This Week in a nutshell (June 14th to June 19th)

This Week in a nutshell (June 14th to June 19th)

Technical talks

NIFTY opened the week on 14th June at 15,812 and closed 1% lower on 18th June at 15,683. The index came off from it’s all-time high levels as indicated by last week’s RSI and MACD trends. The index has broken past 10DMA of 15,749 but seems to have found support at 20DMA of 15,603. These two levels on either side will be crucial indicators to understand the index movement hereon. 

Weekly highlights

• In response to the improving economic indicators and rising inflation, the US Federal Reserve indicated that fed interest rate hikes could start in 2023. The earlier indication was for the interest rates to remain near zero throughout 2023 and only start increasing in 2024. Rising interest rates would mean funds flowing away from equities and into the debt market as well as out of emerging markets and into the US. This development led to some consolidation in broader equity indices in the US as well as India. 
• In it’s monthly bulletin, RBI said that the impact of the covid-19 second wave led lockdowns has impacted the FY22E output by Rs 2 lakh crore. The report also said that unlike the first wave, the second wave has impacted rural India and in turn, the rural demand scenario.
• Shares of Adani group companies tumbled in response to a report stating that National Securities Depository Ltd. (NSDL) had frozen accounts of 3 foreign funds who are among top investors of Adani group companies. Despite clarifications from the group, the stocks continued to decline for most of the week- some declining as much as 18%. 
• Foreign Institutional Investors (FII) continued to be net buyers of Indian equities of Rs 10,596  mn. Domestic Institutional Investors (DII) continued their selling spree, with a net outflow of Rs 4,878 mn.

Things to watch out for next week

• As the result season is now well behind us, the stock markets will be driven by macro developments. The covid-19 situation as well as vaccination drive will continue to be important metrics to be tracked. 

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