line with market expectation – we expect profit booking.

SGX Nifty @ 18830.50 up 45.50 points at 8:35 AM

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Daily Report 13-Jun-23

India’s CPI for May came at 4.25% as compared to 4.7% in April and against estimate of 4.31%.  IIP data for April 2023 came at 4.2% as compared to revise growth of 1.7% in March 2023.

Wall Street closes strong, S&P 500 and Nasdaq close at highest since April 2022.  Oracle hit record high ahead of quarterly results as investor awaits inflation data & US Fed interest rate decision.

US CPI & Core CPI inflation data due today ahead of US Fed meeting outcome tomorrow.  Wall Street going into event with positive trend as market trade near April 2022 highs.

F&O data: FII covered short & net addition in long position by 10481 contracts, FII long: short position stands at 49.29%:50.71%.  Nifty PCR @ 0.92 Vs 0.84 previous.

Approach on Indices: SGX Nifty indicate around 40 – 50 points higher on positive global cues & lower CPI inflation data.  Nifty could test around 18700 & Banknifty around 44360 before an important US CPI & Core CPI data.  Indices remain in uptrend till Nifty @ 18458 & Banknifty @ 43552 holds and set to make fresh new high.

SGX Nifty @ 18751 up 52.50 points at 8:10 AM

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Daily Reprot 12-Jun-23

Wall Street had another muted session as all eyes are now set of 3 major central banks meeting this week.  US Fed meeting outcome on 14-Jun-23 & BOJ meeting outcome on 16-Jun-23 are key event.

Defense stocks continue to remain in focus as multiple positive triggers helping this sectors, HDFC Defense NFO concluded on 30-May-23 – fund would be deployed.

LT, BHARATFORG & private companies which are involved in defense sector is expected to do well after sharp rally in defense PSU’s.

VIX @ 11.12: continue to trade near lower end of the range.

Approach on Indices: Technical set up has turned neutral after a failed attempt to gain momentum after breakout from Nifty @ 18619 & Banknifty above 44360.  SGX Nifty indicate gap-up opening around 60 – 70 points, first hour trade would be important after gap-up opening.  

Market View: Mid-cap & Small-cap have rallied and outperformed Nifty 50 & Sensex and index heavy weights.  Mid-cap & Small-cap stocks are expected to witness some profit booking or consolidation in next few weeks, look for opportunity to book part profit.

SGX Nifty @ 18671.50 up 61.50 points at 8:25 AM.

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Weekly Reports

10-Jun-23 Technical & Fundalmental Insight

Last week – review

Indices remain flat for this week after less volatile session in narrow range, we expected indices to given clear directional move, but failed.  RBI MPC kept repo rate unchanged at 6.50% and maintain its stance as “Withdrawal of Accommodation”.  Reaction to monitory policy & post policy press conference was weak and Banknifty corrected on Thursday.

Technical Insight

• Nifty RSI @ 59.85 & RSI average @ 64.65.  RSI after testing 70 level this week again turned negative, Nifty immediate support at 18508 & 18458 would be important resistance comes at 18777.

• Banknifty RSI @ 56.23 & RSI average @ 59.65.  Banknifty trade in very narrow range in this week where RBI MPC event was there.

Approach on Technical: Indices failed to build on momentum could be considered as negative in near term.  RSI & RSI average on Nifty & Banknifty indicates further consolidation.

Nifty below 18458 & Banknifty below 43552 – needs to be turn cautious.  Indices continue to trade near its lifetime high, could expect another round of up move if supported by momentum.  Nifty above 18666 & Banknifty above 44360 could open upside up to Nifty @ 18965 & Banknifty @ 44959.

Fundamental Insight

1) RBI MPC Keeps Repo Rate Unchanged; Inflation Still Above Target, Says Das
2) RBI Monetary Policy: Banking System Liquidity Appears To Be Skewed, Says RBI Governor
3) Southwest Monsoon Arrives In Kerala: IMD
4) World Bank Trims India’s GDP Growth Forecast To 6.3% In FY24
5) India Likely To Stick To The Market Borrowing Plan For FY24

Equichain Wealth Advisors – Market View & Strategy

Last weeks narrow movement has turned as cautious again, however we continue to remain positive on market going into US Fed meeting on 14-Jun-23, ECB meeting on 15-Jun-23 & BOJ meeting on 16-Jun-23.  

Our strategy this week is to wait for better clarity as we expect increase in volatility ahead of event and on reaction to event.  US Fed is expected to pause, post meeting press conference will be key.

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10-Jun-23 Fundamental & Technical Insight.pdf
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