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Weekly Reports

2-Mar-24 Technical & Fundamental Insight

Last week – review

Indices closed mixed this week as Nifty 50, SENSEX & Banknifty ended with around 1% gain, while Mid-cap 100 & Small-cap 100 closed with loss of around 1%.  GDP data released on Thursday after market hours provided much needed rally from lows of the week to record high on major indices.  Mid-cap & Small-cap underperformed this week as SEBI asked for further disclosure and regulation from Mutual fund.

Technical Insight

• Nifty could see fresh upside above 22446.  Nifty range for this week could be 22297 to 22796.  Nifty above 22297 is seen as fresh break-out.

• Banknifty move on Friday can be seen as big positive and now immediate support @ 47052 and trend remains positive till it holds 47052.

Approach on Technical: Friday’s move after strong GDP data on Thursday after market closing has change direction in short term.  Last Wednesday & Thursday market remain under pressure.

Nifty @ 22096 & Banknifty @ 46562 to act as important and decisive support level.  Technical chart has turned positive and could test higher level.  Nifty is expected to test 22446 & 22796.  Banknifty likely to test 47748 & 48636.  We see Friday’s move as big trigger as Nifty 50 index made fresh high and could open further upside.  

Fundamental Insight

1) India’s GDP Grows 8.4% In Q3 Surpassing Estimates; Full-Year Growth Pegged At 7.6%

The gross domestic product grew 8.4% over a year earlier in the October-December quarter, according to the latest estimates released by the government’s statistical agency. Gross value added, which strips out indirect tax and subsidies, is estimated to have grown 6.5%.

2) Fiscal Deficit Widens To 64% Of Revised Estimates till January
3) India’s GST Collection Rises 12.5% To Rs 1.68 Lakh Crore in February
4) Cabinet Nod for Three Semiconductor Units Entailing Rs 1.26 Lakh Crore Investment

Equichain Wealth Advisors: Market View & Strategy

Nifty closed at fresh 52-week high lead by broad base rally from banking to infrastructure sector.  GST Collection for February came at 1.68 lakh crores, records 12.5% growth compared to previous year while decline compared to previous month’s collection of 1.74 lakh cores.

We see recent development as fresh positive triggers and we may find opportunity to deploy fund available.  In last few weeks, we have been underweighted as we were expecting correction, but market witness sideways correction / consolidation and Friday ‘s rally changed the sentiment.  Q3FY24 GDP number just ahead of election could limit the downside.  Any correction could be seen by market as buying opportunity as strong domestic inflows is now backed by strong economic data

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2-Mar-24 Fundamental & Technical Insight.pdf
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24-Feb-24 Technical & Fundamental Insight

Last week – review

Last week market movement were more related to volatility seen during this week but indices continue to trade in narrow range.  Nifty 50 & SENSEX closed at fresh all-time high was market sentiment remain cautious.

Technical Insight

• Nifty this week range seen at 21956 & 22446 with positive trend.  Nifty around 21938 level likely to act as important support level on trend line from October 2023.
• Banknifty this week range seen at 46073 to 47748.  Banknifty @ 46073 to act as important support level and fresh up move can be seen above 47052.

Approach on Technical: Going into trade this week, Nifty remain strong as compared to Banknifty.  This week’s trade will be dominated by final F&O expiry for February 2024 series.

Technical setup remains bullish till Nifty @ 21957 & Banknifty @ 46073 holds.  We expect indices to test higher target on Nifty @ 22448 & Banknifty @ 47748 & higher.

Fundamental Insight

1) Policy Pivot Unlikely Until Inflation Is Under Control, Show MPC Minutes
2) Citi Research: Nifty Expected to See 14% Earnings Growth for Couple of Years
3) RBI Allows Banks, Non-Banks to Issue Public Transport Payment Instruments

Equichain Wealth Advisors: Market View & Strategy

Even though market is trading near its fresh life time, market sentiment remains cautious.  High volatility was seen this week cues from domestic & global market remains stable and positive while valuation seems to be stretched.

We continue to maintain our stance to keep allocation level around 65% to 70% while remain bullish with medium to long term view.  We remain cautious with short term view and keeping our strategy to make fresh allocation only on decline.  Technical setup looks bullish going into F&O expiry this week for February 2024 series.  However, we continue to play cautious and expecting high volatility in final F&O expiry week.

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24-Feb-24 Fundamental & Technical Insight.pdf
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Research Report

Global Market – Key events 5 to 9 Feb 2024

Global Market – Key events for 5th to 9th February 2024

This week we will focus on China’s economy, how Powell ‘s interview to “60 Minutes” and also discuss BOJ shift in policy change from negative interest rate.  This week has been relatively quite and focus has been on corporate earnings.

China’s Consumer Prices Drop at Fastest Pace Since 2009

China’s consumer prices fell last month at the fastest pace since the global financial crisis as the world’s second-largest economy struggles to shake off persistent deflation pressures.

Germany’s Industrial Downturn Stretches into A Seventh Month

German industrial output extended its slump to a seventh month in December, underlining the struggles gripping Europe’s largest economy.

China Tightens Some Trading Restrictions for Domestic and Offshore Investors

China is tightening trading restrictions on domestic institutional investors as well as some offshore units as authorities fight to stem a deepening stock rout, according to people familiar with the matter.

Powell Tells ‘60 Minutes’ Fed Is Wary of Cutting Rates Too Soon

Federal Reserve Chair Jerome Powell said Americans may have to wait beyond March for the central bank to cut interest rates as officials look for more economic data to confirm that inflation is headed down to 2%.

Trillions Of Yen Pile Up at Negative Rates in Bets on BOJ Shift

Japan’s biggest commercial banks are letting money accumulate in negative interest-rate accounts at the central bank — another sign that the world’s last sub-zero rate policy is coming close to the end.

Equichain Wealth Advisors: Market View & Opinion

In last few weeks in our coverage of global market, we have been focusing mainly on three countries and their central banks.  U.S., Japan & China.

We would like to highlight that market is optimistic and currently trading near its high as interest rate going down in US could be positive for risk-on sentiment, China’s effort to boost economy is also positive but the real concern in BOJ moving away from negative interest rate policy.

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Global Market – Key events this week 5 to 9 Feb 2024.pdf
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Global Market – Key events for 22 to 26 January 2024

Global Market – Key events for 22 to 26 January 2024

This week, we will focus on US Q4 2023 GDP data, ECB interest rate decision & China’s steps to boost economic recovery.  Central banks meeting starts with BOJ & ECB meeting this week.  We would like to focus on stocks whether news this week would have any impact global trend.

BOJ Keeps Negative Rate for Now as It Prepares Ground for Hike

The BOJ maintained its -0.1% short-term rate and kept yield curve control parameters intact at the end of a two-day meeting, according to its statement Tuesday. 

Red Sea Turmoil Sends Economic Shockwaves Far and Wide

Two months of missile, drone and hijacking attacks against civilian ships in the Red Sea have caused the biggest diversion of international trade in decades, pushing up costs for shippers as far away as Asia and North America.

China To Cut Bank Reserve Ratio in Bid to Boost Growth, Markets

The 0.5 percentage-point cut to the ratio, or the amount of cash that banks have to keep in reserve, on February 5 will provide 1 trillion yuan ($139 billion) in long-term liquidity to the market, Pan said during a briefing with the press Wednesday.

Fed Raises Rate on Emergency Loan Program to Stop Arbitrage

The Federal Reserve raised the rate on loans to banks issued under an emergency lending program launched last year, after borrowing surged in recent weeks as institutions took advantage of the attractive financing terms.

ECB To Hold Interest Rates as Lagarde Beats Back Cut Bets

The European Central Bank is set to keep borrowing costs on hold for a third meeting while stepping up efforts to convince investors that interest-rate cuts aren’t imminent.

US GDP Grew 3.3% Last Quarter, Capping Unexpectedly Strong Year

Gross domestic product increased at a 3.3% annualized rate, according to the government’s preliminary estimate out Thursday. For all of 2023, the economy expanded 2.5%.

Equichain Wealth Advisors: Market View & Opinion

Bank of Japan is now preparing to hike interest rate, China is providing support for economic recovery, ECB guides for rate cut & while US last quarter GDP growth came above estimate ahead of US Fed meeting on 31-Jan-24.  We seen extreme mix picture of global economy which makes us cautious as year end rally seen in December 2023 could see trend reversal post US Fed meeting outcome.

Earnings season so far has remain mix and fail to provide fresh triggers for market.  We are currently focusing to reduce exposure at higher level and wait for better entry opportunity on correction.  Next big trigger could come when interest rate in US & Europe comes down and we see some economic slowdown before we see interest rate heading downward.

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Global Market – Key events this week 22 to 26 Jan 2024.pdf
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Global Market – Key events this week – 14 to 19 January 2024

Global Market – Key events this week – 14th to 19th January 2024

This week we will cover we will cover how China’s stock sell-off and oil squeeze at start of 2023 is seen at surplus.  Red sea crisis event could impact food supply and impact inflation.  U.S. economic data released this week came above market estimate as jobless claim declined.  How key risk indicator reacted this week.

China’s $6.3 Trillion Stock Selloff Is Getting Uglier by The Day

Chinese stocks just capped another dismal week, with a gauge of mainland firms listed in Hong Kong languishing at the bottom of global equity index rankings for the year so far.

Oil Squeeze Of 2023 Turns to Surplus In Warning For Market Bulls

A year ago, crude traders and forecasters anticipated that the fourth quarter would be the strongest point of 2023, with China’s post-pandemic demand recovery pushing prices up to $100 a barrel. More recently, the Organization of Petroleum Exporting Countries has been predicting a record deficit of 3 million barrels a day.

Red Sea Unrest Is Bad News for The World’s Fragile Food Supply

Chaos in the Red Sea is starting to disrupt shipments of produce from coffee to fruit — and threatening to halt a slowdown in food inflation that brought some relief to strained consumers.

U.S. Jobless Claims Plunge To 187,000, Lowest Since September 2022

Initial claims decreased by 16,000 to 187,000 in the week ending Jan. 13, according to Labor Department data released on Thursday. The figure was below all estimates in a Bloomberg survey of economists.

ECB To Pick Right Moment for First Rate Cut, Economists Say

Almost three-quarters of respondents in a Bloomberg survey are confident policymakers will neither wait too long nor act too early — after they were widely accused of tardiness in responding to the continent’s once-in-a-generation price shock.

US 10-year bond yield @ 4.16% & Dollar Index @ 103.10

Key risk indicator in last week has seen risk-off sentiment as US 10-year bond yield rises from 3.94% a week earlier to 4.16% this week, rise of more than 20-bps.  Dollar Index is currently trading above 103 level was trading around 102 level.

Equichain Wealth Advisors: Market View & Opinion

Global cues were positive till last week on December 2023 on optimism of interest to cool-off sooner than expected but global cues in first three weeks of January 2024 does not provide any support to this trend.

We see next two week will be important and as BOJ meeting outcome on 23-Jan-24, ECB meeting outcome on 25-Jan-24, US Fed meeting outcome on 31-Jan-24 & BOE meeting outcome on 1-Feb-24.  Commentary of all these central banks could provide further cues.

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Global Market – Key events this week 14 to 19 Jan 2024.pdf
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21-Jan-24 Technical & Fundamental Insight

Last week – review

Nifty started this week’s trade with a bang as Nifty manage to cross 22100 level and close at 22097 on Monday.  Market seen major fall on Wednesday as reaction to HDFCBANK which disappointed market as HDFCBANK ADR was down by more than 15% in two trading session.  HDFCBANK seen cut of more than Rs 200 or 12% from 1679 closing ahead of result on 16-Jan-24.  

Technical Insight

• Nifty key support and resistance level this week could be 21411 to 21680.  Break-out on either direction to provide fresh move in a holiday shorten week.
• Banknifty expected to trade in range of 45295 to 46571.  Decisive move can be expected once this level is crossed on either side

Approach on Technical: Indices will be reacting to ICICIBANK ‘s result on Tuesday & holiday shorten week.  Banknifty monthly expiry on 24-Jan-24 & Nifty and stocks final F&O expiry on 25-Jan-24.

Indices after last week has seen sharp correction on back of HDFCBANK ‘s result on 16-Jan-24.  Nifty @ 21411 & Banknifty @ 45295 to act as important support level and indices to remain in uptrend till these levels are hold.  

Fundamental Insight

1) RBI Not Discussing Rate Cuts Yet, Governor Das Says
2) Retail Inflation For Farm Workers Rises To 7.71% In Dec
3) EPFO Adds 13.95 Lakh Net Members During November 2023
4) India’s Fiscal Deficit To Be Budgeted At 5.3% Of GDP In FY25: BofA Securities

Equichain Wealth Advisors: Market View & Strategy

F&O expiry for January series due this week in a holiday shorten week, Indian market will be trading for only 3 days this week as Friday will be holiday for Republic Day and soon after that focus will shift to Vote-On-Account, Mini-budget on 1-Feb-24.  ICICIBANK result is in-line with market estimate with NIM at 4.43% Vs 4.53% in previous quarter.  ICICBANK result is better than street estimate and no major concern seen as compared to HDFCBANK.

We remain cautious optimistic as we see many stocks are fairly valued and focus will clearly shift to budget due on 1-Feb-24.  Market will react positively to successful PRAN PARTHISTHA ceremony of RAM MANDIR as focus will now shift to budget and election.  

We would also be focusing on booking part profit and shifting to stocks which are valued attractively.   We remain open to review our allocation strategy based on incoming data and we do not rule out profit booking post budget on 1-Feb-24.

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21-Jan-24 Fundamental & Technical Insight.pdf
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13-Jan-24 Technical & Fundamental Insight

Last week – review

Going into trade last week, we expected Nifty range 21506 – 21834 & Banknifty range 47575 – 48636, Nifty tested both end of the range while Banknifty manage to hold lower end of the range.  Banknifty was showing weakness on chart and it has underperformed.  IT result was key highlight for this week as INFY narrowed guidance to 1.5% – 2% indicating worst may be behind as TCS report operating margin at 25%.  

Technical Insight

• Nifty range for this week could be seen as 21631 to 22306.  Nifty move above 21834 has opened further to 22306 level.
• Banknifty range for this week could be seen as 47575 – 48636.  Banknifty range for this week remains same as last week.

Approach on Technical: IT result provided trigger to Nifty this week and Banknifty could take cues from HDFCBANK result due on 16-Jan-24.  Banknifty to take move on either direction.

We will turn cautious or bearish if Banknifty breaks 47575 and fresh upside momentum can be seen on Banknifty above 47980 to 48636 level.  Banknifty could led the positive momentum as chart indicates positive from consolidation. 

Fundamental Insight

1) India’s CPI Inflation Rises to Four-Month High Of 5.69% In December
2) IIP: Growth In India’s Industrial Output Falls To Eight-Month Low At 2.4%
3) Parliament’s Budget Session Likely Between Jan. 31 And Feb. 9

Equichain Wealth Advisors: Market View & Strategy

HDFCBANK result could provide decisive direction to Banknifty and could led next round of rally.  IT stocks rallied this week helped Nifty cross its previous and closed at life time high.  HDFCBANK ‘s quarterly business updates were positive and no negative surprise could support to HDFCBANK stock prices which has seen correction in last two weeks after year end rally which on HDFCBANK which crossed 1700 level.  

We remain positive and would continue to maintain bullish stance unless we see negative cues dominating and market direction turns negative.   Our strategy would to remain long on Banks, Defense stocks and Infrastructure stocks going into Vote-on-account (mini-budget).

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13-Jan-24 Fundamental & Technical Insight.pdf
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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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6-Jan-24 Technical & Fundamental Insight

Last week – review

Going into trade in the first week of 2024, we expected to consolidate after year-end rally seen in last two weeks of December 2023.  Market had volatile session in range and ended the week flat on major indices.  Mid-cap 100 & Small-cap 100 stocks gained around 2% on major indices, rally continues in Mid-cap & Small-cap stocks.

Technical Insight

• Nifty range for next week could see break-out from this range of 21506 – 21834.  Nifty technical indicate positive momentum to accelerate once 21834 is crossed.
• Banknifty range of this week is expected from 47575 to 48636.  We remain positive on Banknifty and will review long position only if Banknifty goes below 47575.

Approach on Technical: last week was all about consolidation and we expect this week, market to take decisive direction.  Indices consolidated this week after two weeks of major rally.

Nifty is strong as compared to Banknifty on daily chart, Indices likely to maintain positive momentum as Nifty @ 21506 & Banknifty @ 47575 holds on closing basis.  

Fundamental Insights

1) India GDP: Advance Estimates Peg FY24 Growth At 7.3%, Nominal GDP Expansion At 8.9%
2) HDFC Bank Q3 Updates: Deposit Accretion Slows
3) India To Tighten Budget Deficit as Bond Index Inclusion Beckons

Equichain Wealth Advisors: Market View & Strategy

Global cues are muted as incoming U.S. economic data will play important role in providing fresh cues for interest rate which was key reason of rally in global market in December 2023.  U.S. CPI & Core CPI inflation data will due next will provide important direction as US 10-year bond yield back above 4.00%.

IT stocks – INFY & TCS to start earnings season on 11-Jan-24, we see IT stocks may have bottomed out and we go into result season with positive view on IT stocks.  HDFCBANK quarterly business failed to cheer the market but we see this number as positive as credit growth remains healthy.

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06-Jan-24 Fundamental & Technical Insight.pdf
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30-Dec-23 Technical & Fundamental Insight

Last week – review

Going into trade into last trading week, we expected market to test its recent high and close at higher level due to year end rally.  Most indices closed at highest level with week gains of around.  Indices on Monthly basis has rallied more than 7% on major indices while Mid-cap & Small-cap gained just under 7%.  

Global market closed flat on weekly basis as market was in holiday mood and low volatility.Now let us looks at year change for all these major indices.  Nifty 50 & SENSEX30 gained around 20% while Banknifty underperformed among indices by growth of up to 12.34%.  

Highlight will be Mid-cap 100 & Small-cap100 indices which gained by 46.57% and 55.62% respectively.  After underperforming in 2022 and early part of 2023, 2nd half of calendar year 2023 delivered one of the best returns in recent times.  

Equichain Wealth Advisors: Market View & Strategy  

This week we will not focus on technical because the movement we have seen in last two weeks was mainly due to year-end rally.  We would now focus on fresh indication from technical trend.

We see year-end rally to cool-off in first week and then corporate earnings will take lead from here on.  We remain optimistic on IT and Banking stocks going into earnings season as improvement in global sentiment will play important role, even if result may be weak but we expect positive commentary from IT companies.   Globally expectation of interest rate to cool-off has provided big boost for banking and financials company.  Any correction in first few weeks can be seen as opportunity to deploy fund available.

As mentioned in our earlier we have remained invested around 70% in trading portfolio and 80% in positional portfolio.  Rally in last week was used to book part profit for short term trades and fresh review will be taken with view on corporate earnings, Vote on account (mini budget before general election on 1-Feb-24) and potential reversal in interest rate globally.

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30-Dec-23 Fundamental & Technical Insight.pdf
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