#WeekInANutshell

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.”

Technical talks

NIFTY opened the week on 20th September at 17,444 and closed on 24th September at 17,853. During the week, the index gaining 2.3% and touched a record high of 17,948 during the market hours on 24th September. Nifty is trading at an RSI of 78, with support at 10 DMA of 17565 and resistance at 18,095.

Weekly highlights

• Evergrande, China’s second-biggest property developer, has US$83.5 million in dollar-bond interest payments due on a US$2 billion offshore bond and a US$47.5 million dollar-bond interest payment due next week. Both bonds would default if Evergrande fails to settle the interest within 30 days of the scheduled payment dates. Chinese authorities are asking local governments to prepare for the potential downfall of the debt-ridden China Evergrande Group.
• Federal Reserve Chairman Jerome Powell said the U.S. central bank could begin scaling back asset purchases in November 2021 and complete the process by mid-2022, after officials revealed a growing inclination to raise interest rates next year.
• The Organisation for Economic Co-operation and Development (OECD) has marginally lowered India’s growth projection for the ongoing fiscal to 9.7%, a reduction of 20 basis points (bps), and to 7.9% for the next financial year, down 30 bps from its May-21 forecast, citing pandemic risks.
• India is planning to set up around 14 gigawatt-hour (GWh) grid-scale battery storage system at the world’s largest renewable energy park at Khavda in Gujarat. This is in addition to a plan to invite bids for the largest global tender for setting up a 13GWh grid-scale battery storage system in Ladakh.
• On 22nd Sept, the Tamil Nadu government signed a Memorandum of Understanding (MoU) for 24 projects worth ₹ 21.2 bn. M K Stalin, chief minister of Tamil Nadu said the government’s goal is to increase the state’s exports to USD 100 bn by 2030.
• Tata and Airbus have signed a Rs 220 bn deal for the production of 56 C-295 transport aircraft for the air force. Under the deal, 40 of the 56 planes will be manufactured in India by a consortium of the Airbus Defence and Space and Tata Advanced Systems Limited (TASL) within 10 years of signing the contract, officials said.
• India is considering an overhaul of its electricity transmission planning to give power companies nationwide unconditional access to the network. The government also proposes to allow states to trade their excess transmission capacities with other states, a senior government official said.
• The foreign institutional investors (FII) net sold equities worth Rs 84 mn, while domestic institutional investors (DIIs) bought equities worth Rs 30,483 mn.

Things to watch out for next week

• The stock markets around the globe may remain volatile next week as the investors remain worried that Evergrande’s downfall could affect the creditors such as banks in China and abroad.
• News of the US Federal Reserve starting to withdraw the monetary stimulus by Nov ’21 and a start of rising interest rates could prove to be negative factors for the markets as it will increase the cost of borrowing for the corporates.

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.”

This week in a nutshell (August 30^th to September 3^rd)

Technical talks

NIFTY opened the week on 30^th August at 16,776 and closed on 3^rd September at 17,324. It made a weekly gain of 3.3%. The index is trading beyond all moving averages and at all-time high levels. 10DMA of 16,880 is the closest support. The RSI (83) suggests that the index is overbought.

Weekly highlights

• Trends for FII and DII activity reversed compared to last week. FIIs were net buyers of Indian equities with an inflow of Rs 68,677 mn. DIIs turned bearish with a net outflow of Rs 14,211 mn.
• As per data released by Ministry of Statistics and Programme Implementation, India’s GDP growth for 1QFY22 is estimated to be 20.1%. This growth is on low base of 1QFY21, where the GDP contraction was 24.4% YoY.
• Ministry of Commerce and Industry released India’s preliminary foreign trade data for Aug-21. According to the press release, India’s merchandise exports for Aug-21 increased 45.2% over low base of Aug-20 and 27.5% over Aug-19. Merchandise imports for Aug-21 increased 51.5% over Aug-20 and 17.9% over Aug-19. The trade deficit widened at USD 13.87 bn in Aug-21 compared to USD 8.2 bn in Aug-20.
• Indian Auto OEMs reported wholesale data for Aug-21. Carmakers were impacted by the global electronic component shortage, leading to production uncertainties. OEMs expect the pain to continue even in the upcoming crucial festive period. Some companies expect Sep-21 production volumes to be lower by as much as 60% of normal levels.
• US jobs data for August came out on Friday and the numbers were lower than street forecasts. Lower job additions could mean that the US Fed may further delay any increase in interest rates.

Things to watch out for next week

• Post the end of 1QFY22 result season, we are in a quiet period with relatively lesser market developments.

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 16th August at 16,518 and closed on 20th August at 16,450. It made a weekly loss of 0.5%. The index is trading near the 10 DMA of 16,414 which might act as a support. On the upside 16,701 level might act as a resistance. The RSI (65), and MACD turning downwards suggests a further possible decline.

Weekly highlights

• Tens of thousands of people have tried to flee Afghanistan since the Taliban militants entered into its capital Kabul, on Sunday, completing a defeat of government forces and ending two decades of war. On Thursday, the United States struggled to evacuate the Americans and Afghans at Kabul airport due to obstacles like armed Taliban checkpoints and paperwork problems. With a deadline of 31st August declared by the president of America, Joe Biden, thousands of people remain to be airlifted from the chaotic country.
• PM Narendra Modi on 15th Aug announced a $ 1.35 trillion ‘Gatishakti’ initiative to bring employment opportunities for the youth and to help in infrastructure growth. He said that Gatishakti will help local manufacturers turn globally competitive and develop possibilities of new economic zones.
• The RBI has partially lifted restrictions that it had imposed on HDFC Bank last December, allowing it to resume issuing credit cards. However, restrictions on new digital launches remain. Despite the ban, HDFC Bank remains the largest credit card issuer, with 14.8 million cards outstanding at the end of June, followed by SBI Card with 12 million and ICICI Bank with 11.03 million. (Source: Mint)
• Federal Reserve officials made plans to pull back the pace of their monthly bond purchases likely before the end of the year, meeting minutes released on Wednesday indicated. The committee members broadly agreed that employment has not met the “substantial further progress” benchmark the Fed has set before it would consider raising rates.
• Ola launched its first e-scooter with the Ola S1 series in India on 15th August 2021. The electric scooter was launched in two variants – Ola S1 and Ola S1 Pro. The company is officially opening Ola S1 for purchase from 8th September 2021 and will start delivering across 1,000 cities and towns in October this year. 
• FII (Foreign Institutional Investors) were net sellers and DII (Domestic Institutional Investors) were net buyers this week. There was a net outflow of Rs 43,144 mn from the FII while DII invested Rs 1,224 mn.

Things to watch out for next week

• As the world cautiously looks at the further developments in the Taliban-controlled Afghanistan, it may have a significant effect on the stock markets.
• US employment data and the various economies getting back on track after the 2nd covid wave will be among the deciding factors that drive the stock 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 9^th Aug at 16,223 and closed on 13^th Aug at 16,529. This is the highest closing ever for the index. The index made a weekly gain of 1.8%. On the upside, the index might be headed to 17,110. The 16,590 and 16,700 levels will act as potential resistance points, while supports will come in at 16,300 and 16,210.

Weekly highlights

• The market was volatile at the start of the week due to weak global cues however, the bulls managed to push the benchmark indices well in the green.
• BSE announcing the rule regarding Add-on Price Band Framework caused selling pressures in mid and small cap stocks which were down 1% and 2% respectively this week.
• The country’s exports rose by 50.5 percent during August 1-7, on account of healthy growth in the shipments of engineering goods, gems and jewellery as well as petroleum products, according to provisional commerce ministry data. Imports during the week too grew by about 70 percent, leaving a trade deficit of USD 3 bn.
• Consumer Price Index-Based inflation (CPI) for July came in at 5.59 percent, back within the Monetary Policy Committee’s inflation targeting range of 4 (+/-2) percent, on the back of softening food prices. The Consumer Food Price Inflation (CFPI) for July cooled to 3.96 percent compared with 5.15 percent in June.
• Finance Minister Nirmala Sitharaman said that the government is committed to the revival of the economy and will continue to undertake various steps to boost growth.
• The market closed with Nifty posting a net gain of 291 points (1.8%), on a weekly basis mainly contributed by IT sector which is up 4.4% this week. Whereas, Pharma, PSU Banks and Auto sector underperformed.
• US markets were weak at the beginning as a tumble in oil prices signalled investor unease about the Covid-19 pandemic and the strength of the economic recovery. However, the rising US Treasury bills uplifted the sentiments of the investors.
• Fed at the start of the week said that the U.S. economy is growing rapidly and that while the labor market still has room for improvement, inflation is already at a level that could satisfy one leg of a key test for the beginning of interest rate hikes.
• USD 1 tn infrastructure bill was passed during the week which could provide the nation’s biggest investment in decades in roads, bridges, airports and waterways.
• The US markets closed at all time high as investors warmed to jobs data showing a steady U.S. economic recovery.
• According to economists polled by Reuters, Fed will announce a plan to taper its asset purchases in Sept-21 and the U.S. jobless rate would remain above its pre-pandemic level for at least a year.
• Oil prices fell for a second day on Friday after the International Energy Agency warned that demand growth for crude and its products had slowed sharply as surging cases of COVID-19 worldwide has forced governments to revive restrictions on movement.
• The foreign institutional investors (FII) bought Rs 8,790 mn worth of Indian equity shares last week. Domestic institutional investors (DII) undertook Rs 6,370 mn of net buying during this week.

Things to watch out for next week

• The monthly U.S. retail sales report and earnings from retailers such as Walmart and Target could shed more light on the health of the U.S. consumer. Investors are also keeping a close eye on Treasury yields, with rising yields often viewed as a sign of economic optimism that could also boost value stocks.
• Indian Markets – With 1QFY22 result season almost over, focus will be on the global cues, vaccination progress in India, IPO listings and FII buying that will steer market next 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.”