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Global Market – Key event for 8 to 12 Jan 2024

Global Market – Key events this week – 8th to 12th January 2024

This week we will cover various events this week and but these events does not have any major impact
on global cues.  China continues to their longest streak of deflation since 2009, threatening a deflationary spiral that may require more government support to reverse.

Brent Oil Hits $80 After Airstrikes Target Yemen’s Houthis

President Joe Biden said strikes had been conducted against a number of targets used by the Iran-backed group, with US officials saying radar sites and missile launchers were hit. A tanker industry group said military forces in the region were advising ships to avoid a key chokepoint near Yemen.

China’s Worst Deflation Streak in 14 Years Puts Pressure on PBOC

China’s consumer prices marked their longest streak of declines since 2009, threatening a deflationary spiral that may require more government support to reverse. Its export growth engine is also faltering.

Bitcoin ETF Trades Top $4.6 Billion in ‘Ground-Breaking’ Day

Over $4.6 billion worth of shares traded between the almost a dozen US spot Bitcoin exchange-traded funds on Thursday. The Grayscale Bitcoin Trust, which converted into an ETF, saw about $2.3 billion in volume, according to data compiled by Bloomberg. Meantime, BlackRock’s iShares Bitcoin Trust—IBIT— saw over $1 billion change hands.

U.S. Mortgage Rates Climb for Second Straight Week, Hitting 6.66%

Borrowing costs have risen slightly as traders grapple with questions around the Federal Reserve’s future path. US inflation accelerated in December, tempering expectations about possible rate cuts from the central bank.

Iran Captures Oil Tanker Off Oman in Deepening Mideast Turmoil

A tanker previously seized by the US for carrying illicit Iranian oil was captured by Tehran off the coast of Oman, heightening tensions in the world’s most important trade lane for global crude supply.

Equichain Wealth Advisors: Market View & Opinion

Market news and events this week does not have any major impact on equity while crude oil has seen spike on Friday as Brent crude oil approaches $80.  China’s is facing deflation and China’s CPI continues to mark longest streak of deflation since 2009.  Rising geo-political tension in Red-sea remain uncertainty in global market.

With recent development and geo-political event unfolding we will remain watchful and these events could trigger risk-off sentiment and provide much needed correction in global market.   Global market continues to trade near its recent high and remain venerable to any potential negative triggers.

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Global Market – Key events this week 8 to 12 Jan 2024.pdf
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Research Report

Global Market – In focus – U.S. Economic & Geo-political tension

Global Market – In focus – U.S. Economic data & Geo-political tension

This week will on U.S. economic data and geopolitical tension as corporate earnings will start from next week.  So next week we will review corporate earnings of global companies and its impact on global as well as Indian market.

Now let us focus on the data released this week.  Most of the jobs data indicate strong economy, JOLTS Jobs opening came in-line with estimate while average hourly earnings were up by 0.40% Vs estimate of 0.30%.  Non-farm employment change came at 216k Vs estimate of 168k.

Market trend remains unclear as rally seen in December 2023 was on narrative of interest rate could starting declining earlier then estimate.  Strong economic data would mean the rate could stay at higher level for some more time.  US FOMC meeting minutes released this week also failed to provide clear trend and incoming data would be important to watch out for.

Geo-political tension – Red Sea Crisis

Freight costs, including surcharges, have increased by over 500% amid the Red Sea crisis as shipping companies were forced to take the longer route via Cape of Good Hope, according to the Federation of Indian Export Organizations.

Equichain Wealth Advisors: Market View & Opinion

US Market in December 2023 rallied from 3.81% to 4.94% on major indices will now need positive trigger from corporate earnings.

We would focus on corporate earnings where major US Banks are due to announce their earnings next week.  As we have seen economic data is U.S. continues to be strong will result in positive surprise in corporate earnings.

 
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Global Market – In focus – U.S. Economic data & Geo-political tension.pdf
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Research Report

Global Market – Rewind 2023 – Part 1

Global Market – Review of 2023

Today we will focus on few important events and article covered in 2023.  We will start with our first article for 2023, we focus on gold which was seen in a win-win situation at start of 2023.  We will cover key global events in last 12 months of 2023

January 2023

• China re-opens its economic from 8-Jan-23 after strict COVID restriction for past 3-years.  EURO zone inflation back to single digit @ 9.2%.
• Gold @ $1867 in January 2023 in a win-win situation?  After 2023, we can say Gold as asset class which has seen positive result for 2023 till date.

February 2023

• US Fed hikes rate by 25-bps to 4.50% to 4.75% on 1-Feb-23 and guided for more rate hike in 2023.
• Bank Of England raises rates by 50-bps to 4.00%, this brings interest rate by BOE to highest level since 2008.
• Russia plans to cut oil output by 500,000 bpd from March 2023.  German yield @ 2.34% highest level seen since 2008.

March 2023

• Silicon Valley Bank: first of few banks to fall his year, regulator shuts down SVB financial group and appoint FDIC.
• US regional bank (FRC) First Republic Bank – Big U.S. banks bail-out by depositing $30 billion.
• ECB hikes rate by 50-bps to 3.50%, highest interest rate since October 2008 and refrain from giving future guidance on interest rate.

April 2023

• OPEC+ nations announce surprise production cut from 1-May-23.  Production cut announced by OPEC + nations starting from 1-May-23 till end of the year is at 1.6 million barrels per day.  
• Corporate earnings for IT major in US help to improve sentiment.  META was up by 13.93% in April 2023 – reacting to its result.
• MICROSOFT & ALPHABET – manage to beat market estimate and improve market sentiment.

May 2023

• US Fed raises rates by 25-bps in meeting held on 3-May-23.  Policy statement soften the rate guidance indicating likely pause after May 2023 meeting outcome.
• US Fed on debt ceiling limit: no one should assume the fed can protect the economy from a failure to pay bills on time, economic consequences ‘highly uncertain’ if no debt deal.

Equichain Wealth Advisors: Market View & Opinion

In today’s article we have covered key events and central banks policy change, where we have seen many flip-flops and now when we look back at the events and how we have seen market then and now when global market is trading at life-time high, we might feel at the missed opportunity.

In next week, last article for 2023 – we will cover from June 2023 to December 2023 and we expect global indices to close 2023 at highest level.

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Global Market – Rewind 2023 – Part 1.pdf
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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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4-Jul-23 Daily-Report.pdf
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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 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 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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26-Jun-23 Daily-Report.pdf
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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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24-Jun-23 Fundamental & Technical Insight.pdf
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