#WeekInANutshell

                                                                              Technical Talks

NIFTY opened the week on 10^th May at 14,928 and closed on 14^th May at 14,678. It made a weekly loss of 2%. The index is trading above its 100DMA of 14,576 which might act as a support. On the upside 50DMA of 14,724 might act as a resistance. The index might trade range-bound before making a strong move on either side.                                                 

                                                                                Weekly highlights

• Moody’s Investor services reduced its FY22E economic growth forecast for India to 9.3% from 13.7% estimated earlier. Investment banks like credit Suisse have also lowered India’s real GDP forecast as mentioned in the previous note.
• US drugmaker Eli Lilly and Co has issued royalty-free, non-exclusive voluntary licenses to produce its Baricitnib drug to Cipla, Lupin, and Sun Pharma. The drug is used with a combination of Remdesivir for the treatment of Covid-19. This will ensure improvement in the local treatment options available to the infected patients in India.
• The Federation of Automobile Dealers Association (FADA) expects sales to return to their peak levels of March 2019 only by FY23E. FADA said registrations of new vehicles, including cars, SUVs, motorbikes, and trucks, for April 21 were 28% lower than March 21.
• During this week, Oil prices were lifted by fears of a gasoline (petrol) shortage after a cyber-attack caused an outage at the largest US fuel pipeline system. The fuel pipeline in the U.S. restarted now, but it will take several days for the supply chain to return to normal.
• The foreign institutional investors (FII) Sold Rs 36,199 mn worth Indian equity shares last week. Domestic institutional investors (DII) were also net sellers during this week with Rs 1,817mn of outflow.

                                                             Things to watch out for this week

• The 4QFY21 result season will continue in the next week as well. The commentary from companies’ management will be key to access the medium/long-term outlook on markets. The current situation is dynamic and changing very rapidly.

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 (May 3rd to May 7th)
Technical talks
NIFTY opened the week on 3rd May at 14,481 and closed on 7th May at 14,823, a weekly gain of 2%. The index is trading above its 50DMA of 14,730 which might act as a support. The short-term moving average (10 DMA) is turning up which suggests a possible rally going ahead. The RSI (55), and MACD turning upwards also indicates a positive momentum.
Weekly highlights
• The week opened on a positive note as investors cheered a strong dose of positive earnings reports as well as economic data that showed the US economy is growing. But the rally was short lived as coronavirus-induced lockdown worries weighed on investor sentiment on Tuesday.
• Reserve Bank of India (RBI) Governor Shaktikanta Das provided additional liquidity to banks for lending to vaccine makers, hospitals and providers of health services, as well as easing rules for small businesses to restructure loans which led to a rally in Pharma sector.
• The Dow Jones Industrial Average closed at a record high on Thursday, bolstered by an upbeat weekly jobless claims report, while vaccine makers dipped after US President Joe Biden backed plans to waive patents on COVID-19 shots.
• Credit Suisse has sharply lowered its real GDP growth forecast for FY22 to around 8.5-9 percent, citing economic disruptions in the country due to the raging second wave that is likely to shave 100-150 bps growth off the economy.
• April PMI data indicated a marked and unprecedented expansion in business activity across the U.S. service sector. Supporting the upturn in output was the fastest increase in new business on record. Pressure on capacity remained evident, as backlogs of work accumulated at a faster pace and employment rose at the second-sharpest rate on record. Some concerns regarding the sustainability of new order inflows weighed slightly on business confidence, although optimism remained relatively strong.
• FII (Foreign Institutional Investors) selling and DII (Domestic Institutional Investors) buying trend continued this week as well. There was a net outflow of Rs 50,920 mn from the FII kitty while DII invested Rs 21,340 mn.
Things to watch out for next week
• The 4QFY21 result season continues in the next week as well. The Commentary from biggies such as Asian Paints and Tata Power will be critical. Managements’ comments over the business impact of second wave of Covid-19 will be important. Please note that NSE will be closed on Thursday 13th May.

Technical Talks

 NIFTY opened the week on 22nd March at 14,736 and closed on 26th March at 14,507, it made a weekly loss of 1.5%. The index is trading below its 10DMA of 14,680, which might act as a resistance. On the downside, 100DMA of 14,053 might act as a support. The short-term moving average is cutting longer-term moving from above which might lead to further correction in the index.                                                           

Weekly highlights

• Loan moratorium case: The Supreme Court directed that no compound or penal interest shall be charged from borrowers for the six-month loan moratorium period, which was announced last year amid the COVID19 pandemic. The amount already charged shall be refunded, credited, or adjusted. The apex court refused to interfere with the Centre’s and Reserve Bank of India’s (RBI’s) decision to not extend the loan moratorium beyond August 31 last year. Banks can start declaring their bad loans (loans which have not been repaid for 90 days or more), with the Supreme Court vacating the relief granted earlier not to declare the accounts of borrowers as NPA.
• SEBI on AT-1 Bonds: The Securities and Exchange Board of India (SEBI) amended the norms for valuing perpetual bonds. Now the maturity would be 10 years until March 31, 2022, and would be increased to 20 and 30 years over the subsequent 6-month period. From April 2023 onwards, the residual maturity of AT1 bonds will be 100 years from the date of issuance of the bond. As per estimates, banks have issued AT1 and tier 2 bonds worth ₹ 3.5 tn. A fifth of these bonds are held by Mutual funds. This move by SEBI provides much-needed relief to the MF industry. (Source- Business Standard edition 23 March 21)
• Oil: A container ship blocking the Suez Canal created a new setback for global trade as officials stopped all ships entering the channel. A ship ran aground in the Suez Canal is blocking transit in both directions through one of the world’s busiest shipping channels for oil and grain and other trade linking Asia and Europe. Officials suggest it might take weeks to clear the blockage, which will impact ~30 percent of the world’s shipping container volume daily and ~12 percent of the total global trade of all goods. Oil prices jumped about 6 percent on Wednesday after this incident.
• The Insolvency and Bankruptcy Code (IBC) suspension which ended on Wednesday, March 24 has not been extended by the Government. This is a welcome move by the banking sector as it will help reduce the burden of Non-Performing Assets (NPAs) on their balance sheets.
• The institutions swapped their strategy from the last week, with FIIs outflow for the week totaling Rs 67,013 mn. The DIIs turned net buyers to the tune of Rs 50,181 mn.

                        Things to watch out

• The Auto Companies will be reporting their monthly volume data for March. The non-availability of chips may impact sales this month. A Business Standard report suggested an average delay of ~6months for Maruti Suzuki’s Ertiga CNG variant delivery and 1.5-2 months for all other models. The delay could be as long as 8-10 months for Mahindra & Mahindra’s All-New Thar and 1.5-2 months for its Scorpio, and Bolero. This suggests that despite the demand, Companies are facing problems with supplying sufficient stocks due to the global semiconductor shortage.

This week in a nutshell (March 15th to March 19th)

Technical talks

• NIFTY opened the week starting 15th  March at 15,048 and closed on 19th March at 14,744, declining 2% in the 5 trading sessions. 
• The index broke its support of 50 DMA on Thursday and rebounded back to almost the same level on Friday. Now 50 DMA at 14,748 will be the crucial resistance level to watch out for. On the downside, the index may find support at 100 DMA of 13,909. 

Weekly highlights

• This week, FII buying intensity increased as they pumped in Rs 58,929 mn in the Indian equity market. DIIs turned net sellers with Rs 30,366 mn net outflow from equities.
• The Consumer Price Index (CPI) inflation for the month of February came in at 5.03% against 4.06% in January 2021. An increase in inflation reduces the scope for a further repo rate cut by the Monetary Policy Committee. Repo rate cuts are a monetary measure of boosting economic growth.
• India’s trade data for the month of February was released this week. Exports saw a YoY growth of 0.7% to USD 27.9 bn, while imports saw a YoY jump of 7.0% to USD 40.5 bn. The trade deficit for February 2021 was USD 12.6 bn vs USD 10.2 bn for the same month last year.
• For the month of January 2021, the Index of Industrial Production (IIP) declined 1.6%. YoY decline in IIP suggests that the economy is still not entirely out of the shadow of covid-19 issues.
• GOI announced its much-anticipated vehicle scrappage policy this week. Under this policy, Commercial Vehicles (CVs) aged 20+ years and Passenger Vehicles (PVs) aged 15+ years will be de-registered in absence of a fitness certificate. The policy also includes incentives to vehicle owners for scrapping old vehicles including scrap value, road tax rebate, discount on new vehicles, and waiver of registration fees for new vehicles. This policy is expected to boost auto demand in an environment where auto sales have been suffering for the past several quarters.
• The US Fed reiterated its stance on keeping the interest rates near zero in the next few years. This announcement acted as a reassurance to the market that the US central bank will continue to remain pro-growth.

Things to watch out for next week

• The yearlong suspension of the Insolvency and Bankruptcy Board of India (IBC) is coming to an end on 25th March 2021. The suspension was implemented to protect the corporate debtors from defaulting due to the Covid-19 impact. If there is no further extension of the suspension, it will open up an important avenue for creditors to resolve bad assets.

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 March at 15,002 and closed on 12th March at 15,031. As expected the index traded in a range with no clear trend. The index is trading above its 20DMA of 15,015, which might act as a support. On the upside, the recent all-time of 15,432 might act as resistance. The index might trade in the range of the above-mentioned levels before making a strong move on either side.

Weekly highlights

• Markets continued to rise for the first three days of the week before falling off to end the holiday-shortened week on a flat note. IT (2.6%) and Bank (0.6%) led the indices higher while Realty (-2.3%), Auto (-1.3%) and Bank (-1.2%) ended the week with most losses.
• India’s life insurance sector registered a strong new business premium (NBP) growth of 21% in February, bucking its recent trend where it registered either tepid growth or a decline since November. The latest data from the Insurance & Regulatory Development Authority of India (IRDAI) indicated that the NBP, which is a key metric to gauge the performance of life insurers grew to Rs 224 bn in February for India’s 24 life insurers, compared with Rs 185 bn a year ago. 
• The US markets hit a new closing high as investors cheered on the passage of the $1.9 trillion American Rescue Plan. President Biden signed the bill and the IRS will begin sending payments out as soon as 14th March. 
• Brent crude futures jumped above $70 a barrel during the week for the first time since the COVID-19 pandemic began; while WTI crude touched its highest in more than two years, following reports of attacks on Saudi Arabian oil facilities. The front-month WTI price touched $67.86 a barrel earlier, the highest since October 2018.
• The government, which owns 54% in BEML, invited expressions of interest for the stake sale in the defense equipment maker, along with the transfer of management control. At least six companies, including Tata Motors, Mahindra and Mahindra, and Ashok Leyland, are looking to buy a 26% stake in BEML Ltd. 
• Wholesale dispatches from auto OEMs reported mixed volume performance in February 2021. Dispatches of passenger vehicles (PV) increased by 17.9% YoY in February 2021, according to the data released by SIAM (Society of Indian Automobile Manufacturers) on 10th March 2021. This is the seventh time in a row that PV wholesale dispatches were positive. Total sales in the two-wheelers segment witnessed a YoY growth of 10.2%. 
• The trend in FII flows continued as they pumped in Rs 11280 mn while DIIs turned net buyers with Rs 12,390 mn purchases during the week.

Things to watch out

• The Wholesale Price Index (WPI) inflation and Manufacturing data along with Export-Import data for the month of February are expected to be released in the next week.