#WeekInANutshell

Technical talks

NIFTY opened the week on 10^th Jan at 17,913 and closed on 14^th Jan at 18,255. During the week, NIFTY added another 2.5% and ended up with a decent bullish candle on the weekly chart, suggesting the bulls are in no mood to give up. At the current juncture, on the weekly chart, the index has breached the 20-weekly moving average while the RSI is at 64.  Going ahead, for the bulls, 18,375-18,400 would be the immediate hurdle and on the flip side, 18,150 would be the support level. If the index succeeds to close below the same, the Nifty50 could retest 18,050-18,000 levels.

Among sectoral indices, Realty (+4.9%), PSU Banks (+4.1%), and Media (+3.3%) were the top gainers while this week while FMCG (-0.13%) was the only loser.

Weekly highlights

• The Indian Indices opened high as India Inc started the earnings season with a bang giving hopes to investors that the numbers will surprise positively.
• Amid weak global markets and rising COVID-19 cases, the domestic market displayed strong momentum on expectations of a healthy start to the earnings season. However, rising inflation and a worsening pandemic soured the mood on Dalal Street by the end of the week.
• The World Bank projected India’s GDP growth at 8.3% for FY22E and 8.7% for FY23E.
• The National Statistical Office released inflation data during the week. India’s headline retail inflation jumped to 5.59 percent in Dec-21. The latest Consumer Price Index (CPI) inflation print is 68 basis points higher than the Nov-21 level of 4.91 percent. It is the highest inflation has been since Jul-21 when it had also come in at 5.59 percent.
• Globally, bourses were muted at the start of the week as reports of record-high Eurozone inflation at 5% kept investors on edge. However, Fed’s testimony to Congress uplifted the sentiments of the investors going ahead.
• Fed Chair Jerome Powell acknowledged on Tuesday that high inflation has emerged as a serious threat to the Federal Reserve’s goal of helping put more Americans back to work and that the Fed will raise rates more than it now plans if needed to stem the surging prices.
• The U.S. stock indexes rose as the week progressed after data showed that while U.S. inflation was at its highest in decades.
• The consumer price index rose 0.5% in Dec-21 after advancing 0.8% in Nov-21. In addition to higher rents, consumers also paid more for food. Prices paid by U.S. consumers jumped 7 percent YoY in Dec-21. This shows that rising costs for food, rent, and other necessities are heightening the financial pressures on America’s households.
• The weekly jobless claims report from the Labor Department was published on Thursday showing the number of Americans filing new claims for unemployment benefits increased to an eight-week high in the first week of January amid raging COVID-19 infections.
• However, U.S. stocks closed mixed on Friday, but all three major indexes suffered weekly losses as the prospect of rising interest rates and weaker economic data cast some doubt on the strength of the recovery from the COVID-19 pandemic.
• The foreign institutional investors (FII) sold equities worth Rs 40,029 mn, while domestic institutional investors (DIIs) bought equities worth Rs 36,293 mn.

Things to watch out for next week

• Markets will react to the results of two heavyweights- HCL Technologies and HDFC Bank in early trade on Monday.
• Earnings will continue to influence the market mood. Rising COVID-19 cases and threats to further curb movement and businesses and rising inflation might also set the direction of the markets.

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 Monday at  17,387 and closed on Friday at 17,813. The index made a weekly gain of 2.5%. On the upside, 17,945 could act as resistance while the 50DMA of 17,477 could act as a support. RSI (14) of 61 indicates the index is in an overbought zone.

Among the indices, BANK (+6.4%), PRIVATE BANK (+5.9%), and PSU BANK (+5.7%) led the weekly gainers while PHARMA (-2.6%), and IT (-1.5%) were the only losers.

Weekly highlights

• The S&P 500 had one of the worst starts to the year since 2016 amid pressure from tech stocks as Treasury yields continued to rally on rate hike expectations despite mixed monthly jobs data. The S&P 500 made a weekly loss of 1.9% while the NASDAQ lost 4.5%.
• Auto companies reported monthly volume data for December-21. The CV segment continued its uptrend aided by improvement in fleet utilization levels and improvement in fleet operators’ profitability. The demand recovery might come under pressure due to rising cases of the Omicron variant of the virus. Other segments such as Passenger Vehicles (PV), 2-Wheelers (2W), and tractors witnessed muted volumes, due to supply issues, a high base of Dec-20, and heavy rainfall in certain geographies.
• The yield on the 10-year Government of India bond rose to a 2-year high of 6.52% on Tuesday. This was the biggest one-day rise in bond yields in the last 4 months as India’s fiscal deficit is increasing and high inflation persists. The bond yield has been on an upward trend for many months due to a rise in bank credit-to-deposit ratio, higher inflation, and a rise in bond yields in the US. Higher yields are also likely to translate into higher interest rates on corporate borrowing and retail loans that could impact the economic recovery.
• The global benchmark, Brent crude jumped to USD 80 a barrel, as OPEC+ decided to raise its output target by 400,000 barrels per day from next month. The coalition believes the Omicron variant would have only a mild impact on demand. In a volatile week, Brent closed at USD 81.8 per barrel while the West Texas Intermediate settled at USD 78.9 a barrel on Friday.
• The US Labor Department released data that indicates over 4.5mn people left their jobs voluntarily in November-21. This number was 4.2mn in October-21 and was the most in two decades. The data indicates a persistent churn in the US labor market.
• The minutes from the US Fed’s Dec. 14-15 policy meeting offered insight into the central bank’s shift towards a tighter monetary policy to curb inflation. A very tight job market and unabated inflation showed Fed officials uniformly concerned about the pace of price increases along with global supply bottlenecks in 2022. The global markets took this stance as hawkish and led to a massive sell-off.
• With the new Omicron variant of coronavirus spreading in the country, ICRA Ltd expects that India’s GDP growth for 4QFY22 would be 40 basis points (bps) below its earlier projection of 5-5.5%.
• Foreign institutional investors (FII) turned buyers this week and bought shares worth Rs 10,828mn. Domestic Institutional Investors (DII) continued to be buyers and bought shares worth Rs 32,933mn.

Things to watch out for next week

• The bond market is likely to set the course for the week ahead as rising interest rates gave stocks a choppy start to the new year.
• The US markets will be influenced by key inflation. The next week marks the start of fourth-quarter earnings with banks such as JPMorgan Chase, Citigroup, and Wells Fargo reporting earnings.
• In India, as people revert to Work from Home due to rising omicron cases, and expectations of lockdown restrictions will be on investors’ minds. The third-quarter earnings season starts next week with IT biggies such as TCS, Infosys and Wipro set to announce earnings on January 12^th.

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 13^thDecember at 17,619 and ended the week on 17^thDecember at16,985. The index made a weekly loss of 3.6%. On the upside, 17,125 could act a resistance while 16,807 could act as a support. RSI (14) of 39 indicates the index is nearing the oversold zone.

Among the indices, IT was the only sector which ended the week with gains of 2%. REALTY (-8.4%), MEDIA (-8%), and PSU BANK (-7.8%) led the laggards.

Weekly highlights

• The US indices closed the week in the red, dragged by the hawkish stance of the Federal Reserve, and increasing worries of the Omicron variant of the COVID-19 virus. These factors combined with continued FII selling led the Indian markets lower, as Indian equities wiped out previous week’s gains and the Nifty50 ended ~4% lower.
• Federal Reserve officials have indicated they favor raising interest rates in 2022 at a rate faster than expected. The Fed chair, Jerome Powell announced the doubling in the pace of monthly bond purchases. The Federal will be buying USD 60bn of bonds each month from Jan-22, half the level prior to the Nov-21 taper, and USD 30bn less than it purchased in Dec-21.Fed presented aschedule of rate hikes, there will be three rate hikes in 2022, two in 2023 and two more in 2024.
• Union Cabinet approved Rs 760bn incentive plan for semiconductor and display board production in the country, the investment of will be spend over the next 5 to 6 years period. PLI scheme boost India’s semiconductor and display manufacturing ecosystem.
• Wholesale price inflation rose to a record high of 14.2% in Nov-21 due to the increased manufacturing and food prices, inflation in fuel prices and global supply chain issues.
• The Bank of England increased its interest rates for the first time since the starting of COVID-19pandemic. BOE increased its main interest rates from a historic low of 0.1% to 0.25% as the inflation pressure rises. In November-21,the Consumer Price Index hit a 10-year high and was above the central bank’s target. Bank expects that in April-2022 inflation will be around 6%.
• Fears over the impact of Omicron variant of the COVID-19 virus led a fall in the oil prices on Friday.With the number of cases doubling, several countries have announced restrictions. The OPEC+ said in their last meeting held in early December that they could meet ahead of their scheduled meeting on 4^th Jan 2022, if the oil demand is impacted severely due to the Omicron variant.
• Foreign Institutional Investors (FII) continued to be net sellers this week, selling shares worth Rs 104,620 mn. Domestic Institutional Investors (DII) continued to be buyers, and invested Rs 67,400 mn in Indian equities this week.

Things to watch out for next week

• In the next week investors will be watching US Consumer confidence numbers to understand if purchasers are switchingtheir habits due to theconcernsof Omicron variant and high inflation. The US markets have a truncated next week as markets will remain shut on Friday on account of Christmas Day.
• The Indian equity market is likely to see more selling pressure next week amid US dollar appreciation and the concern over the spread of omicron variant. Action is likely to be stock specific till end of December-21.

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 6th Dec at 17,209 and closed on 10th Dec at 17,511. Going ahead, the level of 17,350 is likely to act as strong support in the near term and the levels of 17,615 will act as immediate resistance levels.

Top gainers during the week were Nifty Media (+9.3%), Nifty PSU (+6.2%) and Nifty Realty (+4.6%) while no indices ended in the red.

Weekly highlights

• India’s airlines and airports are expected to lose Rs 19,5640 mn and Rs 5,1160 mn, respectively, in FY21 owing to significant disruption caused by the COVID-19 epidemic, according to the Minister of State for Civil Aviation V K Singh.
• Job openings in the United States increased in October, while hiring fell, indicating a deepening labour shortage. This might impede employment growth and the entire economy. On the last day of October, job postings grew by 431,000 to 11.0 million, indicating a rise in labour demand.
• New applications for US unemployment benefits fell dramatically last week, reaching levels not seen since 1969.
• Japan’s wholesale inflation touched a record 9.0 % in November, owing to pricing pressures caused by supply constraints and rising raw material costs.
• RBI Governor Shaktikanta Das announced that the MPC has opted to keep the inflation forecast at 5.3 per cent in FY21-FY22. The central bank maintained its cautious stance on growth, and with no major changes in headline inflation, it confirms the perception that it is watchful, rather than paranoid, about inflation.
• Dow futures rose about 3% as investors were less concerned over the new Covid omicron type.
• The foreign institutional investors (FII) sold equities worth Rs 92,020 mn, while domestic institutional investors (DIIs) bought equities worth Rs 72,136 mn.

Things to watch out for next week

• This week’s market action will be dominated by the US Federal Reserve’s meeting on December 15th, data on the novel covid variant omicron, and November inflation data.
• All eyes will be on the Federal Open Market Committee meeting. This committee is expected to consider stopping the bond-buying programme and raising interest rates, according to consensus. The interest rate decisions of the European Central Bank, the Bank of England, the Swiss National Bank, and the Bank of Japan will also be widely observed.

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 (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.”

Technical talks

NIFTY opened the week on 8th November at 18,040 and closed on 12th November at 18,103. It made a weekly gain of 0.3%. The index is trading above its 20DMA of 18,080 which might act as a support. On the upside 50DMA of 18,211 might act as a resistance. The RSI (56), and MACD turning downward suggests a further possible decline. 

Among the sectoral indices, IT (+2.1%), REALTY (+1.7%), and ENERGY (+1.3%) led the gainers. MEDIA(-0.1%) and PSU BANK(-0.1%) were the only sectoral losers.

Weekly highlights

• Three public sector oil firms will install 22,000 electric vehicle (EV) charging stations over the next 3-5 years to support the nation’s target to reduce its carbon intensity and reach net zero emissions by 2070. Indian Oil Corporation (IOC) will set up EV charging facilities at 10,000 fuel outlets over the next three years, Bharat Petroleum Corporation Ltd (BPCL) will set up 7,000 stations over the next five years while Hindustan Petroleum Corporation Ltd (HPCL) plans to setup 5,000 stations.
• Zomato plans to invest $1 bn over the next two years, with a large portion of it to be invested in for quick-commerce. The company plans to invest $50 mn in CureFit, plans to acquire 8% stake in logistics tech firm Shiprocket for about $75 mn, and a 16% stake in Magicpin for $50 mn.
• The Reserve Bank of India (RBI) announced the launch of its first global hackathon ‘HARBINGER 2021 – Innovation for Transformation’ with the theme ‘Smarter Digital Payments’. The hackathon will invite participants to identify and develop solutions that have the potential to make digital payments accessible to the under-served, enhance the ease of payments and user experience, and strengthen the security of digital payments and promote customer protection, RBI said in a statement.
• Indian indices declined due to the risk of rising US inflation. The US inflation data showed that the Consumer Price Index (CPI) had risen to a 6.2%  annual rate in October, the highest since 1990. 
• Vodafone Idea (VI) is working on a restructuring plan under which Kumar Mangalam Birla will make an investment and the Indian Banks will restructure the company’s loans. With the freed-up capital for the next four years due to the moratorium, the company will participate in the auction of the 5G spectrum.
• FII (Foreign Institutional Investors) were net sellers and DII (Domestic Institutional Investors) were net buyers this week. There was a net outflow of Rs 49,024 mn from the FII while DII invested Rs 53,932 mn.

Things to watch out for next week

• As investors around the world seem to be cautious about the rising inflation and a possible earlier-than-estimated rise in interest rates by Fed, we may see a further sell-off in Indian stocks next week by the FIIs.

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 1^st November at 17,783 and closed on 3^rdNovember at 17,829. It made a weekly gain of ~0.25%. Nifty is trading at an RSI of 51 with support at 17,613 and resistance at 17,846.

Among the sectoral indices, REALTY (+9.9%), PSU BANK (+4.5%), and MEDIA (+4.0%) led the gainers. There were no sectoral losers this week.

Weekly highlights

• US markets continued their upward trend S&P 500 rose ~1.8% and Nasdaq also gained ~2.8% this week.
• The US Labor market got back on track in October to beat the estimates and broad-based payroll gains show greater progress filling millions of vacancies as the effect of declining in delta variant.
• Reserve Bank of India announced a revised prompt corrective actions framework for banks which will be effective from 1^st of Jan 2022. Capital adequacy, asset quality, and leverage will be important parameters for the monitoring banks under the new frameworks.
• The government of India reduced the Central Excise Duty on Petrol and Diesel by Rs 5 and Rs 10respectively. The Government said the reduction in excise duty will help boost consumption and keep inflation low.
• US Democrats passed USD 1 trillion infrastructure bill. Administration oversees the biggest upgradation of America’s roads, railways, and other transportation infrastructure.
• NITI Aayog and World Bank are working together to facilitate a program for faster and easier financing of electric vehicles. The interest rates on Electric Two Wheelers and Electric Three Wheelers is expected to come down to 10% to 12%. According to experts there is afaster adoption of EVs amid a rise in fuel prices and consumers also choosing cleaner and greener mobility.
• The foreign institutional investors (FII) continued selling Indian equities and sold shares worth Rs 3,580 mn. Domestic institutional investors (DIIs) became buyers this week and bought equities worth Rs 3,060 mn.

Things to watch out for next week

• Results season continues in India with companies such as Britannia, MRF, M&M, ZEE, Coal India, and ONGC are set to announce earnings.

• Trade data and more 3Q company earnings will show whether supply chain glitches are decreased or not.
• Investors’ optimism might be seen next week on the back of the government’s move to cut Excise duty on Petrol and Diesel.

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.”