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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 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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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 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 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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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.

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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

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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

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