This Week in a nutshell (Nov 22nd to Nov 26th)

This Week in a nutshell (Nov 22^nd to Nov 26^th)

Technical talks

NIFTY opened the week on 22^nd Nov at 17,796 and closed on 26^th Nov at 17,026. During the week, NIFTY lost more than 4 percent and has formed a bearish candle with its opening and closing being near the highest as well as the lowest point of the week, respectively. At the current juncture, on the weekly chart, the index has breached the 20-weekly moving average while the RSI marked a fresh 14-week low.

Going ahead, the level of 16,700 is likely to act as strong support in the near term and the levels of 17,300 and 17,480 will act as immediate resistance levels. Nifty Pharma gained 2.3 percent this week while Nifty Auto (-8.4%) and Nifty PSU Bank (-6.5%) lost the most.

Weekly highlights

• The week started in red amid concerns over the government’s reform measures after farm laws repeal announcement and weak listing of the country’s largest fintech firm Paytm.
• However, on Thursday optimism over near-term growth prospects boosted sentiment after credit rating agency Moody’s said it expects India’s economic growth to rebound strongly in the next financial years.
• The party was short-lived as on Friday the new variant of Coronavirus certainly spooked the market participants across the globe. NIFTY was down by 2.9 percent and also, marked a fresh swing low on Friday by slipping below the 17,000 mark.
• As per UK officials, the new Coronavirus variant has a spike protein that is dramatically different from the one, which vaccines are based, raising fears it could evade the immune response reported by early reports from the media.
• Wall Street retreated from record highs on Monday, and shares of lenders rallied as two-year US Treasury yields rose after President Joe Biden tapped Jerome Powell to continue as Federal Reserve chair. However, rising Treasury yields prompted investors to sell Tesla and other Big Tech names and buy stocks with lower valuations.
• On Friday, S&P500 was down by 2.27% due to worries about a new strain of the virus, named Omicron. The Dow Jones Industrial Average fell by 2.5%, its biggest one-day percentage drop since oct-20. The new strain might complicate the outlook for how aggressively the Federal Reserve normalizes monetary policy to fight inflation.
• S. officials said Friday they would impose travel restrictions on eight southern African countries in response to the new variant found in South Africa. It has also been reported in Israel and Belgium.
• The foreign institutional investors (FII) sold equities worth Rs 21,125 mn, while domestic institutional investors (DIIs) bought equities worth Rs 10,934 mn.

Things to watch out for next week

• Post 2QFY22 quarterly earnings season, markets this week will be driven mostly by updates related to the new coronavirus variant that sent equities tumbling globally on Friday, macroeconomic data announcements, and auto sales numbers.
• US: Investors will be watching Fed Chair Jerome Powell and U.S. Treasury Secretary Janet Yellen’s appearance before Congress to discuss the government’s COVID response on 30^th Nov as well as U.S. employment numbers, due out next Friday.

Disclaimer: “The views expressed are for information purposes only. The information provided herein should not be considered as investment advice or research recommendation. The users should rely on their own research and analysis and should consult their own investment advisors to determine the merit, risks, and suitability of the information provided.”