#WeekInANutshell | Assetmultiplier

07 Nov

Week in a Nutshell (31st October – 4th November)

Technical talks

NIFTY opened the week on 31^st October at 17,910 and closed on 4^th November at 18,117. During the week, NIFTY gained 1.9%. It closed above 18,000 for the first time since early January this year. On the upside, the all time high of 18,600 can be the first target to achieve. On the downside, it can take support at the 50 week moving average of 17,100.

Among the sectoral indices, METAL (+7.5%), PHARMA (+2.9%), and OIL & GAS (+2.8%) were the top gainers during the week. There were no losers during the week.

Weekly highlights

The US market ended the week negatively with Dow Jones down 1.4% and S&P 500 down 3.3%.
On Wednesday, US Federal Reserve increased the repo rate by 75 basis points, taking the key repo rate to 4%, the highest since 2008. They also signalled that their aggressive campaign to curb inflation could be approaching its final stage.
On the next day, the Bank of England raised their repo rate by 75 basis points to 3%. This was the biggest hike since 1989.
In India, the government collected Rs 1.52 trillion as goods and services tax(GST) in October, a 16.6% rise year-on-year, driven by festival-related spending, higher tax rates, and better compliance. This was the second-highest monthly collection since the implementation of the indirect tax regime in July 2017. GST collection touched a record high of Rs 1.67 trillion in April. This is the eighth month in a row that monthly GST revenue has been more than Rs 1.4 trillion.
Electric two-wheeler registrations have hit an all-time high for 2022, touching close to 68,324 vehicles in the festival month of October this year, an increase of 29 per cent over the last month. However, ICE two-wheeler registration has grown even faster than electric vehicles. Overall two-wheelers have shot up by over 45% in October compared to September. With this latest figure, electric two-wheelers now account for around 4% of total two-wheeler registrations between January-October.
Electric passenger and motor vehicles(light, medium and heavy) which includes motor cars and buses have seen their registrations more than double in the calendar year 2022 till October 31 with another two months still to go. They have hit registrations of 31,281 vehicles compared to 13,884 for the full year of 2021 a growth of over 125% according to data from VAHAN.
Credit card issuers saw significant erosion of their card base during the July-September quarter as the Reserve Bank of India’s (RBI) norms mandated the deactivation of cards that have been inactive for a year. In April this year, the RBI came out with a master direction on credit and debit card issuance. It said if a credit card has not been used for more than one year, the process to close the card should be initiated after intimating the cardholder. The second quarter of the current financial year saw an outstanding cards-in-force decline by 2.55 million to 77.7 million. Meanwhile, credit card spending has continued to be on an upward trajectory. They topped the Rs 1 trillion mark for six consecutive months. Spends touched a record high of Rs 1.22 trillion, buoyed by higher discretionary spending during the festive season.
Credit to industries in September 2022 grew at the fastest pace it has grown in the last 100 months, aided primarily by a pick-up in working capital loans from corporates.
According to the latest sectoral deployment data of the Reserve Bank of India, credit to industries, which accounts for 27.6% of non-food credit, was up 12.6% year on year to Rs 32.4 trillion. Month on month, it rose 1.4%, the highest in seven months. On a year-to-date basis, it was up 2.7%.
During the week, Foreign Institutional Investors (FIIs) net bought shares worth Rs 10.3 bn, however, Domestic Institutional Investors (DIIs) sold shares worth Rs 4.5 bn.

Things to watch out for next week

Next week is a four-day work week as NSE and BSE will be closed for trading on Tuesday 8^th, on account of Gurunanak Jayanti.
The biggest economy, the US will report its inflation number for October this week. The second biggest economy, China will report its balance of trade data for the month of October. Political disputes kept aside, our dependence on that country for the import of raw materials cannot be ignored. Hence, this is an important datapoint to keep track of.
The result season for July-September quarter is coming to an end with biggies like Godrej Consumer, Tata motors, M&M, amongst others reporting their results. We expect stock specific 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.”

By Pranav Mahajan #WeekInANutshell week in a nutshell 0 Comments Read more...

29 Oct

This Week in a nutshell (Oct 24th to Oct 28th)

Technical talks

This week was a truncated one on account of Diwali. NIFTY opened the week on 25^th October at 17,794 and closed on 28^th October at 17,786. The 50WMA of 17,061 may act as a key support level, while the recent weekly high of 17,838 may act as key resistance for the index.

Among the sectoral indices, PSU Bank (+5%), Auto (+4%) and PSE (+3.5%) were the top gainers while FMCG (-0.7%), Media (-0.4%) were the losers in the week.

Weekly highlights

The Monetary Policy Committee will meet again on November 3rd, according to the central bank. According to an RBI statement, the meeting would be held in accordance with RBI Act Section 45ZN, which describes the actions the central bank may take if it fails to achieve the inflation target.
California-based company, Apple Inc’s revenue and profit both topped analysts’ estimates despite sales of iPhones and services being softer than expected last quarter. High levels of inflation and a slowdown in consumer spending are expected to impact the growth prospects of the company in the near term.
Following a meeting with King Charles III, Rishi Sunak, the leader of the Conservative Party, was sworn in as prime minister of the United Kingdom on Tuesday, according to a statement sent by Downing Street late on Monday.
Oil’s weekly gain was curtailed as investors stayed away from risky investments due to the deteriorating outlook for China and the global economy as a whole. As a risk-off mood extended over larger markets on Friday, West Texas Intermediate fell to about $88 per barrel. Investors’ expectations that Beijing will prolong its time to abandon Covid Zero are dimming China’s economic development prospects, while the economies of France and Spain shrank in Europe.
The US markets bounced back after a series of bear market lows as tech shares rallied followed by Apple’s earnings release that topped analysts’ estimates. US’s economic data also contributed to positive investor sentiments as it revealed that the Federal Reserve’s fight against inflation is making some headway. The fourth consecutive rate increase of 75 basis points by the Fed is still anticipated by economists to take place next week.
FII (Foreign Institutional Investors) turned net buyers this week, selling shares worth Rs 39,860 mn. DII (Domestic Institutional Investors) were net sellers, buying shares worth Rs 12,400 mn.

Things to watch out for next week

We expect markets to continue volatile as a result of investor reactions to earnings releases and macroeconomic news such as supply-related constraints, interest rate hikes, and rising inflation.
The monthly auto volume data from companies like Bajaj Auto, Maruti Suzuki, and Tata Motors will be watched. Commentaries about festive demand, export business from auto companies are expected to give some idea about the domestic and international economic recovery.

By Rutuja Chavan #WeekInANutshell economy, interest rate 0 Comments Read more...

15 Oct

This Week in a nutshell (Oct 10th to Oct 14th)

This Week in a nutshell (Oct 10^th to Oct 14^th)

Technical talks

NIFTY opened the week on 10^th October at 17,094 and closed on 14^th October at 17,186. During the week, NIFTY was up 0.5%. The index can revisit 17,050 on the downside. On the other hand, the near-term resistance is at 17,350.

Among the sectoral indices, IT (+0.8%), Private Bank (+0.5%) and Bank (+.3%) were the top gainers during the week. Realty (-4.2%), Media (-3.6%) and Metal (-2.8%) were the top losers in during the week.

Weekly highlights

Wall Street continued bleeding this week. The week started low as investors were concerned about Fed’s monetary tightening trajectory and its impact on the corporate earnings along with ongoing geopolitical tensions.
The downfall continued after minutes from the last Federal Reserve meeting showed policymakers agreed they needed to maintain a more restrictive policy stance. Bank of England indicated that it would support the country’s bond market for just three more days.
Thursday’s hot CPI data which sparked an initial selloff in all three major U.S. indices dominated the week. Investors also digested higher-than-expected producer price inflation, a more-than-expected rise in jobless claims, slightly improved consumer sentiment data which also came with a surprise rise in one-year inflation expectations, flat retail sales for September, and a bigger-than-anticipated fall in import prices.
US prices rose 0.4 percent MoM in September, twice the 0.2 percent projected by analysts, with price increases for food, shelter and medical care weighing on consumers, according to data from the Bureau of Labor Statistics.
The annual rate of inflation slowed slightly to 8.2 percent from 8.3 percent, according to the report. It indicated that pricing pressures have become more intractable despite aggressive central bank action.
The week also saw the earnings season kick off with major U.S. banks reporting their results.
Back home, Indian market’s direction was set by the IT companies quarterly results during the week.
The week started in red but bounced back due to impressive quarterly results announced by Infosys, TCS, strong micro and stable oil price.
The International Monetary Fund (IMF) announced another cut to its gross domestic product (GDP) growth forecast for India for FY23E by 60 bps to 6.8 percent. The report stated weaker-than-expected outturn in the second quarter and more subdued external demand.
India’s industrial growth, as per the Index of Industrial Production (IIP), slid to an 18-month low of (0.8) percent in August from 2.2 percent in July, data released by the Ministry of Statistics and Programme Implementation.
Headline retail inflation measured by the Consumer Price Index (CPI) rose to 7.41 percent in Sept-22 from 7.00 percent in Aug-22.
During the week, the rupee fell further and touched a fresh record low of 82.7. However, domestic currency ended marginally lower at 82.4 per dollar on 14^th Oct-22 against its 7^th Oct-22 closing of 82.3.
The foreign institutional investors (FIIs) remained net seller for the week as they offloaded equities worth Rs 99,417 mn. However, domestic institutional investors (DIIs) purchased equities worth of Rs 70,310 mn during the week gone by.

Things to watch out for next week

Us Equity market: In the week ahead, the result season will kick off in earnest, with major names like Tesla Inc., Netflix, and Johnson & Johnson, among others reporting numbers.
As the earnings season picks up, Indian markets will look out for HDFC Bank’s numbers on Monday. The bond market of US and India will give an idea of the level of inflation and the market’s reaction to it will keep the market volatile.

By Richa Varu Rathod #WeekInANutshell 0 Comments Read more...

10 Oct

This week in a nutshell (03rd October – 07th October)

Technical talks

NIFTY opened the week on 3^rd October at 17,102 in the red and ended in the green at 17,315 on 7^th October, after high volatility during the week. The index closed marginally in the green during the week. The next support and resistance levels for the index would be 17,262 and 17,412 respectively. The RSI (14) of 50 indicates the index is showing signs of recovery.

Among the sectoral indices, MEDIA (+5.5%), REALTY (+3.8%), IT (+4%), and BANK (+2.7%) were the gainers during the week while METAL (-1.2%), OIL AND GAS (-1.0%) and HEALTHCARE (-0.9%) led the losers.

Weekly highlights

US major indices closed the week in red after the US Employment data erased the gains made during the week, the S&P 500, Nasdaq, and Dow Jones closed the week with losses of 1%, 2%, and 1% respectively.
Oil prices settled higher on Friday as OPEC has maintained its policy of cutting down production in the wake of an impending demand slowdown, the Brent crude and WTI crude ended the week with a gain of 10% and 9% respectively.
India’s tax collection from the sale of goods and services soared 26 per cent to Rs 1.47 trillion in September, on account of rising demand, higher rates, and greater tax compliance. The Goods and Services Tax (GST) collection remained above the Rs 1.4 trillion mark for the seventh straight month during the month up 27% YoY.
S&P Global India Manufacturing PMI in September was 55.1, as against August’s 56.2. Despite cooling down from August, despite India’s manufacturing activity losing a bit of momentum the rates of expansion remained historically high. The S&P report stated that manufacturing PMI was in expansion for the 15th month in a row.
Indian automakers witnessed strong sales growth in September as an improved supply of vehicles and pre-festive season inventory build-up at dealerships boosted dispatches. Carmakers either reported the highest-ever monthly sales or touched peak dispatches in many months. For two-wheeler companies, exports were weak with motorcycle sales also disappointing in the domestic market. The sales volumes in the commercial vehicles and tractors segment were also robust, suggesting an even stronger festival season for companies.
The World Bank on Thursday projected a growth rate of 6.5 per cent for the Indian economy for FY23, a drop of one per cent from its previous June 2022 projections. India is expected to be the outperforming economy in FY23 despite multiple headwinds.
OPEC+ agreed on its deepest cuts to oil production since the COVID-19 pandemic on Wednesday by 2 million barrels per day. The cut could spur a recovery in oil prices that have dropped to about $90 from $120 three months ago on fears of a global economic recession, rising US interest rates and a stronger dollar.
The foreign institutional investors (FII) continued to be sellers and sold equities worth Rs 360 mn while Domestic institutional investors (DIIs) continued to be buyers and bought equities worth Rs 9,640mn during the week.

Things to watch out for next week

This week will be very crucial for Indian Equity markets as the investors will closely watch Q2 Earnings releases from IT companies, and commentary about demand headwinds and deal pipelines would be on the radar.
Various Macroeconomic statistics such as IIP, CPI, WPI, Balance of Trade and the RBI MPC Policy Meet Minutes will be out in the upcoming week which may lead to increased volatility during the week.

By Pratik Mate #WeekInANutshell #Personal Finance #stock market, week in a nutshell 0 Comments Read more...

01 Oct

This week in a nutshell (26th September- 30th September)

Technical talks

NIFTY opened the week on 26^th September at 17,165 and closed on 30^th September at 17,094 after declining to 16,750. The 50WMA of 17,100 may act as a key support level, while the recent weekly high of 18,320 may act as key resistance for the index.

Among the sectoral indices, Pharma (+2.9%) and IT (+1.5%) were the top gainers while Energy (-3.5%), Auto (-3%), and Realty (-3.0%) were the losers in the week.

Weekly highlights

On 30^th September, in its ongoing attempts to control inflation in the economy, India’s Monetary Policy Committee increased the benchmark repo rate by 50 basis points to 5.9%, marking its fourth straight increase. The Monetary Policy Committee maintained its stance of focusing on removing accommodative measures in order to keep inflation within target while fostering growth in the upcoming years. At an unanticipated meeting in May, the committee raised rates for the first time by 40 basis points. Then, by 50 basis points in June and 50 basis points in August
The majority of the drop in India’s foreign exchange reserves is due to the shift in valuation as the dollar rose. India’s foreign exchange reserves stood at $537.5 billion, Das said in his monetary policy speech on Friday. About 67% of the decline in forex reserves in FY23 was due to valuation changes resulting from dollar appreciation, he said.
The year’s best market for car sales is still India. Sales have been consistent thus far in 2022, and with the festive season commencing at the end of September, we anticipate a higher fourth quarter, according to a note written by Moody’s Investor Service. India will beat its regional and international competitors thanks to a more improved macroeconomic climate, the reduction of semiconductor shortages, and dealer restocking, it added.
According to the Swedish news agency, a fourth leak on the Nord Stream pipeline has been discovered off the coast of southern Sweden. All four leaks that have been found are in international seas; two are close to Sweden and two to Denmark. Since Russian President Vladimir Putin invaded Ukraine seven months ago, Europe and, by extension, the rest of the world, have been dealing with an energy crisis. The pipeline leaks have added to Europe’s existing economic woes.
Concerns about historically high inflation and future monetary tightening by central banks, particularly the Federal Reserve, would probably temper any sustained rally. BOE’s sudden intervention to buy an unlimited amount of long-dated bonds sparked record gains for gilts. Last Friday’s announcement of significant tax cuts by UK Chancellor of the Exchequer Kwasi Kwarteng led to a run on British assets due to worries about the government’s ability to pay for the change and its potential to further accelerate inflation.
US markets plummeted repeatedly by the Federal Reserve’s resolve to keep raising interest rates until inflation eases. Wall Street indices were volatile during the week with Nasdaq and S&P ending 1.7% and 1.5% lower respectively on Friday.
As concerns about restricted oil supplies were overshadowed by growing worries about a global recession and a rising dollar, oil is anticipated to post its first quarterly loss in more than two years. West Texas Intermediate prices, which have fallen by almost 24% this quarter, were trading close to $80 a barrel on Friday. The dollar’s recent record-high rise has rattled crude as aggressive central bank rate hikes cloud the outlook for global growth.
FII (Foreign Institutional Investors) turned net sellers this week, selling shares worth Rs 1,59,900 mn. DII (Domestic Institutional Investors) were net buyers, buying shares worth Rs 1,37,440 mn.

Things to watch out for next week

Auto companies are expected to release their September volumes of sales. The early festive season this year, which started on 26 September versus 7 October last year, is expected to brighten the outlook for the passenger vehicle (PV) segment. However, the two-wheeler (2W) segment is expected to be muted given the weak rural demand.
Quarterly updates by FMCG companies like Marico and banks are expected to drive the markets in the coming week.

Disclaimer: “The views expressed are for information purposes only. The information provided herein should not be considered 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.”

By Rutuja Chavan #WeekInANutshell MPC, rate hikes 0 Comments Read more...

26 Sep

This week in a nutshell (19th September- 23rd September)

Technical talks

NIFTY opened the week on 19th September at 17,540 and closed on 23rd September at 17,327. The index lost 1.2% during the week. The index has managed to sustain above the 50DMA of 17,327 level, which is acting as a support. On the upside, the recent high of 18,114 might act as a resistance.

Among the sectoral indices, FMCG (+3.9%), PHARMA (+2.1%), and AUTO (+1.1%) were the top gainers while REALTY (-3.9%), PSU BANK (-3.1%), BANK (-3.0%) were the losers in the week.

Weekly highlights

Wall Street indices were volatile and reacted to because of the Fed’s interest rate decision on 21st September. Nasdaq and S&P ended 1.6% and 1.7% lower respectively.
Oil prices during the week reacted to supply concerns ahead of the European Union embargo on Russian oil which offset fears of a global recession that could dampen fuel demand, stalled Iran nuclear agreement, and Fed interest rate hike. Brent oil futures and WTI futures ended lower wherein the former settled at USD 85/ barrel and the latter 5% lower at USD 79/barrel.
The Federal Reserve raised its key interest rate by 0.75% on Wednesday, bringing the target range to between 3% and 3.25%. According to the Fed’s forecasts, interest rates will reach 4.4% by FY23E.
On September 22nd, the Bank of England raised its key interest rate by 0.5% to 2.25% from 1.75%, which is its biggest rate hike in 27 years.
According to a circular issued by the Ministry of Finance on September 16, the government of India reduced the windfall tax on locally produced crude oil to Rs 10,500 from Rs 13,000 per tonne, easing the burden on consumers.
The RBI is depleting its foreign exchange reserves at a faster rate than during the taper-tantrum period in 2013, in order to prevent the rupee from overshooting. The country’s foreign exchange reserves fell by USD 2.2 bn for the week ended September 9 to USD 550.8 bn due to a drop in foreign currency assets (FCAs), a major component of overall reserves. Between January and July 2022, the RBI sold a net of USD 38.8 bn from its forex reserves. In July alone, a net of USD 19 bn was sold, and intervention remained intense in August when the rupee fell below 80 against the dollar.
The Asian Development Bank cut its growth forecasts for Asia, which includes India and China, for 2022 and 2023 on September 21 due to mounting risks from increased monetary tightening, the fallout from Ukraine’s war, and Covid-19 lockdowns in China. The ADB forecasts a 4.9% growth in the region’s economy in 2023.
On September 20, Yes Bank announced that its board of directors had approved the sale of USD 6 bn (approximately Rs 480 bn) in stressed debt to private equity firm JC Flowers after the bank received no challenger bids to JC Flowers’ base bid for the Rs 48,000 crore NPA portfolio.
FII (Foreign Institutional Investors) turned net sellers this week, selling shares worth Rs 43,620 mn. DII (Domestic Institutional Investors) were net buyers, buying shares worth Rs 11,380 mn.

Things to watch out for next week

Fed’s 75 basis point rate hike is expected to have a ripple effect which will weigh on MPC’s monetary agenda when it meets on 28th September. Investors will be looking forward to the comments from RBI regarding inflation and interest rate hikes.
Various economic data points are set to be released next week starting from Japan’s PMI and policy meet, China’s industrial profits and manufacturing PMI, US 2QFY22 GDP data, and jobless claims for the week.

By Rujuta Tamhankar #WeekInANutshell 0 Comments Read more...

17 Sep

This week in a nutshell (12th – 16th September)

Technical talks

NIFTY opened the week on 12^th September at 17,891 and ended in the red at 17,531 on 16^th September, after high volatility during the week. The index lost 2% during the week. The next support and resistance levels for the index would be 17,497 and 17,636 respectively. It broke its 20 DMA levels and closed below that.

Among the sectoral indices, METAL (+1.9%), PRIVATE BANK (+1.3%), and BANK (+0.9%) were the gainers during the week while IT (-7%), REALTY (-3.3%) and OIL & GAS (-3.2%) led the losers.

Weekly highlights

US major indices witnessed huge volatility during the week and closed the week in the red, inflation data and the federal reserve’s announcement in the next week regarding interest rate dragged down the investors’ sentiments the S&P 500, Nasdaq, and Dow Jones closed the week with heavy loss of 5%, 6%, and 4% respectively.
Oil prices fell for a third straight week, the Brent crude and WTI crude closed with a loss of 1% and 1.3% respectively during the week.
India’s retail inflation based on Consumer Price Index (CPI) surged to 7% in Aug-22 and burst the downward trend of the last 3 months. The surge was mainly led by higher food prices, as it accounts for nearly half of the CPI basket. The inflation remains above the RBI’s tolerance level of 6% for the last 8 months in a row. Along with CPI India’s Wholsale Price Index (WPI) data was also released. India’s WPI inflation stood at 12.4% in Aug-22, a decline from 13.9% in Jul-22, drop in fuel prices dragged down the WPI inflation below the previous month.
US CPI data was released during the week ahead of the Federal Open Market Committee (FOMC) meeting in next week, US CPI inflation stood above the expectation at 8.3% for Aug-22. The decline in gasoline prices helped to cool down the rate compared to the previous two months’ rate but the cost of food, housing, and autos remains elevated.
Mining conglomerate Vedanta and Taiwanese electronic manufacturer Foxconn announced an investment of Rs 1,540 Bn for India’s first semiconductor plant in Gujrat through a 60:40 joint venture. The plant is expected to start production in two years. Local manufacturing of chips is expected to bring affordability to manufacturing electronic devices and it will reduce the dependency on other countries.
Union health and family welfare ministry of India released the National List of Essential Medicines 2022 (NLEM 2022) on Tuesday. The NLEM 2022 consists of 384 drugs vs 376 drugs in 2015. New 34 drugs were added and dropped 26 drugs in the new list. The National Pharmaceuticals Pricing Authority (NPPA) fixes the prices for these drugs. The government said several important medicines will become more affordable and reduce patients’ out-of-the-pocket expenditure.
On Thursday, IMF spokesperson stated that the global economic outlook continues to be dominated by downside risk and in CY23 some countries are expected to fall into recessions, but it is too early to say if there will be a widespread global recession. IMF revised down the CY22 and CY23 global growth to 3.2% and 2.9% respectively in Jul-22.
Data released by the commerce ministry of India shows India’s merchandise export stood at USD 33.9 bn and trade deficit stood at USD 27.9 bn for the month of Aug-22. Electronic goods, rice, oil meals, tea, coffee, and chemicals witnessed positive growth.
Foreign investors invested ~ Rs 56 bn into the domestic equity markets in September so far in the anticipation of growth in consumer spending on account of the upcoming festive season and stronger macro fundamentals than other emerging markets.
The foreign institutional investors (FIIs) and Domestic institutional investors (DIIs) both were the net sellers during the week. FIIs sold equities worth Rs 19,216mn and DIIs sold equities worth Rs 29,368mn.

Things to watch out for next week

Next week will be very crucial for the global financial markets as the investors will closely watch the Federal reserve’s FOMC interest rate decision on Wednesday and the Bank of England MPC meeting on Thursday as well as initial jobless claims in the US.
The investors might ride a rollercoaster in the next as volatility will likely persist in the next week amidst central banks’ stance on interest rates, heated inflation, and raw material and supply chain uncertainties on account of geopolitical tensions and elevated commodity prices.

By Pratik Talvatkar #WeekInANutshell 0 Comments Read more...

11 Sep

This Week in a Nutshell (5th – 9th September)

Technical talks

NIFTY opened the week on 5^th September at 17,546 and closed at 17,833 on 9^th September. The index made a weekly gain of 1.7% during the week. On the upside, the upper Bollinger band level of 18,199 might act as a resistance. On the downside, it can take support at the 50-week moving average near 17,137. Even though the RSI of 60 does suggest some caution, in the recent past NIFTY has comfortably traded at a 60+ RSI level.

Among the sectoral indices, PSU BANK (+4.3%), IT (3.5%), and MEDIA (3.2%) led the gainers during the week. AUTO was the only sector that ended marginally in the red.

Weekly highlights

The US indices snapped a three-week losing streak despite remarks from the Federal Reserve officials on rising treasury yields. Geopolitical tensions and the US central bank’s aggressive tightening may tip the US economy into recessions were on investors’ minds during the volatile week. The US markets had a truncated week due to Labor Day weekend with the tech stocks and blue chips leading the rally. NASDAQ closed up 4.1%, S&P 500 up ~3.7%, and Dow Jones Industrial Average up ~2.7%.
Crude oil prices also remained volatile during the week with the OPEC+ meeting on Monday 5th. To support oil prices, which have fallen due to concerns about an economic downturn, OPEC and its partners, led by Russia, decided on a modest reduction in production. For October, the oil producers will reduce their output by 100,000 barrels per day (bpd), or just 0.1% of the world’s demand. They also concurred that Saudi Arabia, the organization’s dominant member, could call an emergency meeting at any time if volatility continues. Price hikes due to the output reduction would worsen India’s current account deficit.
The volatility in crude prices continued after reports that the Biden administration might stop releasing barrels from the US Strategic Petroleum Reserve on the market after October, in an attempt to keep energy prices down that have led to unprecedented inflation. Brent Oil ended the week at USD 92.4/barrel (-0.7%) while Crude Oil WTI (West Texas Intermediate) ended the week down 2.4% at USD 86.1/barrel.
After Russia announced that one of its key gas supply pipelines to Europe will remain closed indefinitely, gas prices in Europe increased by 30% on Monday. A leak in the Nord Stream 1 pipeline, according to Russia, will cause it to remain closed beyond the three days of scheduled repair last week.
In India, FADA released the data for retail sales of automobiles for August-22. The sales grew 8.3% YoY driven by an increase in vehicle registrations across all major segments. Two-wheeler retail sales grew 8.5% YoY while passenger vehicle sales grew ~6.5% YoY.
The National Company Law Tribunal (NCLT) Mumbai panel directed Zee Entertainment to call a shareholders’ meeting on October 14 to approve the merger with Culver Max Entertainment on Wednesday (formerly Sony Pictures Network).
To increase domestic supply in response to a decline in the area under the paddy crop in the current Kharif season, the Indian Government implemented a 20 percent export levy on all non-Basmati rice, with the exception of parboiled rice.
The Foreign Institutional Investors (FII) purchased equities worth Rs 61,367mn. Domestic Institutional Investors (DII) sold shares worth Rs 3,521 mn.

Things to watch out for next week

Global markets will watch out for the US inflation numbers expected to be released on Tuesday 13th, ahead of the Federal Reserve policy meeting on September 20-21.
Indian investors’ attention would be on the consumer price index (CPI) inflation numbers for August, before the monetary policy meeting scheduled to be held towards the end of September. The industrial production data for July and wholesale price index (WPI) inflation for August is also expected to be released in week starting 12^th.

By Maitreyee Vaishampayan #WeekInANutshell INFLATION, oil prices 0 Comments Read more...

03 Sep

This Week in a nutshell (Aug 29th to Sep 2nd)

Technical talks

NIFTY opened the week on 29^th August at 17,189 and closed on 2^nd Sep at 17,540. During the week, NIFTY was up 2.0%. Index has breached 50-week moving average on the weekly chart with RSI at 58. Immediate support for the index stands at 17,137 and resistance at 17,559.

Among the sectoral indices, Realty (+3.0%), Auto (+2.2%), and FMCG (+2.1%) were the top gainers during the week. IT (-3.4%), Pharma (-0.7%) and Metal (-0.3%) were the top losers in during the week.

Weekly highlights

Wall Street was bleeding this week. The downfall started as investors were worried about the Federal Reserve’s determination to aggressively hike interest rates to fight inflation even as the economy slows.
Fed Chair Jerome Powell told the Jackson Hole central banking conference in Wyoming the Fed would raise rates as high as needed to restrict growth and keep them there “for some time” to lower inflation running at more than three times the Fed’s 2 percent goal.
The Fed’s stance worsened concerns about an economic slowdown and caused a significant selloff in the US market with the spillover roiling markets around the world.
The downwards rally continued as a rise in job openings fuelled fears the U.S. Federal Reserve has another reason to maintain its aggressive path of interest rate hikes to combat inflation.
On Thursday, US investor focus turned to a key report on the labor market. The weekly jobless claims fell more than expected to a two-month low last week and layoffs dropped in Aug-22, giving the Fed a cushion to continue raising rates to slow the labor market.
The S&P 500 ended the week with a loss of 3.3%. The index fell 1.1% on Friday after early gains from a U.S. jobs report as worries about the European gas crisis began.
The global markets continued to be in red as weak Chinese data and new Covid-19 lockdowns in China weighed on sentiments and on deepening worries about aggressive rate hikes and record-high inflation in the Euro region.
Japan’s jobless rate was steady at 2.6 percent in July, while the availability of jobs grew for the seventh straight month to a more than two-year high, government data showed on Tuesday.
Back home, the Indian market remained volatile during the week. It had a gap up opening and recovered quickly due to weak global cues, spooked by the aggressive stance taken by the US Fed to tame inflation that triggered fresh worries about interest rate hikes. This also increased the concerns over the possible withdrawal of foreign funds from Indian markets.
Auto stock gave positive returns this week amid reporting of Aug-22 sales volumes by auto companies. New product launches and shortage of semiconductors easing helped companies to step up production ahead of the festive season that kicked in with Ganesh Chaturthi on Wednesday. In domestic retail, Passenger Vehicles sales were up ~7% MoM and 2W sales rose ~3% MoM. On commercial side, 3W sales grew ~11% MoM with CV sales flat MoM.
India’s GDP growth rate was 13.5 percent in April-June as compared to 4.1 percent the previous quarter, data released on 31^st Aug-22 by the Ministry of Statistics and Programme Implementation showed. The growth was pulled down by the poor show of the manufacturing sector, which reported a paltry 4.8 percent expansion in 1QFY23, negating the robust show by the services sector.
Oil prices tumbled below USD 100 per barrel on fears over slower economic growth due to renewed restrictions to curb COVID-19 in China and tighter monetary policy in US. West Texas Intermediate futures dropped 6.7% for the week and settled at USD 88 per barrel and Brent crude was at USD 93.95 a barrel.
Reliance Industries Ltd (RIL) held its 45^th annual general meeting where it announced the plans to invest Rs 2 tn to set up a 5G network across India and has ear marked Rs 750 bn to expand its petrochemical capacity.
The foreign institutional investors (FIIs) were net buyers for the week as they purchased equities worth Rs 13,062 mn. Domestic institutional investors (DIIs) were net sellers as they offloaded equities worth of Rs 2,307 mn during the week gone by.

Things to watch out for next week

For the energy sector, a crucial OPEC+ meeting at the start of the week could decide the near-term fate of oil prices, while the global gas industry gathers in Milan to weigh the enormous pressures caused by Russia’s invasion of Ukraine and soaring fuel costs.
India’s bank deposit growth and foreign exchange reserves would be the key data points to track. IPOs and The European Central Bank policymakers meet to take a call on interest rates would set the mood for the market.

By Richa Varu Rathod #WeekInANutshell 0 Comments Read more...

19 Aug

This week in a nutshell (16th August- 19th August)

Technical talks

NIFTY opened the week on 16^th August at 17,797; with a holiday on Monday, the four-day work week ended with NIFTY closing at 17,758 (-0.2%). The index is trading above all the moving averages on a daily as well as weekly timeframe. On the upside, the upper Bollinger band level of 18,123 might act as a resistance. On the downside, it can take support at the 50-week moving average near 17,134. Even though the RSI of 61 does suggest some caution, in the recent past NIFTY has comfortably traded at a 60+ RSI level.

Among the sectoral indices, REALTY (+1.6%), INFRASTRUCTURE (+1.5%), and FMCG (+1.2%) led the gainers, whereas PSU BANK (-1.1%), PHARMA (-0.5%), and BANK (-0.1%) were the losers this week.

Weekly highlights

September 1, 2022, has been fixed as the Demerger Record Date for the purpose of confirming the names of shareholders of the company who would be entitled to receive equity shares of Piramal Pharma (PPL). A shareholder with 1 share of Piramal Enterprises (PEL) is entitled to get 4 shares of PPL.
Auto manufacturer Mahindra & Mahindra announced that it would introduce five new electric Sports Utility Vehicles (SUVs) for both domestic and foreign markets. The first four of these vehicles are scheduled to go on sale between CY24 and CY26.
For the first time, large quantities of petroleum coke are being imported by Indian businesses from Venezuela. India’s increasing demand for Venezuela’s petcoke, an oil refining byproduct and coal substitute, is being driven by a race for low-cost fuel to power factories as the price of coal has skyrocketed globally. Petcoke is mainly used as a fuel source in power plants.
As vegetables, milk, and fuel became less expensive, India’s wholesale inflation decreased sequentially in July to 13.93%, but it stayed above 10% for the 16^th consecutive month. The WPI inflation moderated as a result of a decrease in the inflation for food goods, core-WPI, crude oil and natural gas, and major non-food items.
The government on Thursday increased the windfall profit tax on diesel export to Rs 7 per litre from Rs 5 per litre earlier. The government again imposed Rs 2 per litre tax on the export of aviation turbine fuel after scrapping it earlier this month. While introducing the new levies, the government had said that it will review exports and imports of these items every fortnight to amend its decision.
Gold dropped to a 3-week low on last Friday due to fears of the US dollar strengthening, and an interest rate hike.
US stocks closed lower on Friday, with indexes volatile after minutes from the Federal Reserve’s meeting in July suggested policymakers may be less aggressive than previously thought when they raise interest rates in September. The S&P 500 was down 1.2%, Nasdaq 100 was down 2.3%, and Dow Jones was down by 0.1% respectively.
FII (Foreign Institutional Investors) were net buyers of shares worth Rs 31,290 mn and DII (Domestic Institutional Investors) were net buyers of shares worth Rs 18,089 mn this week.

Things to watch out for next week

The corporate results season for the April-June quarter of FY23 has come to an end. Market movements are likely to be company specific. As the result season ends, investors’ attention will now be on management comments at the AGM (Annual General Meeting).
Federal Reserve Chair Jerome Powell will address the annual global central banking conference in Jackson Hole, Wyoming, on 26^th It’s a highly anticipated speech that could signal how interest rate hikes will pan out and how long they will need to stay there to bring down soaring inflation.

By Tanmay Gadre #WeekInANutshell 0 Comments Read more...