#WeekInANutshell

Technical talks

NIFTY opened the week on 21st March at 17,329 and ended at 17,153 on 25^th March. Amid the geopolitical tensions and oil prices volatility, the Indian benchmark index closed in the red with a weekly loss of 1%. The next support and resistance levels for the index would be 17,024 and 17,442 respectively.

Among the sectoral indices, MEDIA (+7%), METAL (+5%), and OIL & GAS (+3%) were the gainers during the week. CONSUMER DURABLES (-5%), FMCG (-3.4%), and FINANCIAL SERVICES (-3%) led the losers.

Weekly highlights

• The S&P 500 and Dow Jones ended higher on Friday and Nasdaq closed marginally lower. Financial shares rose on Friday and boosted S&P 500 as the US treasury yield jumped to near its 3 years high. Investors will watch how the Federal Reserve will tighten its policy after Fed Chair Jerome Powell this week said the central bank needs to move quickly to combat high inflation.
• Oil prices recovered from early losses and ended higher on Friday after the two consecutive weekly losses as the missile attack hit Saudi Aramco’s storage facility and Saudi Arabia warned the crude supplies are at risk. Brent Crude and West Texas Intermediate finished the week at USD 119 and 113 a barrel up 10% and 8% for the week respectively.
• In India, petrol prices continue to increase. The oil companies hiked the price by 80 paise per liter on Saturday, this is the fourth hike in the last five days. Oil companies started the series of price hikes from 22 March and petrol price increased by Rs 3.20 per liter till date from 22 March. Since 4^th November 2021 prices had been frozen. These will lead to inflationary pressure on Indian consumers as well as organizations.
• India’s exports exceeded USD 400bn in 2021-22, added ~USD 110bn through the year with a 37% increase on an annual basis. Engineering goods, petroleum products, gems, and jewelry witnessed an increase in the share of exports. Even electronics goods and agricultural commodities saw an uptick in exports.
• United Nations downgraded India’s projected economic growth for 2022 from 6.7% to 4.6%. India in particular will face restraints on several fronts like energy access and prices, primary commodity restrictions, food inflation, tightening policies, and financial instability.
• The foreign institutional investors (FII) continued to be sellers and sold equities worth Rs 53,450mn while Domestic institutional investors (DIIs) continued to be buyers and bought equities worth Rs 40,250mn.

Things to watch out for next week

• Investors enter the last week of FY22. This typically sees tax-loss harvesting and NAV management by institutional investors. We expect to see increased volatility in mid and small-cap companies till the end of March. From 1^st April, quarterly and annual volume and the business update will likely be driving the market. Investors will be focused on Indian Auto companies’ volumes data for March-22.

• Indian equity markets remain volatile next week amidst rising geopolitical tensions between Russia and Ukraine, a series of petrol price hikes, pressure on crude oil prices due to a missile attack on Saudi Aramco’s storage facility.

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 7th March at 15,867 and ended at 16,630 on 11th March. NIFTY regained 2.4% throughout the week. The next support and resistance levels for the index would be 16,800 and 16,400 respectively.

All the sectoral indices gained this week, with Media  (+6.7%), Pharma (+6.3%), and IT (+3.4%) being the gainers.

Weekly highlights

• Early in the week, Wall Street indices plummeted as oil prices soared to their highest levels since 2008, above $130 per barrel, owing to the ongoing conflict between Russia and Ukraine. Asian stocks followed the lead of their Wall Street counterparts.
• The threat of a US and European ban on Russian products, as well as a delay in Iranian talks, triggered a massive stagflationary shock for international markets on Monday, sending oil prices soaring by more than 10%.

• Global oil prices fell on Wednesday by the most in nearly two years after OPEC member the United Arab Emirates said it supported pumping more oil into a market roiled by supply disruptions due to sanctions on Russia. Brent and Crude WTI closed at USD 112.67 /barrel, USD 109.33/barrel respectively.
• Indian Insurance monthly data for February 2022 was released during the week, the industry’s new business premium rose 27% over the previous month to Rs 27,465 crore in February 2022, 22% higher on a YoY basis.

• The International Monetary Fund indicated that the war in Ukraine has sent a wave of more than 1 mn refugees to neighboring countries while triggering unprecedented sanctions on Russia. The US banned Russian oil imports while Britain would slowly phase out the imports.
• The domestic market also witnessed a heavy sell-off early in the week however, the mood was reversed as the results of the state election turned positive for the market, and oil prices started cooling off.

• US consumer prices surged in February 2022, culminating in the largest annual increase in 40 years, and inflation is poised to accelerate further in the months ahead as Russia’s war against Ukraine drives up the costs of crude oil and other commodities.

• Japanese household spending rose for the first time in six months in January on a year-on-year basis, largely because of weakness in the prior year, even as the fast spread of the COVID-19 Omicron variant likely weighed on consumption later in the month.
• The foreign institutional investors (FII) continued to be sellers and sold equities worth Rs 246,884 mn. Domestic institutional investors (DIIs) continued to be buyers and bought equities worth Rs 177,291 mn.

Things to watch out for next week

• The markets will react to the FOMC meeting and the interest rate decision slated to come during this week.
• By March 15^th, companies are expected to file their advance tax that would signal the expected earnings of the listed companies in upcoming quarters.
• The market will focus on the reduction of commodity prices and diplomatic development between Russia & Ukraine.
• The market will also focus on inflation data to be released in India & the US, and the US Fed meeting is scheduled for 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.”

Technical talks

NIFTY opened the week on 21^st Feb at 17,192 and closed on 25^th Feb at 16,658. During the week, NIFTY was down 3.58%. At the current juncture, on the weekly chart, the index has breached the 20-weekly moving average while the RSI is at 45. Going ahead, For the bulls, 16,800-17,065 would be the immediate hurdle and the recovery may continue as long as 16,550 is held decisively.

Nifty Media (-7.7%), PSU Banks (-5.7%) and Auto (-4.6%) were the top losers and there were no gainers.

Weekly highlights

• US stock index futures tumbled on Monday after Russian President Vladimir Putin recognized two breakaway regions in eastern Ukraine, increasing concerns about a major war. It continued to be in red as Ukraine declared a state of emergency and the US State Department said a Russian invasion of Ukraine remains potentially imminent.
• After weeks of warnings from Western leaders, Russia unleashed a three-pronged invasion of Ukraine from the north, east and south on Thursday, in the biggest attack on a European state since World War Two that threatened to upend the post-Cold War order on the continent.
• However, US stocks recovered sharply reversal as US President Joe Biden unveiled harsh new sanctions against Russia after Moscow began an all-out invasion of Ukraine. Sanctions announced on Thursday targeted Russia’s banks but left its energy sector largely untouched.
• The Dow on Friday registered its biggest daily percentage gain since Nov-20 with the market rebounding for a second day from the sharp selloff leading up to Russia’s invasion of Ukraine.
• Oil prices fell below USD 100 a barrel, easing some concerns about higher energy costs, and all 11 of the major S&P 500 sectors ended up on Friday.
• Coming to Indian markets, NIFTY tumbled more than 3 percent and extended the losing streak in the third straight week ended February 25 amid escalation of geopolitical tensions between Russia and Ukraine. The market witnessed extreme volatility in the last week amid uncertainty over war-like situation and registered the biggest single day fall on Thursday after Russia invaded Ukraine, however, witnessed a smart pull back on Friday after the US and UK imposed new sanction on Russia.
• Foreign institutional investors (FIIs) sold equities worth of Rs 1,98,435 mn, and domestic institutional investors (DIIs) bought equities worth of Rs 2,15,118 mn.

 Things to watch out for next week

• Volatility to remain high in the coming days as events in Ukraine will dictate the market moves, but that focus eventually will turn back to the Federal Reserve and the outlook for interest rates.
• The Russia’s invasion of Ukraine might have a long-term effect on global growth and inflation as it will push up the commodity prices. With higher commodity and oil prices, companies will have to pass on the higher input prices to the consumers and if not, then margins are going to get hit and will bring down the earnings.

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 7^th February at 17,456 and ended at 17,375 on 11^th February. NIFTY fell 0.5% throughout the week. The next support and resistance levels for the index would be 17,330 and 17,419 respectively.

Except for METAL (+3%), all the sectoral indices fell this week, with REALTY (-2.5%), FMCG (-2.2%), and CONSUMER DURABLES (-2%) being the biggest losers.

Weekly highlights

• Indian equity markets remained volatile at the start of the week ahead of RBI monetary policy and on Friday market ended the three-day winning streak. Markets declined after the US consumer prices data came in higher than expected which rose to a four-decade high.
• On Thursday, the Reserve Bank of India kept the repo and the reverse repo rate and all other key policy rates constant and maintained its accommodative monetary stance amid the pandemic, and continue to provide support to growth. The current repo rate is at 4% and the reverse repo rate is at 3.35%.
• Consumer prices in the US climbed to 7.5% in January on YoY, the sharp YoY increase since February 1982 the data released by Labor Department on Thursday. Ultra-low interest rates, strong consumption expenditure, supply chain concerns, worker scarcity, and federal reserve policy led to accelerating inflation.
• All three major benchmark indices in the US fell on the 2^nd consecutive session after Thursday’s inflation data came higher than expectations, amid bets on aggressive federal reserve tightening policy and rising worries about Ukraine-Russia tensions.
• Oil prices settled at fresh seven-year highs amid rising fears of invasion of Ukraine by Russia and added to concerns over tight global crude supplies. Brent crude futures settled at 3.3% higher on Friday.
• Industrial output in India fell to a 10-month low to 0.4% in December-2021 as per the data released by the statistics department on Friday. It was pulled down by manufacturing, capital goods, and consumer durables output, weak consumption and investment also lead to lower industrial output.
• The tech giants in India have begun the process of getting employees back in the office. As the omicron wave subsides, companies have accepted a hybrid work model and will continue for a longer run.
• On Thursday, the Government of India approved 20 applicants of the PLI scheme for the automobile and auto ancillary industry. The PLI scheme for the industry leads to gaining a share of India in the global automobile space.
• The foreign institutional investors (FII) continued to be sellers and sold equities worth Rs 56,417 mn while Domestic institutional investors (DIIs) continued to be buyers and bought equities worth Rs 49,554 mn.

Things to watch out for next week

• Investors will turn their attention to economic factors as the earning season in India comes to an end in the next week.
• The US Federal Reserve minutes from its meeting along with European GDP data for the 4QFY21 are going to be released next week. Investors will be watching the US producer prices and retail sales for January; these events are likely to drive the market next week.
• Equity markets in India are likely to see more volatility ahead of the Fed meeting minutes and amid concerns over the Ukraine-Russia tensions.

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 31^st January at 17,301 and closed on 4^th February at 17,516. It made a gain of 1.2% during the week. The index is trading below its 100DMA of 17,649 which might act as a resistance. On the downside, the 17,438 level might act as a support. The RSI (48), and MACD turning downward suggests a further possible decline.

Weekly highlights

• The US indices closed the week in green as US state employment data was released which showed a drop in claims for unemployment benefits. During the week, the stocks buying picked up again. S&P 500 was up by 6%, Nasdaq 100 by 1.7%, and Dow Jones by 1.1%.
• Adani Total Gas Ltd (ATGL), the joint venture between Adani Group and Total Energies of France, said that it will invest Rs 200 bn in setting up city gas infrastructure across the country over the next 8 years, with 60 percent of the money being used towards 14 licenses it won recently. With the addition of 14 geographical areas, it won in the latest bid round for city gas distribution (CGD) licences, Adani Total Gas now has a footprint in 95 districts spread across 12 states, catering to more than 9 mn households.
• Bengaluru-based electric vehicle company Ather Energy will set up 1,000 fast charging stations for electric two-wheelers across Karnataka. The company plans to keep charging at these stations to be free of cost for everyone for first 1 or 2 years.
• Meta’s (Facebook’s parent company) stock price fell by 26 percent on 3^rd February after the company issued a weak forecast, citing Apple’s privacy changes and increased competition. The huge drop erased over $200 bn from Meta’s market capitalisation.
• According to the commerce ministry, India’s eight core infrastructure sectors grew by 3.8 % in Dec-21, compared to 3.4 % in Nov-21. Natural gas and Cement were the largest contributors to an increased output in Dec-21 with 19.5% and 12.9% increase respectively.
• The Centre’s fiscal deficit rose to 50.4% of the FY22 target in April-December 2021, with a huge increase seen in tax collections as well as capital expenditure for the month of December 2021, data released by the Controller General of Accounts showed. The Economic Survey for FY22, tabled on 31^st January, said the Centre was well on track to meet its fiscal deficit target of 6.8 % of the Gross Domestic Product (GDP).
• The ADP National Employment report showed that the private payrolls decreased by 301,000 jobs in Jan-22 after increasing by 776,000 in Dec-21. This was the first drop in private payrolls since Dec-20. The initial claims for state unemployment benefits dropped 23,000 to 238,000, suggesting that the slowdown in job growth in January was likely temporary.
• FII (Foreign Institutional Investors) were net sellers of shares worth Rs 76,953 mn and DII (Domestic Institutional Investors) were net buyers of shares worth Rs 59,237 mn in this week.

Things to watch out for next week

• As the budget 2022 announcement is behind us, we expect the budget-related volatility in the stock market to reduce in the next week.
• With the announcement of government’s increased borrowing, and rising inflation, the monetary policy committee (MPC) meeting of RBI will be a key event to watch for the 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.”

Technical talks

NIFTY opened the week on 24^th January at 17,572 and ended at 17,102 on 28^th January. NIFTY fell 2.9% throughout the week, forming a bearish engulfing candle on the weekly chart. The next support and resistance levels for the index would be 16,840 and 17,635 respectively.

Except for PSU BANK (+6.9%), and Bank (+0.3%), all the sectoral indices fell this week, with IT (-6.1%), Realty (-5.2%), and Infra (-2.4%) being the biggest losers.

Weekly highlights

• Financial markets started the week on a volatile note on the back of fears of monetary tightening as the Fed announced that they would start raising interest rates. Nevertheless, volatility intensified with erratic stock movements amid shaky company earnings cast doubt on the strength of the recovery from the COVID-19 pandemic. The US stocks closed the week in the green, S&P up 0.8% and Nasdaq up 0.1%.
• Equity markets in India also witnessed volatility during the week due to the ongoing results season, the Fed meeting, and mixed budget expectations.
• Continual commodity cost rise is creating pressure on margins across the board especially FMCG, consumer, and chemical companies. To sustain margins and maintain topline growth, companies have implemented price increases in conjunction with cost-cutting strategies.
• On 26^th January, US Federal Reserve Chairman Jerome Powell announced that the US job market was robust enough to absorb rate rises and that the current tightening cycle would be different from previous ones. The Federal Reserve is expected to raise interest rates in March-22 and maintain plans to conclude its bond-buying program that month to keep inflation under control.

• Oil prices on 27^th January hit a seven-year high, Brent crude was above $90 a barrel, as the market balanced concerns about tight worldwide supply amid Russia- Ukraine tensions and the expectations that the US Federal Reserve will soon tighten monetary policy. Closing prices of Brent crude futures and WTI crude futures were $89 and $87.3 per barrel respectively as on 29th January 2022.
• The US gross domestic product (GDP) grew at 6.9% higher than the Dow Jones estimate of 5.5%, coming back from a brief but severe coronavirus recession in 2020. It was the best calendar-year growth rate since 1984.
• The Tata group formally took over Air India on January 27th, 67 years after the group founded the airline in 1932.
• The foreign institutional investors (FII) continued to be sellers and sold equities worth Rs 202,640 mn. Domestic institutional investors (DIIs) continued to be buyers and bought equities worth Rs 77,600 mn.

Things to watch out for next week

• Market participants expect the Union Budget would not throw any surprises at investors, sticking to the expected narrative of fiscal restraint and growth as the fiscal deficit is expected to fall below pre-covid levels, and the government’s push for infrastructure capex and privatization. Analysts at Morgan Stanley anticipate the government will focus on gradual fiscal consolidation while driving public capex, fostering a favorable climate for private capex, and generating resources through selective divestments.
• Contrary to international investors, retail customers are entering the Union Budget with net long holdings on the Nifty 50’s February futures of 68,592 contracts.
• Markets will react to earnings reported by consumer companies like Marico and Britannia. Companies such as Tech Mahindra, Dabur, HDFC, Tata Motors, Cadila Healthcare, and Lupin are set to report earnings next week. The management commentary on price erosion in the US market will be key for pharma companies. Comments on raw material inflation and logistical challenges will be key for consumer companies.
• Capital goods, infrastructure, housing, real estate, public sector banks are likely to be in the spotlight ahead of the Budget.

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.”