This Week in a Nutshell (15th – 18th November)

Technical talks

NIFTY opened the week on 15^th November at 18,141 and ended the truncated week on 18^th November at 17,765. The index made a weekly loss of 2.1%. On the upside, 17,993 could act as resistance while 100DMA of 17,020 could act as a support. RSI (14) of 44 indicates the index is nearing the oversold zone.

Among the indices, AUTO was the only sector that ended the week with gains of 0.4%. METAL (-5.3%), PSU BANK (-3.4%), and REALTY (-3.3%) led the laggards.

Weekly highlights

• Raring agency Fitch Ratings affirmed India’s long-term foreign currency Issuer Default Rating (IDR) at ‘BBB’- with a negative outlook. The negative outlook reflects lingering uncertainty around the debt trajectory. The Agency has suggested wider fiscal deficits and government plans for only a gradual narrowing of the deficit, putting a greater onus on India’s ability to return to high levels of economic growth over the medium term to stabilize and bring down the debt ratio.
• S&P Global Ratings has predicted that the Indian economy will likely grow at 11 percent in FY22 but flagged the ‘substantial’ impact of broader lockdowns on the economy. S&P said the control of Covid-19 remains a key risk for the economy.
• The Nasdaq Composite Index closed above 16,000 points for the first time, while the Dow Jones Industrial Average had a second successive weekly loss (-1.4%). The S&P 500 ended higher following strong retail earnings and positive signs for holiday shopping.
• Over 4.4mn Americans left their jobs in September-21, according to the Labor Department’s Job Openings and Labor Turnover Survey. Incentivized by wage gains and other attractive terms offered by employers desperate for talent, several Americans are leaving their jobs. This has made it challenging for employers to fill positions while driving up compensation and inflation.
• Crude oil prices fell to a six-week low following news of Australia’s lockdowns and surging Covid-19 cases in Europe threatened to slow down the economic recovery. Investors weighed a potential release of crude oil reserves by major economies for a fall in prices. Crude Oil futures settled at USD 75.7 a barrel while Brent Oil futures closed at USD 78.5 a barrel.
• India’s wholesale price inflation (WPI) jumped to a five-month high at 12.5% in October. This month’s WPI broke the 5-month downward trend as prices of manufactured items and fuel have increased. High petrol, diesel, and cooking prices drove fuel inflation to 37.2%. high prices of basic metals, textiles, plastics, and edible oil drove inflation for manufactured items to 12%.
• Prime Minister Narendra Modi announced that the three farm acts would be repealed in the upcoming session of the Parliament. The Prime Minister said a committee would be set up to make the minimum support price mechanism more transparent and effective.
• Foreign Institutional Investors (FII) continued to be net sellers this week, selling shares worth Rs 44,109 mn. Domestic Institutional Investors (DII) continued to be buyers and invested Rs 39,265mn in Indian equities this week.

Things to watch out for next week

• US markets are waiting for President Biden to nominate who will head the central bank after Jerome Powell’s term finishes in February-2022. The US markets have a truncated week next week as markets will remain shut on Thursday and Friday on account of Thanksgiving.
• The Indian equity market is likely to see more selling pressure next week amid the rising US dollar, and the beginning of the Fed Reserve’s bond-buying program. Results for September-21 have been announced by most companies. Action is likely to be stock-specific till the end of December.

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