This Week in a Nutshell (07-11 Feb)

Technical talks

NIFTY opened the week on 7^th February at 17,456 and ended at 17,375 on 11^th February. NIFTY fell 0.5% throughout the week. The next support and resistance levels for the index would be 17,330 and 17,419 respectively.

Except for METAL (+3%), all the sectoral indices fell this week, with REALTY (-2.5%), FMCG (-2.2%), and CONSUMER DURABLES (-2%) being the biggest losers.

Weekly highlights

• Indian equity markets remained volatile at the start of the week ahead of RBI monetary policy and on Friday market ended the three-day winning streak. Markets declined after the US consumer prices data came in higher than expected which rose to a four-decade high.
• On Thursday, the Reserve Bank of India kept the repo and the reverse repo rate and all other key policy rates constant and maintained its accommodative monetary stance amid the pandemic, and continue to provide support to growth. The current repo rate is at 4% and the reverse repo rate is at 3.35%.
• Consumer prices in the US climbed to 7.5% in January on YoY, the sharp YoY increase since February 1982 the data released by Labor Department on Thursday. Ultra-low interest rates, strong consumption expenditure, supply chain concerns, worker scarcity, and federal reserve policy led to accelerating inflation.
• All three major benchmark indices in the US fell on the 2^nd consecutive session after Thursday’s inflation data came higher than expectations, amid bets on aggressive federal reserve tightening policy and rising worries about Ukraine-Russia tensions.
• Oil prices settled at fresh seven-year highs amid rising fears of invasion of Ukraine by Russia and added to concerns over tight global crude supplies. Brent crude futures settled at 3.3% higher on Friday.
• Industrial output in India fell to a 10-month low to 0.4% in December-2021 as per the data released by the statistics department on Friday. It was pulled down by manufacturing, capital goods, and consumer durables output, weak consumption and investment also lead to lower industrial output.
• The tech giants in India have begun the process of getting employees back in the office. As the omicron wave subsides, companies have accepted a hybrid work model and will continue for a longer run.
• On Thursday, the Government of India approved 20 applicants of the PLI scheme for the automobile and auto ancillary industry. The PLI scheme for the industry leads to gaining a share of India in the global automobile space.
• The foreign institutional investors (FII) continued to be sellers and sold equities worth Rs 56,417 mn while Domestic institutional investors (DIIs) continued to be buyers and bought equities worth Rs 49,554 mn.

Things to watch out for next week

• Investors will turn their attention to economic factors as the earning season in India comes to an end in the next week.
• The US Federal Reserve minutes from its meeting along with European GDP data for the 4QFY21 are going to be released next week. Investors will be watching the US producer prices and retail sales for January; these events are likely to drive the market next week.
• Equity markets in India are likely to see more volatility ahead of the Fed meeting minutes and amid concerns over the Ukraine-Russia tensions.

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