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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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Daily Reports

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 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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Daily Report 9-Jun-23

RBI kept repo rate unchanged at 6.50%.  Governor Das: Inflation still above target.  RBI MPC maintain stance – Withdrawal of Accommodation.

Wall Street gained as tech stocks led the rally as Dollar index cooled-off and volatility in U.S. is below pre-COVID level.  Market now focused on U.S. inflation data and US Fed meeting next week.

RBI lowers FY24 inflation target at 5.1%, aims at 4% target.  GDP growth forecast at 6.5% for FY24.

F&O data: FII were net seller by 4542 contracts in index futures, Nifty PCR @ 1.05 Vs 1.37 previous.  Banknifty PCR @ 0.77 Vs 0.95 previous

Approach on Indices: Nifty remain in uptrend above 18619 & Banknifty could gain momentum above 44360.  Yesterday’s correction can be considered as consolidation and due to weekly option expiry.

SGX Nifty @ 18755 up 34.50 points at 8:15 AM

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Daily Report 8-Jun-23

Wall Street ended mix as market looks forward for US Fed meeting and CPI & Core CPI inflation data next week.  Fed fund rate monitor tool indicate 66.8% probability of pause.

RBI MPC meeting outcome today at 10:00 AM: – Market expecting another pause today, any change in stance from withdrawal of accommodation or relaxation in CRR could provide positive trigger.

Defense stocks continue to remain in focus ahead of PM Modi’s visit to U.S.  HAL & GE defense deal could benefit 600 MSME.

F&O data: FII bought 8579 contracts in index futures, Nifty PCR @ 1.37 Vs 1.01 previous.  Banknifty PCR @ 0.95 Vs 0.97 previous.

Approach on Indices: Nifty giving clear break-out is heading towards fresh life-time high of 18887.  Banknifty is expected to take decisive move after today’s policy

Market View: Stocks & sectors leading are changing fast, we see typical move where tail end of the stocks is showing huge rally which market usually witness in last leg of rally before formation of top.  Just need to keep close look on any sign of trend reversal.

SGX Nifty @ 18832 up 20 points at 8:10 AM

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Daily Report 7-Jun-23

Wall Street had another flat session, as market awaits US CPI & Core CPI data next week ahead of US Fed meeting on 14-Jun-23.

India’s GDP growth for FY24 is seen at 6.3% as compared with a previous estimate of 6.6% in January, according to its latest Global Economic Prospects report.

HAL gets in-principle nod for deal with GE to make engines in India: Sources.  Deal likely to get signed when PM visit U.S. later in June.

F&O data: FII were net seller by 10457 contracts, now FII have turned net short with 46.19%:53.81 long: short exposure.  

Approach on Indices: Indices are seeing sideways consolidation and we expect positive break-out.  RBI MPC policy outcome tomorrow morning will provide directional move.

Market View: Defense stocks were in focus, news of HAL deal with GE, Mid-cap & Small-cap will continue to remain in focus as it could benefit 600 MSME companies.  Broader market will take directional move only after RBI MPC decision.

SGX Nifty @ 18704 up 25 points at 8:35 AM

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7-Jun-23 Daily-Report.pdf
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