Author - Richa Varu Rathod

This Week in a nutshell (Oct 11^th to Oct 14^th)

Technical talks

NIFTY opened the week on 11^th Oct at 17,895 and closed on 14^th Oct at 18,339. During the week, NIFTY gained 2.5 percent and saw a bullish candle formation on the weekly scale. At the current juncture, support for Nifty is placed at 17,881 and 17,685 zone, while resistance can be seen around 18,365 levels.

On the sectoral front, Nifty PSU Bank, Auto and Metal index were the top gainers while Nifty IT was the only loser this week.

Weekly highlights

• The week started with TCS quarterly numbers. The IT sector was in red as the numbers fell short of analysts’ expectations.
• An investment worth Rs 75,000 mn by TPG Rise Climate and Abu Dhabi’s ADQ in Tata Motors newly formed subsidiary for the EV business uplifted the market sentiments.
• On Wednesday:
  • Government released retail inflation data. It declined to 4.35 percent in September, mainly due to lower food prices. Consumer Food Price Inflation (CFPI) for September stood at 0.68 percent in September, compared with 3.11 percent in August.
  • Industrial production grew 11.9 percent in August mainly due to a low-base effect and good performance by manufacturing, mining and power sectors that surpassed the pre-COVID level.
  • IMF retained India’s growth outlook for both the current and the next fiscal. It pegs India’s real GDP growth at 9.5 percent for FY22, 8.5 percent for FY23, and 6.1 percent by FY27.
• Government removed restrictions on domestic flight capacity and will now be allowed to operate at full capacity from October 18. The decision to ease the norms was taken after reviewing the current air travel demand.
• RBI kept repo and reverse repo rates unchanged at 4 per cent and 3.35 per cent, respectively. The central bank also retained the GDP growth forecast at 9.5 per cent for the FY22.
• The RBI Governor said that with the worst of the second wave behind us and substantial pick-up in COVID-19 vaccination giving greater confidence to open up and normalise economic activity, the recovery of the Indian economy is gaining traction. He also cautioned about the elevated global crude oil, other commodity prices, combined with acute shortage of key industrial components and high logistics costs, are adding to input cost pressures.
• Buying was seen in auto, metal, energy and banking sectors. Strong business preview numbers and favourable credit growth data ahead of 2QFY22 numbers boosted the morale further.
• US market started the week in red due to worries about surging energy prices, jammed-up supply chains and companies failing to pass on higher costs to consumers. However, better than expected quarterly earnings reports from Wall Street banks and iPhone chipmaker Taiwan Semiconductor Manufacturing Company lifted the mood.
• The foreign institutional investors (FII) bought equities worth of Rs 10,380 mn, while domestic institutional investors (DIIs) sold equities worth of Rs 32,950 mn.

Things to watch out for next week

• The quarterly earnings season will gain momentum next week as the domestic market awaits September quarter results. With the expectation of a strong recovery in corporate earnings, banking will be the key sector under focus in the coming days.
• The US will announce its crude oil inventories, which is likely to impact the global crude supplies and India’s import bill.
• Also, the initial jobless claims, US goods and services manufacturing purchasing managers’ index (PMI) would be on the radar of market participants, guiding the future course of action.

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.”

This Week in a nutshell (Sep 13^th to Sep 17^th)

Technical talks

NIFTY opened the week on 13^th Sep at 17,365 and closed on 17^th Sep at 17,585. During the week, the index hit record highs, gaining 1.2 percent and saw a bullish candle formation on the weekly scale. At the current juncture, support for Nifty is placed at 17,430 and 17,250 zone, while resistance can be seen around 18,111 levels.

On the sectoral front, Nifty Media index outperformed other indices with a gain of over 13 percent and PSU Bank index rose 5 percent. On the other hand, Nifty Metal and Realty indices fell 1 percent each.

Weekly highlights

• The week started with economic data:
  • Consumer Price Index-based Inflation (CPI) for Aug-21 came in at 5.3 percent, compared with 5.6 percent in July-21.
  • Food prices cooled further, especially in the case of vegetable inflation; data released by the National Statistical Office (NSO) showed.
  • Consumer Food Price Inflation (CFPI) for Aug-21 stood at 3.1 percent compared to 3.9 percent in Jul-21. However, concerns remained with high edible oil prices, which registered an increase of 33 percent YoY.
  • The wholesale price-based inflation rose marginally to 11.4 percent in Aug-21, mainly due to higher prices of manufactured goods, even as prices of food articles softened.
  • India’s exports rose by ~45.8 percent YoY to $33.3 bn in August and imports increased by 51.7 percent YoY to $47.1 bn, according to commerce ministry data released on Tuesday.
• An inter-ministerial task force comprising representatives from the Commerce, Railways and Shipping ministries looked to initiate several short-term actions to make more containers available to exporters and cushion prices that have gone up by 200-300 percent YoY.
• With low number of cases and increasing vaccination drives, the economic activities normalised. Domestic air passenger traffic surged 33.8 percent MoM in Aug-21, more than doubled when compared to the same month in the past year, the aviation sector regulator said.
• Finance Minister Nirmala Sitharaman on Thursday announced that the Cabinet has cleared the formation of a ‘bad bank’. The government will guarantee up to Rs 306 bn for security receipts issued by the National Asset Reconstruction Company (NARCL).
• Inflation in India is likely to ease only gradually, Reserve Bank of India Deputy Governor Michael Patra said on Thursday, adding that the outlook on growth and inflation will help determine the future course of monetary policy.
• Positive economic data and government reforms in telecom, banking and automobile sectors helped boost market sentiments. The banking sector, which underperformed till now, came into its own during the week.
• Wall street on the other hand started strongly but lost ground later as economic uncertainties and the increasing likelihood of a corporate tax rate hike dampened investor sentiment and prompted a broad sell-off despite signs of easing inflation.
• US consumer prices rose a lower-than-expected 0.3 percent in Aug-21, the smallest increase in seven months and a hopeful sign that inflation pressures may be cooling.
• Oil prices steadied at the end of the week as the threat to US Gulf crude production from Hurricane Nicholas receded.
• The foreign institutional investors (FII) bought equities worth of Rs 65,455 mn, while domestic institutional investors (DIIs) sold equities worth of Rs 22,925 mn.

Things to watch out for next week

• Nervousness would be seen in the market next week ahead of Federal Reserve and ECB meeting, which could provide some indications on when the central banks will start withdrawing their monetary stimulus and start raising interest rates eventually.
• With weak US job data and inflation increasing at a slower pace, Fed is not expected to hint on taper plans in the upcoming meeting.
• The weak global cues on account of worry over slower economic growth and rising Delta variant cases globally would keep market oscillating between greed and fear.

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.”

Technical talks

NIFTY opened the week on 12th July at 15,767 and closed on 16th July at 15,923. The index made a gain of 0.9% this week. On the downside, 10DMA of 15,816 might act as a support. Flat RSI (62) suggests a consolidation before making a strong move on either side.

Weekly highlights

• The market started the week on a positive note but erased intraday gains as key inflation data was released.
• Consumer Price Index-based inflation (CPI) for the month of June rose 6.3 percent, as food prices hardened further, and transportation costs rose due to higher petrol and diesel prices.
• Food inflation (CFPI) came in at ~5.2 percent in June, compared with ~5.0 percent in May, as food prices continued to remain inflated, official data by the National Statistical Office showed on July 12.
• Most of the IT companies reported this week with strong numbers and also increased the revenue guidance for FY22 leading Nifty to hit fresh highs. NIFTY IT was up 2.6% this week followed by NIFTY PHARMA (+1.9%) and NIFTY PRIVATE BANK (+1.8%).
• Positive global cues, rally in IT stocks, comments from the US Federal Reserve and rally in banks pushed the benchmarks to record high. However, profit booking at all-time high levels pushed benchmark indices lower as they snapped the three-day winning run-on Friday. IT stocks saw intense selling while banks also contributed to the fall.
• Nasdaq and the S&P 500 were hitting record highs at the beginning of the week as investors awaited the start of the second-quarter earnings season and a batch of economic data to gauge the next leg of the equity market. But the rally was short-lived as the biggest hike in U.S. inflation in 13 years rattled investors who fear rising interest rates could end a stock market rally that has doubled prices from 2020 lows.
• Federal Reserve Chair Jerome Powell commented that US monetary policy will offer powerful support to the economy until the recovery is complete and the pace of price increases will likely remain elevated in coming months before moderating. The language indicated that he saw no need to rush the shift towards post-pandemic policy. Long-term inflation expectations, remained consistent with the Fed’s 2% inflation target.
• Post comment the US indices fell as a rally in growth stocks ran out of steam even though US unemployment claims fell to 3,60,000 which is the its lowest level since the pandemic struck last year and strengthened views about a recovery in the labor market.
• Late Thursday, Treasury Secretary Janet Yellen warned that prices could continue to rise for several more months, expects inflation to reach normal levels in medium term and to keep a careful eye on it.
• The stock market was falling Friday following Yellen’s comments on inflation and snapped a three-week winning streak. All three major indexes notched weekly losses. The S&P 500 and Dow shed 1% and 0.5%, respectively. The Nasdaq fell 1.9%.
• The foreign institutional investors (FII) sold Rs 15,350 mn worth of Indian equity shares in the week. Domestic institutional investors (DII) undertook Rs 21,000 mn of net buying during this week.

Things to watch out for next week

• Next week, investors’ focus will largely be dominated by the quarterly results. As in half of the duration of the June quarter, the economy was in a lockdown, investors will look beyond the earnings print or just the quantitative number and focus on the qualitative commentary provided by management.

Technical talks

NIFTY opened the week on 7th June at 15,725 and closed on 11th June at 15,799. The index closed this week on a flat note. The index is trading at its all-time high levels. Indicators like RSI (14) 70 and downward turning MACD suggest a downward correction is likely. The index may take support of its 10DMA of 15,676 before making a strong move on either side.

Weekly highlights

• The week opened on a positive note as declining COVID-19 cases and positive global stocks boosted sentiment. Later the market traded lower as profit booking was witnessed in major financial stocks. The week ended on a positive note as NIFTY registered their longest stretch of weekly gains since January as new coronavirus cases slow.
• The latest World Bank report on global economic recovery post the COVID-19 pandemic predicted India’s GDP growth at 8.3 percent for the FY22. The growth projection was slashed from 10.1 percent predicted in April due to the second wave of the COVID-19 in the country.
• The US S&P 500 was weak, with investors standing by for news of a global minimum corporate tax rate, lingering inflation fears, and a lack of market-moving economic news. It continued to be weak as US CPI release was awaited.
• China’s PPI (Producer Price Index) came out. It jumped 9.0% from a year ago in May, accelerating from April’s 6.8% increase according to the National Bureau of Statistics. The result topped the 8.6% increase expected by economists polled by The Wall Street Journal, and marked the fastest YoY rise since Sep-08, when producer prices rose 9.1%. The statistics bureau said that soaring crude-oil, iron-ore and metals prices boosted factory-gate prices last month, and drove China’s imports to the fastest increase in over a decade.
• The outlook for Indian economic activity is brightening as pandemic restrictions ease and vaccinations increase. Government and central bank stimulus will continue to help. The central bank now holds more than half of the 10-year bond because of its purchases of government debt.
• Foreign Institutional Investors (FII) continued to be net buyers of Indian equities of Rs 17,410 mn. Domestic Institutional Investors (DII) continued their selling spree, with a net outflow of Rs 8,240 mn.

Things to watch out for next week

• Next week, investors’ focus will largely be dominated by economic data as the country reports official data on retail and wholesale inflation. A persistent higher print may put more pressure on RBI’s Monetary Policy Committee to start thinking about the policy normalisation.
• On the global front, investors will keenly look for data on industrial production and retail sales from US and China on June 15 and June 16, respectively, which may set the tone for world equities for the week.

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.”