This Week in a Nutshell (19th December – 23rd December)

Technical talks

NIFTY opened the week of 19^th December at 18,284 and closed on 23^rd December at 17,807. After the rollercoaster ride during the week, NIFTY lost ~2.6% and closed in red for consecutively 3^rd week. On the upside 18,041 can be the first target to achieve. On the downside, it can take support at 17,780.

Among the sectoral indices, PSUBANK (-10.3%), MEDIA (-9%), and REALTY (-6.8%) were the top losers during the week while HEALTHCARE (+1.5%) and PHARMA (+1.2) were the only gainers during the week.

Weekly highlights

• Wall Street also faced huge volatility during the week. The week started low as investors were concerned about the US Fed’s aggressive monetary tightening path and its impact on corporate earnings along with the ongoing fear of another COVID outbreak situation around the world. The S&P 500 and NASDAQ lost ~0.2% and 2.3% respectively and Dow Jones Industrial Average gained ~0.9% during the week.
• Crude oil prices witnessed a good rally during the week, Brent crude and West Texas Intermediate gained ~6.7% and ~5% respectively and closed the week at USD 84.54/bbl and USD 79.35/bbl respectively. Cold weather is expected in the US, a reduction in the output of Russian oil, and China’s relaxed COVID policy boosted the rally in crude oil prices.
• On Thursday Reliance Retail Ventures Ltd, a subsidiary of Reliance Industries Ltd. (RIL) Announced they acquired a 100% equity stake in Metro AG’s Indian unit for the cash consideration of Rs 28.5bn. Metro India caters to the kiranas and other small businesses and merchants, with this acquisition RIL is expected to get access to a wide network of outlet, retail, and institutional buyers and better supply channel.
• On Tuesday SEBI approved the amendment to its buyback regulations and decided to phase out share buyback through the stock exchanges route in a gradual manner by 2025 and until then a separate window will be created on the stock exchanges to conduct such share buyback offer. “The SEBI chairperson said the SEBI has opted the tender offer route for share buyback as the current mode is vulnerable to favouritism.”
• The minutes of the last MPC meeting were released on Wednesday and the RBI governor said during the MPC meeting, “A premature pause in monetary policy action would be a costly policy error at this juncture.” RBI said that the headline inflation is expected to remain above or close to 6% which is the upper tolerance band in 3QFY23 and 4QFY23 and the inflation is expected to moderate in 1^st half of FY24.
• US weekly jobless claims data shows the number of Americans filing new claims for unemployment benefits increased less than expected last week indicating a tight labor market and the US consumer confidence also jumped to an eight-month high in December 2022 but the recession fears persist.
• During the week net institutional activity remains positive, Foreign Institutional Investors (FIIs) net sold shares worth Rs 9.8 bn, however, Domestic Institutional Investors (DIIs) net bought shares worth Rs 85.5 bn.

Things to watch out for next week

• US markets will have a truncated week as markets will be closed on Monday, 26^th December on account of Christmas Day. Investors will closely watch the initial jobless claims data. The US markets are likely to be less volatile during the week on account of the holiday season.
• In India investors will closely watch the weekly forex reserve data next week. Indian markets might face some volatility next week due to fears of a new COVID outbreak and comments on monetary policy from regulators.

Merry Christmas from The Asset Multiplier team! May Peace and Joy fill the coming year!

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