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Weekly Reports

5-Aug-23 Technical & Fundamental Insight

Last week – review

We expected some correction / consolidation before market makes its next move, Nifty tested 19458 but was trading above 19160 & Banknifty tested 61.8% retracement level of 43541 to 46256 rally.  Indian market remain mix with Banknifty correct by 1.29% as high interest rate would be major concern.

Technical Insight

• Nifty continue to remain in correction / consolidation zone with 19160 to act as decisive support level this week & break-out above 19678 to act as fresh trigger.

• Banknifty took support at 61.8% retracement level of 43541 to 46256.  Banknifty close below 44578 could open further weakness & above 45219 Banknifty could expect another round of rally.

Approach on Technical: Technical trend continue remain mix and no clear direction in short term while medium term trend remains positive.

Nifty @ 19160 & Banknifty @ 44578 & 44138 to act as critical support level.  Indices would turn negative only if this support level are broken on closing basis and uptrend could resume once Nifty goes above 19674 & Banknifty above 45615.

Fundamental Insight

1) Forex Reserves Drop By $3 Billion To $603.87 Billion
2) India’s Unemployment Rate Falls in July Due to Farm Demand
3) Banks Spend More In Q1 As Employee Costs Continue To Mount

Equichain Wealth: Market View & Strategy

This week focus would shift to RBI MPC meeting outcome on 10-Aug-23.  Most private banks came out with Q1FY24 result in-line or better than street estimate but SBIN seen some increase in slippages to 7659 crores from 3185 crores, quarter ago.  RBI has kept rate unchanged in last two policy meeting and is expected to maintain status quo.  RBI Governor commentary and guidance on future action will provide fresh set of triggers.  Q1FY24 earnings season in last phase as PSU & defense PSU stocks will be in focus.

We would continue to focus on capital allocation strategy which is currently around 70% to 85% with allocation in defensive stocks around 15%.  Any major correction would provide us opportunity to deploy fund which is already available.  In case of sharp up move, we would prefer to keep exposure at same level and look for rotation of stocks within exposure limit.

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Daily Reports

Daily Report 1-Aug-23

Wall Street was marginally positive as oil stocks help market gain while health care stocks struggle, big tech stocks such as APPLE & AMAZON remain in focus ahead of its earnings later this week.

Domestic natural gas prices were raised from Aug. 1, 2023, to Aug. 30, 2023. Domestic natural gas prices were raised to $7.85/mmBtu from $7.48/mmBtu. The price of gas from ONGC and OIL nomination fields will have a ceiling of $6.50/mmBtu on a gross calorific value basis.

WTI Crude above $80 & Brent Crude above $85.  Metal price remain strong on hope of China’s stimulus package.

F&O data: FII continue to reduce long position in index futures, net short by 8147 contracts in index futures on Monday.  Net long position now stands at 51.46%.

Approach on Indices: Nifty likely to test 19835 & Banknifty likely to test 45835, indices above this level could open further upside and support remain on Nifty @ 19478 & Banknifty @ 45219.

GIFT NIFTY @ 19883 Vs 19844 Nifty future previous close.


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Daily Reports

Daily Report 21-Jul-23

Wall Street: TESLA & NETFLIX was down after result, NASDAQ & S&P500 ended down by 2.05% & 0.68% respectively.  DOW30 ended in green with 0.47% gains.

INFY Q1FY24 result in-line with estimate, revised revenue guidance downward to 1% – 3.5% from earlier 4% – 7%.  INFY ADR down by 8.5% overnight, expect to open with deep cuts.

RELIANCE will come out the result today.  LT result on 25-Jul-23 will consider Buy-back and special dividend and record date for same will be 2-Aug-23.

F&O data: FII added 11091 contracts in index futures, net long position for FII is now above 1 lakh contracts in index futures, net long position now stands at 70.68%.

Approach on Indices: GIFT Nifty indicate down opening due to INFY & other IT stocks could remain under pressure, Nifty @ 19697 & Banknifty @ 45110 could act as support level in case of any correction.  Banknifty will continue to outperform.

GIFT NIFTY @ 19880 Vs 19967 Nifty future previous close at 8:05 AM

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Daily Reports

Daily Report 20-Jul-23

Wall Street had muted session with minor gains as corporate earnings continues to boost sentiment, TESLA Q2 result beat margin despite price cut.  NETFLIX was down reacting to result.

RELIANCE & JIO Financials to trade at separate entity from 20-Jul-23.  Price discovery session from 9:00 AM to 10:00 AM.  Cost of acquisition for Reliance Ind @ 95.32% & RSIL @ 4.68%, values RSIL @ 132.98*

HINDUNILVR & INFY will announce Q1FY24 result today.  INFY expected to declare result after market hours, stock will react to its number tomorrow.

F&O data: FII were net seller in index futures by 3464 contracts, net long position remains above 70% currently at 70.20%:29.80%.  Nifty PCR @ 1.34 Vs 1.34 remains unchanged.  Banknifty PCR @ 1.12.

Approach on Indices: Indices continue to make fresh high now on daily basis and Nifty is in unchartered territory and heading towards 20000 historic level.  With weekly options expiry Nifty @ 19800 & Banknifty @ 45500 will be in focus.

GIFT NIFTY @ 19830 Vs 19847 Nifty future previous at 8:30 AM

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Daily Reports

Daily Report 19-Jul-23

Wall Street had another positive session as US indices closed at yet another closing high in recently times.  US Banks rally as result beat estimate, Microsoft hits record high after AI-Optimism.

LTIM corrected yesterday reacting to its result, LTTS may correct today as it announced result after-market hours yesterday.  INFY is set to announce it result on 20-Jul-23, rallied by 3.73% on deal win.

JIO Financial will get listed in a separate entity from 20-Jul-23 and will be included in Nifty 50 and other indices.  All outstanding F&O contract in RELIANCE will be closed today and physical settled.

F&O data: FII added net long 5590 contracts in index futures, net long position now stands at 71.18% and 96701 contracts.  Nifty PCR @ 1.34 Vs 1.54 previous.  Banknifty PCR @ 0.99 Vs 1.46 previous.

Approach on Indices: We expect further profit booking on indices, we are not comfortable with the pace of rally to add fresh long at current level.  Nifty @ 19622 & Banknifty @ 45110 are near term support level in our watch list.

GIFT NIFTY @ 19800 Vs 19771 Nifty future close at 8:30 AM

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Daily Reports

Daily Report 18-Jul-23

Wall Street had another positive as financials rally ahead of their earnings – Bank of America & Morgan Stanley are due to announce result on Tuesday & Goldman Sachs on Wednesday.

Reliance – JIO financial services demerger on 20-Jul-23.  JIO financial to be included in Nifty 50, BSE Sensex and other indices.  Pre-open price discovery session will be held between 9:00 to 10:00 AM.

HDFCBANK records 30% growth in PAT year on year, HDFC ADR was up 4.43%; Most brokerage house maintains over-weight on HDFCBNAK with target of 2010 – 2200.

F&O data: FII net long: short position at 70.25%:29.75%. Nifty PCR @ 1.54 Vs 1.34 previous.  Banknifty PCR @ 1.46 Vs 0.86 previous.  

Approach on Indices: PCR do indicate overbought zone, but expect another round of short covering.  Indices are trading in unchartered territory.  Nifty around 19800 & Banknifty around 46000 likely to be tested today.  

GIFT NIFTY @ 19769.50 Vs 19730 Nifty future previous close.

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Daily Reports

Daily Report 17-Jul-23

Wall Street had flat closing on Friday after rally seen earlier this week on back of declining inflation data.  U.S. market recorded weekly gain on major indices round 2% to 3%.

HDFCBANK to announce result today, 42 HDFCBANK shares will be allotted for every 25 HDFC shared held.  HDFCBANK could see some pressure.

LTIM & TATAELXSI are two IT companies are set to announce result today ahead of LTTS tomorrow and INFY on 20-Jul-23.  INFY rallied around Rs 90/- or 6% in last two trading days.

F&O data: FII long: short position continues to remain at 70.29%:29.73%, Nifty PCR @ 1.34 Vs 1.11 previous.  Banknifty PCR @ 0.86 Vs 0.78.

Approach on Technical: Momentum on indices continue to remain strong, Nifty around 19550 zone Banknifty around 45000 is seeing some supply.  Nifty @ 19232 & Banknifty @ 44228 are key levels

GIFT NIFTY @ 19635 up 16 points at 8:05 AM

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Research Report

Global Market – U.S. inflation softening & U.S. Fed preparing for another rate hike

Global Market – Inflation softening & U.S. Fed preparing for another rate hike

This week we will discuss softening of inflation to below 4%, lowest level since April 2021.  US Fed is behind the curve in this cycle.  US CPI & Core CPI data do indicate softening, so now the focus will shift to US Fed meeting on 26-Jul-23.  

US CPI & PPI data – indicate softening

After strong jobs data in first week of July and US FOMC meeting minutes, market is now factoring in 25-bps rate hike on 26-Jul-23.  But CPI & Core CPI data released this week could trigger one more pause before US Fed could review its decision.

Equichain Wealth Advisors: Market View & Opinion

US Fed has long term inflation target of 2% and latest data released is still above U.S. Fed’s long term inflation target.   Current US interest rate is at 5.00% – 5.25%.  In year 2006 – 07, interest rate in US was at 5.25% and sustain at that level for 14-months before we have seen sub-prime crisis.

We believe, economic slowdown and inflation cooling has direct co-relation.  Corporate earnings may get impacted with leg effect as interest rate hike takes some time to show its impact on bottom of pyramid.

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Weekly Reports

8-Jul-23 Technical & Fundamental Insight

Last week – review

Going into trade this week, we maintain status quo and keep exposure around 70% to 85%.  Momentum in indices continue at the beginning of the week which later witness some selling pressure on Friday.  Nifty Small-cap 100 gain by 2.60% this week, other indices gain was capped below 1%.

Technical Insight

• Nifty level for this week would – support level @ 19181 & 18977 & resistance level @ 19512 & 19781.  Nifty likely to continue in consolidation zone with negative bias.

• Banknifty level for this week would – support level @ 44773 & 44228 & resistance level @ 45655 & 45990.  Banknifty seems to be in consolidation zone in uptrend.

Approach on Technical: Indices RSI & RSI average trading near 70 level before seen some supply at higher level after rally of 4% – 5% on Nifty & Banknifty with out any correction.  Fast up move on Indices do indicate some consolidation would be healthy.

Our strategy would to find fresh entry opportunity on correction, Nifty @ 18977 & Banknifty @ 44228 & 43345 would provide healthy entry opportunity.  We would avoid chasing momentum and play catch-up in upward momentum.  

Fundamental Insight

1) Annual Economic Review: Amidst Durable Domestic Growth, External Risks Persist
2) India’s Services PMI Stays Strong Despite Easing In June
3) India Should Push to Add Its Bonds to Global Indexes: RBI Report

Equichain Wealth: Market View & Strategy

Market will now focus on earnings season; IT will start earnings season with HCLTECH & TCS to come out with result on 12-Jul-23 & INFY on 20-Jul-23.  HDFCBANK which usually comes out with result in 2nd week and first among private banks to declare earnings is yet to announce day for Q1FY24 result.

We will continue to maintain strategy to remain invested in range of 70% to 85% and continue keep cautious stance.  Recent run-up seen on indices was too fast as compared to expectation.  Global cues continue to remain muted and indicate rate could go higher.

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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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