week in a nutshell | Assetmultiplier

22 Jan

Week in a Nutshell January 16th-20th

Technical talks

NIFTY opened the week on 16^th January at 18,119 and closed on 20^th January at 17,849 above the 20-week simple moving average. The index closed at 17,853 after making a high of 18,183. We expect the recent high of 18,183 to be the key resistance level and the 20 WMA of 17,907 to be the key support level.

During the week, Media (-4.3%), PSU BANK (-1.2%), and AUTO (-1.0%) were the top losers while sectoral gainers were IT (+2.1%), PSE (+1.9%), and ENERGY (+1.1%).

Weekly highlights

The Bank of Japan raised its 10-year yield cap to 0.5% from 0.25% during its policy meeting on Tuesday.
Retail sales in the United States fell 1.1% in December, following a 1% drop in November, highlighting how inflation and rising interest rates slowed consumer activity. PPI (producers price index) fell more than expected in December due to concerns about a slowdown in the US economy. Weekly jobless claims in the United States fell to a four-month low, indicating that the Federal Reserve will maintain its monetary tightening policy.
Companies such as Reliance, HDFC Bank, HUL, and Asian Paints reported 3QFY23 earnings this week. Consumer companies have stated that inflation has slowed since its peak, resulting in increased gross margins. HUL’s license agreement with Unilever expires on January 31, 2023, and the board has approved the contract renewal with a royalty fee increase from 2.65% of total turnover to 3.45% staggered over 5 years is expected to act as an overhang on the margins of the company. PSU banks were in the spotlight after the Bank of India and the Bank of Maharashtra announced strong quarterly results.
West Texas Intermediate and Brent Crude sustained its price of around $82 and $88 per barrel this week, up by almost 2.5% and 2% respectively.
Microsoft laid off 10,000 workers, accounting for less than 5% of its workforce, in order to cut costs. The Nasdaq and S&P 500 indexes remained relatively stable during the week.
The World Economic Forum 2023 got underway in Davos, Switzerland. Wall Street executives, business heads and senior employees, and political leaders gathered to discuss the impact of high inflation and high-interest rates imposed by central banks to combat it. The threat of a recession has caused some large corporations to reduce their spending. The European Central Bank’s president, Christine Lagarde, indicated that the bank would continue to raise interest rates this year, amid an improved economic outlook and historically tight labor market. According to FBI Director Christopher Wray, new technologies such as autonomous vehicles and artificial intelligence are creating new opportunities and new security risks. Other topics will include the cost of living, a labor market, natural disasters, and extreme weather events, the global recession in 2023, the resurgence of COVID infections in many countries, an energy shortage, and the Russia-Ukraine war.
During the week, Foreign Institutional Investors (FIIs) sold shares worth ₹ 24,610 mn and Domestic Institutional Investors (DIIs) bought shares worth ₹ 33,840 mn.

Things to watch out for next week

As many large cap companies report 3QFY23 results, investors will scrutinise the management commentary. Next week, large-cap banks like ICICI Bank, Kotak Mahindra Bank, and Axis Bank, as well as auto OEMs like TVS Motors, Bajaj Auto, Maruti, and Tata Motors, report earnings.
The 3QFY23 earnings season is expected to set market sentiment. Investors will be interested in hearing management comments on the domestic economic recovery and the trajectory of future earnings growth.
Investors will remain cautious until the Union Budget for FY24 is announced on February 1st. The market’s volatility will be exacerbated by expectations and speculation about budgetary announcements.

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 Rujuta Tamhankar #WeekInANutshell demand, Equity markets, week in a nutshell 0 Comments Read more...

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.

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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.

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13 Jun

This Week in a nutshell (06-10 June)

Technical talks

NIFTY opened the week on 06^th June at 16,531 and closed on 10^th June at 16,202. During the week, NIFTY was down 2.3%. The index has breached the 50-week moving average on the weekly chart with RSI at 43. The immediate support for the index stands at 15,845 and resistance at 16,793.

Financial Services (-3.0%), IT (-2.6%), and Media (-2.4%) were the top losers, and PSU (+1.0), and Auto (+1.0%) were the only sectoral gainers during the week.

Weekly highlights

US inflation accelerated to a fresh 40-year high in May, a sign that price pressures are becoming entrenched in the economy. That will likely push the Federal Reserve to extend an aggressive series of interest-rate hikes. The consumer price index increased 8.6% YoY resulting in all 3 broad-based US Indices ending in the red by 3%.
Despite a dip on Thursday, benchmark crude oil rates were near their 13-week highs. Brent and West Texas Intermediate futures traded above $120 a barrel each. High crude prices hurt markets such as India, which meets much of its oil demand through imports. Brent closed at $121/barrel.
Official data released last month showed India’s official GDP growth reading hit a four-quarter low of 1 percent on a year-on-year basis in the January-March period. Economic growth for the full year ended March 2022 came in at 8.7 percent due to a low base of the previous year, though lower than the statistics office’s estimate of 8.9 percent.
RBI Governor Shaktikanta Das on Wednesday announced the unanimous decision of the Monetary Policy Committee (MPC) to hike the repo rate — the key interest rate at which the central bank lends money to banks — by 50 basis points to 4.9 percent. The RBI MPC also decided to remain focused on withdrawing its ‘accommodative’ stance to ensure inflation stays within target levels while supporting growth.
The RBI MPC raised its forecast for retail inflation — gauged by the Consumer Price Index — by 100 basis points to 6.7 percent. The RBI Governor acknowledged that inflation has accelerated to a faster-than-estimated pace in April and May. It is expected to be higher than 6 percent by December 2022, mainly due to elevated food prices.
American employers added 390,000 jobs last month, the government reported Friday, a sign of a slowdown in hiring but still a better-than-expected result amid a shortage of workers. The jobless rate held steady at 3.6 percent for the third consecutive month, just a tenth of a point above the pre-pandemic level in February 2020, the Labor Department said.
A report showing stronger hiring last month than expected is good news for the US Economy amid worries about a possible recession. But many investors saw it keeping the Federal Reserve on its path to hiking interest rates aggressively, thereby causing weakness in US Equities, The US Federal Reserve is on track for half-point interest rate increases in June, and July, and last week’s jobs report boosted expectations of continued tightening by the US central bank.
Shanghai and Beijing are placed on new COVID-19 alerts. The cities imposed further lockdown restrictions on Thursday and announced a fresh round of mass testing for millions of their residents. India too reported a total of 7,584 new coronavirus infections on Friday, prompting health authorities to a high alert on a possible resurgence of a 4^thWave
Foreign institutional investors (FIIs) continued to be sellers, selling equities worth Rs 126,629 Domestic institutional investors (DIIs) continued to be buyers and bought equities worth Rs 96,100 mn.

Things to watch out for next week

Volatility is expected to remain high as rising global inflation forces investors to reconsider their expectations for strong earnings growth. Fears of a further rise in Interest rates by Central Banks across the world, geopolitical concerns, and oil price volatility will keep investors on edge.
With the inflation data released, investors are looking forward to Fed’s intended 50 bps interest rate hike in the next meeting. The United States housing market updates for May are expected next week. Consumer Price Index (CPI) inflation data will be released for key economies, indicating whether global inflation rates have peaked.
With Q4 earnings out of the way, stock-specific actions will be limited as indices would track macro developments and geopolitical developments.

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21 Feb

This Week in a Nutshell (14-18 Feb)

Technical talks

NIFTY opened the week on 14 th February at 17,076 and ended at 17,276 on 18 th February. NIFTY gained 1.2% throughout the week after a gap-down opening. The next support and resistance levels for the index would be 17,185 and 17,315 respectively.
Except for IT (+0.3%), all the sectoral indices fell this week, with PSUBANK (-4.7%), REALTY (-2.8%), and MEDIA (-2.6%) being the biggest losers.

Weekly highlights

Indian equity markets remained volatile throughout the week due to rising inflation worries, the anticipation of Interest Rate hikes, and Geopolitical tensions between Ukraine and Russia.
The uncertainty around the Russia-Ukraine situation at the start of the week was enough to deal another blow to global markets that were already skittish about high inflation and the prospect of aggressive U.S. Federal Reserve interest rate hikes to tame it. Markets have been rattled by a rates outlook that could hold as many as seven Federal Reserve increases in the year ahead. St. Louis Fed president James Bullard on Thursday reiterated his call for the Fed funds rate to be raised to 1 percent by July to combat stubbornly high inflation.
Oil prices remained majorly volatile throughout the week as oil reached a 7 year high of $95/Barrel due to rising concerns over Russian oil supply on the back of impending invasion of Ukraine but cooled off as Russia actions were not considered as threatening during the start of the week, Oil was also dragged down by a possibility of an Iran Nuclear Deal, that could add Iranian Oil supply to the world.
The Life Insurance Corporation of India filed its IPO papers with the SEBI on Sunday. As per the DRHP, LIC's offer is entirely an offer for sale of 316,249,885 by the shareholder valued at $8 Billion, by the Government of India. This means the government would sell a 5 percent stake via the IPO. The much-awaited IPO of LIC is India’s biggest share sale of all time.
Retail inflation rose to 6.01 percent in January on an annual basis and breached the RBI’s upper tolerance level, mainly due to higher prices of certain food items, as per government data released on Monday. The Consumer Price Index (CPI) based retail inflation was 5.66 percent in December 2021 and 4.06 percent in January 2021.
IT services giant Tata Consultancy Services (TCS) on Sunday said the members of the company have approved the buyback of shares worth up to ₹18,000 crores by passing a special resolution through postal ballot.
The foreign institutional investors (FII) continued to be sellers and sold equities worth Rs 10,885 mn while Domestic institutional investors (DIIs) continued to be buyers and bought equities worth Rs 10,163 mn.

Things to watch out for next week

Investors will be busy with increased volatility amidst Russia-Ukraine Standoff and the geopolitical tensions as a result of that.
US Markets will be jittery as the end date of the US Fed’s Asset Purchase scheme in March draws near, persistent inflation and any indication regarding rate hikes will be closely monitored.
Equity markets in India are likely to see decreased volumes due to increased volatility and decreased participation in anticipation of Insurance Behemoth LIC’s $8 Billion IPO next month.

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03 Jan

This Week in a Nutshell (27-31 Dec)

Technical talks

NIFTY opened the week on 27^th December at 17,004 and ended the week on 31^st December at 17,354. The index made a weekly gain of 2.1%. On the upside, 17,400 could act as resistance while 17,166 could act as a support. RSI (14) of 53 and a positive divergence on MACD (26,12) indicates further upside in the index.

Among the indices, MEDIA was the only sector that ended the week with a loss of -1.0%. HEALTHCARE (5.5%), PHARMA (5.4%), and CONSUMER DURABLES (4.4%) led the gainers.

Weekly highlights

The US indices closed the curtailed week in the red, affected by low volumes due to the festive season and increasing worries of the Omicron variant of the COVID-19 virus. These factors combined with muted institutional activity and retail buying led the Indian markets higher, as Indian equities bounced back from last week’s losses Nifty50 ended ~2% higher.
The Central Government earned Rs 1.29 tn in gross Goods and Services Tax (GST) revenue for December. The Ministry of Finance said the average monthly gross GST collection for the third quarter of the ongoing fiscal was higher than the average monthly collection of Rs 1.10 lakh crore and Rs 1.15 lakh crore, recorded in the first and second quarters respectively.
India’s current account slipped into a deficit of $9.6 billion, or 1.3 percent of the gross domestic product (GDP) in the second quarter of the ongoing fiscal, the Reserve Bank of India reported. For the reporting quarter, the deficit was mainly due to the widening of the trade deficit to $44.4 billion from $30.7 billion in the preceding quarter, and an increase in net outgo of investment income.
The Central Board of Indirect Taxes and Customs (CBIC) stated that the GST rate on any worth of clothes will be 12% beginning next year. Currently, a 5% tax on sales up to Rs 1000 per piece is charged. Further, the GST rates on some synthetic fibres and yarn have been reduced from 18 to 12%, putting rates in line with the rest of the textiles sector, this was done to address anomalies caused by an inverted duty structure, which occurs when the tax rate on inputs is greater than the tax on the finished product.
Reserve Bank of India’s (RBI) financial stability report suggests stress for banks would rise in 2022, especially in the retail and MSME segment, but banks most are well-capitalized to deal with it. The report showed while bad loans may rise, they won’t hit double digits by September 2022. In the worst-case scenario, gross NPAs may rise to 9.5 percent due to all the benefits of moratoriums expiring, we might see short-term stress in the provisioning.
Fears over the impact of the Omicron variant of the COVID-19 virus resulted in Oil remaining volatile throughout the week. With the number of cases doubling, several countries have announced restrictions, there’s an anticipation of demand reduction and Brent Crude ended the week lower at $77.8 per barrel.
Foreign Institutional Investors (FII) continued to be net sellers this week, selling shares worth Rs 35,070 mn. Domestic Institutional Investors (DII) continued to be buyers and invested Rs 31,300 mn in Indian equities this week. The month of December ended with net FII outflows of Rs 4,55,790 Mn and net DII Inflows of Rs 4,02,490 Mn.

Things to watch out for next week

Rising cases of the Omicron variant of COVID-19 will be on investors’ minds this week. It’ll be interesting to see how India and other Emerging Markets respond to the anticipation of lockdown-like restrictions.
The U.S. Jobs non-farms payrolls report comes out Friday. Expectations are for growth of 400,000 jobs, vs. 210K last month and an average of 494K jobs added in the last six months. The key thing to watch out for would be the commentary of voluntary unemployment as the labour participation rate continues to fall post-pandemic.
The Organization of the Petroleum Exporting Countries (OPEC) meets on 04^th At their previous meeting, OPEC reaffirmed their decision to increase oil production in 2022 and said that they expected a low impact from Omicron on demand for oil. With various industries reporting inflationary headwinds due to oil prices increasing, a lot of eyes will be waiting to see how OPEC responds to demands of output increase amid Omicron fears.
The Indian equity market is likely to see more selling pressure next week amid the concern over the spread of omicron variant and FIIs returning after a week of muted action due to the holiday season. Action is likely to be broad index specific until Q3FY22 result season beginning 12^th

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25 Dec

This week in a nutshell (20th-24th December)

Technical talks

NIFTY opened the week on 20th December at 16,824 and closed on 24th December at 17,004. It gained 1.1% during the week. The index is trading below its 10DMA of 17,057 which might act as a resistance. On the downside, the 16,971 level might act as a support. The RSI (44), and MACD turning downward suggests a possible decline.

Weekly highlights

The US indices closed the week in green as investors speculated that the spreading Covid Omicron variant may not adversely affect human health, businesses and lockdown-like situations might not arise, and hence the stock buying picked up. S&P 500 was up by 2.3%, Nasdaq 100 by 3.2%, and Dow Jones by 1.7%.
The Turkish currency lira tumbled to a record low after its President Recep Tayyip Erdogan pledged to continue cutting interest rates, referring to the Islamic ban of high-interest rates as a basis of his policy. The president feels that Turkey can free itself from reliance on foreign capital flows by abandoning policies that prioritized higher interest rates and strong inflows.
The Indian government reduced the import tax on refined palm oil to 12.5%, from earlier 17.5%, in an effort to cool near-record high vegetable oil prices. This would make refined palm oil more attractive than crude palm oil for Indian buyers.
Sebi suspended futures and options trading for one year in chana, mustard seed, crude palm oil, moong, paddy (basmati), wheat and soybean and its derivatives. This has not only led to a fall in prices of these commodities, but also to scaling back of inventories by traders, who say the flow of imports will slow down since they do not have a hedging platform.
Zee Entertainment Enterprises (Zee) and Sony Pictures Networks India (SPNI) signed a definitive agreement that will let the two merge their networks, digital assets, production operations and programme libraries. The merged entity will have a 27% market share of the general entertainment space. After the completion of the deal, Sony Sony Pictures Entertainment will hold a 50.86% stake in the combined entity, the promoters of Zee will hold a 3.99% stake and the remaining shareholders of Zee will hold a 45.15% in the merged entity.
Tata Motors has incorporated Tata Passenger Electric Mobility Limited (TPEML), a wholly-owned subsidiary that is involved in the manufacturing of electric motor vehicles, with an initial capital of Rs 7000 mn.
FII (Foreign Institutional Investors) were net sellers of shares worth Rs 65890 mn and DII (Domestic Institutional Investors) were net buyers of shares worth Rs 69156 mn this week.

Things to watch out for next week

As investors around the world seem to be cautious about the Fed’s announcement of three 25 bps increase in interest rates in CY 2022, we may see a further sell-off in Indian stocks next week by the FIIs.We may see a reduction in the level of activity as most investors in the US and Europe are away on holidays.

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21 Nov

This Week in a Nutshell (15th – 18th November)

Technical talks

NIFTY opened the week on 15^th November at 18,141 and ended the truncated week on 18^th November at 17,765. The index made a weekly loss of 2.1%. On the upside, 17,993 could act as resistance while 100DMA of 17,020 could act as a support. RSI (14) of 44 indicates the index is nearing the oversold zone.

Among the indices, AUTO was the only sector that ended the week with gains of 0.4%. METAL (-5.3%), PSU BANK (-3.4%), and REALTY (-3.3%) led the laggards.

Weekly highlights

Raring agency Fitch Ratings affirmed India’s long-term foreign currency Issuer Default Rating (IDR) at ‘BBB’- with a negative outlook. The negative outlook reflects lingering uncertainty around the debt trajectory. The Agency has suggested wider fiscal deficits and government plans for only a gradual narrowing of the deficit, putting a greater onus on India’s ability to return to high levels of economic growth over the medium term to stabilize and bring down the debt ratio.
S&P Global Ratings has predicted that the Indian economy will likely grow at 11 percent in FY22 but flagged the ‘substantial’ impact of broader lockdowns on the economy. S&P said the control of Covid-19 remains a key risk for the economy.
The Nasdaq Composite Index closed above 16,000 points for the first time, while the Dow Jones Industrial Average had a second successive weekly loss (-1.4%). The S&P 500 ended higher following strong retail earnings and positive signs for holiday shopping.
Over 4.4mn Americans left their jobs in September-21, according to the Labor Department’s Job Openings and Labor Turnover Survey. Incentivized by wage gains and other attractive terms offered by employers desperate for talent, several Americans are leaving their jobs. This has made it challenging for employers to fill positions while driving up compensation and inflation.
Crude oil prices fell to a six-week low following news of Australia’s lockdowns and surging Covid-19 cases in Europe threatened to slow down the economic recovery. Investors weighed a potential release of crude oil reserves by major economies for a fall in prices. Crude Oil futures settled at USD 75.7 a barrel while Brent Oil futures closed at USD 78.5 a barrel.
India’s wholesale price inflation (WPI) jumped to a five-month high at 12.5% in October. This month’s WPI broke the 5-month downward trend as prices of manufactured items and fuel have increased. High petrol, diesel, and cooking prices drove fuel inflation to 37.2%. high prices of basic metals, textiles, plastics, and edible oil drove inflation for manufactured items to 12%.
Prime Minister Narendra Modi announced that the three farm acts would be repealed in the upcoming session of the Parliament. The Prime Minister said a committee would be set up to make the minimum support price mechanism more transparent and effective.
Foreign Institutional Investors (FII) continued to be net sellers this week, selling shares worth Rs 44,109 mn. Domestic Institutional Investors (DII) continued to be buyers and invested Rs 39,265mn in Indian equities this week.

Things to watch out for next week

US markets are waiting for President Biden to nominate who will head the central bank after Jerome Powell’s term finishes in February-2022. The US markets have a truncated week next week as markets will remain shut on Thursday and Friday on account of Thanksgiving.
The Indian equity market is likely to see more selling pressure next week amid the rising US dollar, and the beginning of the Fed Reserve’s bond-buying program. Results for September-21 have been announced by most companies. Action is likely to be stock-specific till the end of December.

By Maitreyee Vaishampayan #WeekInANutshell Equity markets, investing, week in a nutshell 0 Comments Read more...

09 Oct

This week in a nutshell (4th – 8th October)

Technical talks

NIFTY opened the week on 4th October at 17,616 and closed on 8th October at 17,895. It made a weekly gain of ~1.6%. On the upside, 17,948 might act as a resistance. On the downside, 20DMA of 17,648 might act as a support. RSI (14 days) of 66 is indicating the index is in an overbought zone.

Weekly highlights

Auto companies released the monthly volume data for September-21. Domestic CV volumes were robust, aided by healthy freight availability and better freight rates. Tractor sales reported a strong MoM growth albeit on a low base due to good rainfall. Supply issues and an inauspicious period led to subdued volumes for other segments. Companies suggest an inability to cater to demand due to supply chain challenges. This has led to lower inventory build-up before the festive season. This might lead to longer waiting periods or postponement of festival purchases by customers.
Media reports suggest the government may abandon its demand for spectrum charges of Rs 400 bn from telecom operators to support companies. This latest move may provide another ray of hope to companies such as Vodafone Idea Ltd and Bharti Airtel Ltd after the government’s decision to offer a 4-year moratorium on dues.
The Organisation of the Petroleum Exporting Countries, Russia, and their allies (OPEC+) said it would stick to its existing plan for a gradual increase in oil output, which sent crude prices to three-year highs. West Texas Intermediate reached USD$ 78 a barrel while Brent Crude rose 3% to ~US$ 82 a barrel. The OPEC+ ignored calls from big consumers such as the USA and India for extra supplies after oil prices surged over 50% this year.
The US indices (Dow Jones Industrial Average, S&P 500, and Nasdaq) held on to weekly gains. Throughout the week, investors’ attention has been on rising energy prices, concerns about inflation, and negotiations on the debt ceiling. On Thursday, the US Senate has voted to extend the debt ceiling until December 3. This provides some relief to investors worried about the government default this month.
The Indian equity markets remained volatile during the week ended October 8. The key positives were RBI maintaining its stance with no rate change, and Moody’s upgrading India’s outlook to stable from negative. Rising bond yield, and crude oil prices, Fitch cutting India’s FY22 GDP growth forecast (to 8.7% from 10% in June) worried investors.
The government of India has sold the national carrier, Air India to the Tata Group. Tata Sons submitted a winning bid of Rs 180bn as the Enterprise value. The conclusion of this sale indicates the government is serious about its ambitions of privatisation.
Though the foreign institutional investors (FII) selling continued this week, the quantum was much lower at Rs 36,857mn vs Rs 61,520mn last week. Domestic institutional investors (DII) buying reduced to Rs 34,581mn from the Rs 75,030 mn in the previous week.

Things to watch out for next week

The 2QFY22 result season has started with TCS reporting earnings this week. The result season takes centre stage next week with other IT companies such as Infosys, Mindtree, and Wipro set to announce their earnings. While the street is estimating sequential revenue growth for the companies, commentary on deal wins and margin pressures due to rising employee costs & attrition would be critical.

By Maitreyee Vaishampayan #WeekInANutshell Equity markets, US markets, week in a nutshell 0 Comments Read more...

04 Oct

This Week in a nutshell (27th Sept to 01st Oct)

Technical talks

NIFTY opened the week on 27th September at 17,932 and closed on 01st October at 17,532 during the week, the index lost -2.23%. Nifty is trading at an RSI of 58, with support at 17336 and resistance at 18,138.

Weekly highlights

US President Joe Biden on Thursday signed a nine-week stopgap funding bill that averts a government shutdown but fails to resolve the threat of a US default linked to the debt limit.
US Treasury Secretary Janet Yellen has said that if lawmakers fail to raise the debt limit by about Oct. 18, the government may not be able to pay its bills, posing a dire risk to the US and World Economy with the US Treasury defaulting on its debt obligations.
Japan’s former foreign minister Fumio Kishida is set to replace Yoshihide Suga as prime minister after he won the ruling Liberal Democratic Party’s leadership vote on Wednesday. Kishida will succeed Prime Minister Suga, the world’s eyes will be on the third-largest economy in the world which is facing stagnant economic growth battered by the coronavirus pandemic, the remnants of an unprecedented public health crisis, and increased political manoeuvring by China.
Brent Crude is at its highest since October 2018 and heading for $80 per barrel, as investors fretted about tighter supplies because of rising demand in parts of the world. Brent crude was up $1.44, or 1.8%, to settle at $79.53 a barrel, having posted three straight weeks of gains. Global supplies have tightened due to the fast recovery of fuel demand from the outbreak of the Delta variant of the coronavirus and Hurricane Ida’s hit on U.S. production
China’s top state-owned energy companies have been ordered to ensure there are adequate fuel supplies for the approaching winter at all costs, a report said Friday, as the country battles a power crisis that threatens to hit growth in the world’s number two economy. The country has been hit by widespread power cuts that have closed or partially closed factories, hitting production and global supply chains. The crisis has been caused by a confluence of factors including rising overseas demand as economies reopen, record coal prices, state electricity price controls and tough emissions targets.
The country’s top carmaker Maruti Suzuki said that it will produce fewer cars in October due to the ongoing global chip crisis. It expects vehicle production at two of its plants to be around 60 per cent of normal levels. The chip shortage has emerged as a major crisis around the world since 2020 after a sharp rise in demand for consumer electronics and continued global supply chain disruptions.
During the week, the foreign institutional investors (FII) net sold equities worth Rs 61,520 mn, while domestic institutional investors (DIIs) bought equities worth Rs 75,030 mn.

Things to watch out for next week

Q2FY22 Result season to begin with software services leader TCS announcing its results.
Rising Oil Prices, US Treasury Yields, Evergrande’s default, and the uncertainty over the U.S default of its debt obligations will be the themes that are in focus this week.

By Pratik Mate #WeekInANutshell week in a nutshell 0 Comments Read more...

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