· In the coming week investors will be watching a spate of economic data, including US retail sales numbers on Wednesday, for more clues on whether the Fed's monetary policy tightening is cooling the economy. On the domestic front, Indian Retail Inflation data (CPI) will be announced on Monday which will be important for the market while most of the quarterly results have almost announced.
· Expects rally to continue in the domestic equity on optimism that cooler-than-expected US inflation will lead to smaller rate hike by the US Federal Reserve and on China’s move to loosen its Covid Zero policies. On the domestic front, USDINR fell sharply to close 2-month low at below 81 indicated aggressive FIIs buying interest (FIIIs net buyers nearly Rs7k this week). Moreover, strong macro data - October PMI reported 6-month high to above 55, 4-month high September IIP data, stable oil price, impressive quarterly results and strong GST collection, will be positive for the market sentiment. Expect beaten down metal (China to relax zero covid policy stance) and IT stocks (global IT Major Index Nasdaq gained 7% this week) will be big positive for next week
· The domestic market joined the global run as markets across the world cheered the lower-than-expected US inflation data and this was one of the best week in the stock market history. Indian bourses ended on record supported by strong domestic macro data and blessing by US inflation data which has fallen to significantly lower than estimated level along with core inflation number.
· Global market witnessed biggest gains (between 3-8% and S&P 500 close to 4000 mark psychological level) in over two years after the US Inflation for October has come in at 7.7% (expectation at 7.9%) against previous month was at 8.2%. Core Inflation fell to 6.3% while expectation was 6.5%. US Dow Jones climbed up over 1300 points or 3.5% and Nasdaq Composite skyrocket by 7% against the previous week close. A slowdown in US inflation could mean the Federal Reserve won’t have to be so aggressive about raising interest rates. Market expect that the US Fed to raise rates again next month but by a smaller margin of one-half percentage point after a series of 0.75 percentage-point increases. US 10-Year (3.80% from 4.2%) and 2-year bond yield declined by 10% on a single day while Dollar Index fell to 4-month low to below low to below 106.
Weekly Update (Week on Week)
· A sharp recovery in the rupee and unabated foreign capital inflows further bolstered sentiment. Sensex zoomed 845 points or 1.40% to settle at 61,795 -- surpassing its previous closing peak of 61,765 hit on October 18, 2021. Likewise, the broader Nifty rallied 233 points or 1.3% cent to finish at 18,350. This week, there was rally in PSU Bank, IT and Metal stocks.
· Banking stocks witnessing major gainers this week led by HDFC twins and PSU Bank. Nifty PSU Bank Index soared by 6% after announced strong Q2 results. PSU Bank Index surged by 28% just one month. Nifty Metal Index gained by 2% on expectation of improve demand after China announced to partially remove covid lock down and US Dollar Index fell to 3-month low. Nifty IT Index advance 2% due to attractive valuation and Global IT Major Index Nasdaq Composite spiked by 7%. However, Nifty Pharma Index slipped 3% due to poor quarterly results announcement. Nifty Auto Index slipped by 2% after auto major Tata Motor reported lower than expected Q2 results
Short Term Buy
· Cochin Shipyard, National Aluminium, Adani Ports, HDFC, Bank of India, SAIL, Tata Steel, Zomato, BoB, LTTS, Coforge
Long Term Buy
· Axis Bank, Hindalco, LIC India, Infosys, TCS, SBI, Zee Entertainment, Reliance Industries, HAL, Patanjali Foods, Indian Hotel
Technical Levels
· Nifty index has formed a Bullish candle on daily and weekly frame and has been forming higher lows from the last six weeks. Now, it has to hold above 18300 zones, for an up move towards 18500 then 18600 zones whereas supports are placed at 18188 and 18088 zones.
· Bank Nifty has formed a Doji candle on daily frame and a Bullish candle on weekly frame. Now it has to hold above 41840 zones for an up move towards 42500 and 42750 zones whereas supports are placed at 41750 and 41500 zones.
Global Market Update
· US, Europe and Asian markets gained between 3-8% this week. The tech-heavy Nasdaq Composite rose 8% this week to notch its biggest weekly gain since March on optimism that a slower-than-expected US inflation print will lead to smaller rate hikes by US Fed. Moreover, expectation that the China to relax zero covid policy stance will be back in global demand. US Inflation for October has come in at 7.7% (expectation at 7.9%) against previous month was at 8.2%. Core Inflation fell to 6.3% while expectation was 6.5%. Cooler-than-expected US inflation data set the stage for a slowdown in aggressive interest-rate hikes resulted US 10-Year and 2-year bond yield corrected 10% from the peak and Dollar Index fell to 3-month low.
Commodity
· Gold surged 5% to 3-month high at $1771/ounce following tweaks to China’s Covid-19 rules, the US inflation print, and weakness in the dollar, and events next week will shape whether gains hold or wither.
· Brent Crude advance 2% to $96/bbl following China's announcement that it would relax some of its hardline Covid-19 restrictions, including shortening its quarantine requirements for international travelers by two days. Market expectation global demand will improve after China announced to partially lifted covid lockdown.
FIIs and DIIs
· FIIs were net buyers Rs6330cr
· DIIs were net sellers Rs2255cr
Results
· Monday – Aarti Industries, Abbott India, Bharat Forge, Biocon, CESC, FDC, Grasim, GM Infra (Airport), Greaves Cotton, HUDCO, Indiabull Housing, IRCTC, IOL Chemical, Kaveri Seed, KNR Construction, LUX Industries, Mazda, Munjal Auto, Mishra Dhatu, NMDC, NBCC, ONGC, Parag Milk, SpiceJet, Sobha, Star Cement, Stovec, Uttam Sugar
· Tuesday – Rajesh Exports
Corporate Action
· Monday – PFC Dividend Rs5, EPL Rs2.15, Compuage Infocom Right issue 8:25 at a premium Rs18
· Tuesday – Aegis Logistic Dividend Rs2, P&G Rs15, Coal India Rs15, Amaraja Batteries Rs2.90
· Wednesday - Motherson Aumi Wiring Bonus 2:5, Computer Age Manage Rs8.50
· Thursday – Dhanuka Agritech Share Buy-Back, PDC Dividend Rs2.50, Oriental Carbon Rs7.
Global Data
· US – Tuesday – Empire Manufacturing, Food, Manufacturing and commodities. Wednesday – MBA Mortgage Application, Retail sales data, Industrial Production Data, NAHB Housing Data. Thursday – Housing Starts, Initial Jobless Data. Friday – Existing Home sales Data
· Europe – Monday - House Price Data, Economy Survey (UK), Economy Survey (Germany), Economy Survey (France). Tuesday – Whole Price Index (Germany), CPI, Unemployment Rate (France), Payroll, Employment Rate, Jobless Claims (UK). Wednesday – CPI, Retail Sales (UK). Friday – Retail sales, Consumer Confidence (UK)
· China – Tuesday - Industrial Production, Industrial Production. Wednesday – New Home Sales
· India – Monday – WPI, CPI, Exports & Import.
