Markets for the Week : 1st August - 5th August

 WELCOME TO THE WEEKLY BLOG ON INDIAN EQUITIES MARKETS

Important Weekly Closes:

PARTICULARS	WEEKLY CLOSE	% CHANGE
Sensex	57570.25	+2.67%
Nifty50	17158.25	+2.62%
Bank Nifty	37491.40	+2.05%
Gold	51426.00	+1.54%
Silver%	58370.00	+5.88%
Crude Oil	98.62 Usd/Bl	+4.14%
USDINR	79.33	-0.61%

The Markets witnessed the best month in the last few on account of the following major factors:

• No Negative news from Russia / Ukraine War
• The rate hike fears have been factored in.
• A recent survey by Bloomberg suggested that there is 0% probability of India entering into recession across all global economies.
• Positive commentary by FED Chairman post the recent rate hike.

Snapshot of some important results declared during the course of this week:

In times when companies have seen a hit on their Margins the following is the list of companies with basic fundamental filters which have declared decent growth on Margins and Profits.

Nifty50 

• As mentioned in the previous blog 16800-16850 was an important resistance for Nifty. The Nifty broke this resistance after positive commentary from FED post the interest rate hike on Thursday 28.07.2022. 
• Subsequently, the Nifty50 witnessed a 500+ points rally cumulatively on Thursday and Friday.
• Now, The Next very important level to watch for Nifty50 would be between 17380-17475. 
• A correction upto 16900-17100 from these levels can be expected during the course of next 2 weeks.

Bank Nifty

• As stated in the earlier blogs, Bank Nifty was positive since the second week of July 2022.
• Overall the Bank Nifty has rallied by +12.17% for the month of July 2022.
• HDFC Bank, still remains the most underperformed stock and still has a potential for decent upside from here.
• All the other Private Sector Banks and SBIN has shown good returns over the past 1 month and have been the movers for Bank Nifty.
• Majority of Banks have declared decent / stable quarterly results.
• For now the daily close on the Bank Nifty is not very encouraging however the weekly and the monthly close are very positive.
• Important level to watch for Bank Nifty would be between 37850-38025.
• Bank Nifty can see some retracement from these levels during the course of next 2 weeks

Nifty Auto

• Auto was the only index that was stated to be positive in the last 2 months.
• Accordingly the index has rallied by +7.20% for the month of July 2022.
• Mahindra has done a record breaking bookings for Scorpio-N of approx. 18000 crores in 1 hour of bookings opening and that is a very important catalyst for the stock price, keep a watch on the same.
• The monthly auto sales data are due tomorrow and mostly it will be encouraging for Maruti, Tata and Mahindra considering the demand being witnessed.
• Auto companies have declared mixed results on account of supply chain issues, rising commodity prices, chip shortages however the sales in volumes have been encouraging.
• The auto Index now faces a strong resistance at 12700 and one can expect a breakout only above these levels. 
• Unless it decisively breaks the All Time High on Index, the index won’t rally further.

Nifty FMCG

• No fresh triggers, except that Ukraine-Russia agreed on opening the Export corridor, which is beneficial for FMCG input costs
• The recent drop in Crude Oil Prices and Price hikes on Food Products is keeping the sector stable.
• ITC has been a clear outperformer in the entire sector and was also stated in the previous blog.
• ITC and HUL have seen a considerable run-up in their prices, focus should now move to other FMCG stocks.
• For this week there are 2 stocks to be kept on radar from the FMCG pack : Nestle Industries (the stock looks good till it holds 19200) and Tata Consumer (the stock looks good above 825).

Nifty Metals

• The Index looks overstretched and should be avoided for this week, as compared to other sectors.

Nifty IT

• Stock rotation may be overserved in this sector.
• Preferred stocks in this sector may include : Wipro, LTI and TechM.
• The regular constituents are expected to see some resistance.
• Nifty IT has seen good short covering from its oversold zone on the charts. The recent rally in NASDAQ (US IT stocks) have been a positive factor for the already oversold Nifty IT index.

Notes :

• The markets have factored in Major Negative macro's of War, Inflation, Interest Rate Hikes.
• Expect the Market to remain positive for the first half of the current week.
• Some retracement from the above mentioned levels is expected.
• Technically some of Nifty50 stocks have started approaching the Overbought Zone.
• A healthy is market is one when the stocks retrace from the Overbought and Oversold Zones within a reasonable period. Sustenance of the prices in extreme territories bring in sharp rise / declines in prices.

DISCLAIMER : THE ABOVE VIEWS ARE EXPRESSED ON BASIS OF BROAD MARKET NEWS. THERE ARE NO SPECIFIC RECOMMENDATIONS TO BUY SELL OR HOLD. KINDLY CONSULT YOUR FINANCIAL ADVISOR BEFORE INVESTING INTO STOCK MARKETS. INVESTMENT INTO EQUITY MARKETS ARE SUBJECT TO RISKS.