Nifty up for two straight weeks. What’s Next?
| Index | Close | Change | % Chg |
| NIFTY 50 | 16352 | 86 | +0.53% |
| NIFTY BANK | 35613 | 1337 | +3.90% |
“Invest in Peace, Bro,”
Prolonged war has affected the day-to-day life of millions worldwide. The rising inflation because of supply bottlenecks has severely affected the average person. Invest in peace, now.
The longer the war continues, the more irrational results will come. Further, more curbs, hikes, export-ban, and exemptions would become the new norm.
Effect of conflict
The Russia-Ukraine conflict has not only affected fuel, energy and metal prices but also affected the food gain prices. Both the countries account for a quarter of the worldwide wheat exports. Therefore, the food grain supply shortage is a genuine worry.
Supply shortages because of war and inflation because of supply shortages. As a result, fiscal and monetary punches to tame inflation. Isn’t the growth missed in this spiral of war-shortages-inflation? And everyone is indirectly at war because of this spiral.
The Law of Action-Reaction
To tame inflation, because of supply shortages and which is because of war, the government announced a cut in excise duties on petrol and diesel, increased subsidy on LPG -Ujjwala scheme and levied export duty on certain steel products.
Further, the government has allowed the duty-free import of soybean and sunflower oil. It has also put restrictions on sugar exports. However, the ban on wheat exports is already in place. Similarly, there are rumours of a ban on cotton and rice exports.
The US Fed and RBI also raised the interest rates, and the market expects more rate hikes during the financial year. Every action has a reaction; in equal magnitude and opposite direction.
Why Invest in Peace?
Any artificial measures, be it a subsidy, duty reduction, import or export curbs or intervention to manage inflation, liquidity, interest rates or exchange rate, have inherent limitations and are not a long-term solution to the underlying issues.
Fiscal and monetary measures will eventually have a positive effect. However, these do not necessarily and immediately result in a bottom-line gain. Stable prices are required, but not at the cost of growth.
How long can you fight inflation with limited ammunition? Now is the time to invest in peace and the war must stop.
Market – Hoping for peace time
The Nifty closed at 16352, up about 86 points or 0.52 per cent during the week. Most of the weekly gains are from Friday market action. Further, it closed in the green for the second week in a row. Similarly, the Bank Nifty was also up by 1337 points or 3.90 per cent during the week.
Even though the market was up during the week, structurally, nothing major changed during the week. The concerns of last week remain as is, which are:
- Geopolitical- Russia Ukraine War
- Rising Inflation
- US Fed and RBI tightening policy
- Rising Interest Rates
- FII selling from Emerging Markets
FIIs and Volatility
The FIIs were net sellers during the week. The DIIs were the net buyers and provided support to the market. Meanwhile, the volatility index India Vix closed at 21.48, softened by 1.62 points or 6.92 per cent week over week. Further, the volatility index is down for two straight weeks.
Nifty Market breadth
The market breadth was mixed, was in favour of declining shares for the first three trading sessions and then turned in favour of the advancing shares. The weekly advance-declined ratio was 0.71.
Top Gainers of the Week
| Company | Close | Change | % Chg |
| HDFCLIFE | 598 | 53 | 9.72% |
| KOTAKBANK | 1946 | 117 | 6.40% |
| HDFC | 2330 | 128 | 5.81% |
| M&M | 953 | 49 | 5.42% |
| HDFCBANK | 1392 | 71 | 5.37% |
The other notable gainers of the week were Hero motors up +5.02 per cent, Maruti up +4.69 per cent, SBI Life up +4.67 per cent, Nestle up +4.62 per cent, and ICICI Bank up + 4.23 per cent.
The shares of Maruti gained 6.83 per cent in the previous week and continued the momentum by achieving a 4.69 per cent gain during the week.
Top Losers of the Week
| Company | Close | Change | % Chg |
| DIVISLAB | 3515 | -790 | -18.35% |
| JSWSTEEL | 548 | -83 | -13.15% |
| ONGC | 144 | -18 | -11.11% |
| TATASTEEL | 1044 | -127 | -10.85% |
| ASIANPAINT | 2835 | -275 | -8.84% |
The shares of Divis’ Labs and JSW Steel also touched 52-week low during the week. Similar to the weakness in Asian paint’s share price, Berger paints and Indigo paints also hit a 52-week low during the week.
The other notable losers of the week were Adani Ports down -8.46 per cent, UPL down -6.31 per cent, Grasim down -6.12 per cent, Hindalco down -4.66 per cent, and ITC down -3.93 per cent.
The Adani Ports was in the top gainer list of the previous week, with a +8.78 per cent gain. Similarly, Hindalco was also on the gainer list of the earlier week, with a +10.57 per cent gain.
View the list of all the Nifty 50 contributors.
Nifty Sectors and Broader Indices
NIFTY SECTORS – WEEKLY ACTION
IT -0.51%
FMCG -0.79%
Pharma -3.03%
Oil and Gas -3.48%
Metal -8.67%
Auto +3.26%
Midcap 50 +0.03%
Smallcap 50 -3.35%
Looking forward to invest in peace
The Nifty has made triple tops in the last seven months and failed to surpass the previous highs. In the short term, it looks like the market is in a trading range of 15800 to 16800.
Nifty Weekly Pivots
| S2 | S1 | R1 | R2 |
| 15713 | 16033 | 16544 | 16735 |
As per the above pivots data, 16050-16550 is the Nifty 50 trading range for the next week. The support is around the 15850 level. If the market breaks this level, such a break can drag the Nifty down to 15450 or below levels in the short term. And on the upside, we might see selling around 16400 -16500 level. Refer to the above chart, 16400-16600 is the immediate resistance level.
View the Pivot Calculator.
Read our earlier blogs here.
China Bull In Nifty Shop
Has the Global Downturn started?
How the rising interest rates will affect you?
What’s Next?
The Nifty closing price is now above 20-day moving average, though it is still below the 50-day moving average and the 200-day moving average. And the 50-day moving average price is below the 200-day moving average price.
The bias is positive going into the upcoming week as the Nifty closing price is above the 20-day moving average and volatility is down for two straight weeks. Further, the Nifty formed a bullish hammer candle for the two consecutive days during the week. Likewise, it also made a higher high (16415) and a higher low (15904) during the week.
Stick to your plan and avoid tips and rumours. Invest in your goals peacefully.
This article is only for educational purposes and is not an investment advice. Please consult with your investment advisor before investing.
