In the week gone by global markets across the globe continued to remain volatile after hawkish comments from the Federal Reserve amid political unrest between Russia and Ukraine. Also prospects of a steep increase in rates have pushed bond yields higher. This has prompted investors to dump risky assets. Fed rate hike means moving from a scenario of easy and excess liquidity to a scenario of liquidity tightening. Actually global stock markets rallied on liquidity support and low interest rates. As per Fed, it will begin hiking interest rates in the near future and that there will be multiple rate hikes this year. Along with that, the Fed has also stated that it will end the asset purchase program in March and will also look to reduce the size of the Fed Balance Sheet from sometime later this year. However, Investors were comforted by fresh economic data showing U.S. fourth-quarter GDP jumped 6.9% from the year prior. On another data front, Germany’s GfK consumer sentiment index came in at - 6.7 points heading into February from a revised -6.9 points a month ago.
Back at home, consistent FII selling, hawkish Fed commentary after monetary policy meeting, and rising crude oil prices weighed on sentiment. FII’s have been net sellers in the Indian market and the US Fed’s increasingly hawkish stance is expected to continue putting selling pressure in Indian markets. Despite the recent correction, Indian equities continue to remain expensive when compared to other global peers. The International Monetary Fund (IMF) has cut India's economic growth forecast to nine per cent for the current fiscal year ending March 31, joining a host of agencies that have downgraded their projections on concerns over the impact of a spread of a new variant of coronavirus on business activity and mobility. With the US Fed outcome now behind, domestic investors will focus on the upcoming Union Budget which will be presented on February 1.
On the commodity market front, CRB was inching towards 270 levels as boiling energy prices heat up the rally despite hawkish Fed Statements. The safe-haven U.S. currency got a boost after U.S. Federal Reserve chair Jerome Powell hinted at imminent interest hikes. Higher US yield amid stronger dollar sent gold prices below 48000 levels. Gold and silver now can trade in a range of 47200-48800 and 61000- 64500 levels respectively. Crude should see some consolidation from higher side, can trade in a range of 6250-6700. NBS Manufacturing PMI of China, GDP Growth Rate of Italy, Mexico and Euro Area, Inflation Rate of Germany, Italy and France, RBA Interest Rate Decision of Australia, Unemployment Rate of Germany, Markit Manufacturing PMI Final, ISM Non-Manufacturing PMI, Non-Farm Payrolls, Unemployment Rate and ISM Manufacturing PMI of US, Employment Change and Unemployment Rate of New Zealand, ECB Interest Rate Decision, BoE Interest Rate Decision and many more very high important data and events scheduled this week, which one should must consider while trading.
SMC Global Securities Ltd. (hereinafter referred to as “SMC”) is a registered Member of National Stock Exchange of India Limited, Bombay Stock Exchange Limited and its associate is member of MCX stock Exchange Limited. It is also registered as a Depository Participant with CDSL and NSDL. Its associates merchant banker and Portfolio Manager are registered with SEBI and NBFC registered with RBI. It also has registration with AMFI as a Mutual Fund Distributor.
SMC is a SEBIregistered Research Analyst having registration number INH100001849. SMC or its associates has not been debarred/ suspended by SEBI or any other regulatory authority for accessing /dealing in securities market.
SMC or its associates including its relatives/analyst do not hold any financial interest/beneficial ownership of more than 1% in the company covered by Analyst. SMC or its associates and relatives does not have any material conflict of interest. SMC or its associates/analyst has not received any compensation from the company covered by Analyst during the past twelve months. The subject company has not been a client of SMC during the past twelve months. SMC or its associates has not received any compensation or other benefits from the company covered by analyst or third party in connection with the research report. The Analyst has not served as an officer, director or employee of company covered by Analyst and SMC has not been engaged in market making activity of the company covered by Analyst.
The views expressed are based solely on information available publicly available/internal data/ other reliable sources believed to be true.
SMC does not represent/ provide any warranty express or implied to the accuracy, contents or views expressed herein and investors are advised to independently evaluate the market conditions/risks involved before making any investment decision.
DISCLAIMER: This report is for informational purpose only and contains information, opinion, material obtained from reliable sources and every effort has been made to avoid errors and omissions and is not to be construed as an advice or an offer to act on views expressed therein or an offer to buy and/or sell any securities or related financial instruments, SMC, its employees and its group companies shall not be responsible and/or liable to anyone for any direct or consequential use of the contents thereof. Reproduction of the contents of this report in any form or by any means without prior written permission of the SMC is prohibited. Please note that we and our affiliates, officers, directors and employees, including person involved in the preparation or issuance of this material may; (a) from time to time, have long or short positions in, and buy or sell the securities thereof, of company (ies) mentioned herein or (b) may trade in this securities in ways different from those discussed in this report or (c) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instrument of the company (ies) discussed herein or may perform or seek to perform investment banking services for such Company (ies) or act as advisor or lender / borrower to such company (ies) or have other potential conflict of interest with respect of any recommendation and related information and opinions, All disputes shall be subject to the exclusive jurisdiction or Delhi High Court.
SAFE HARBOR STATEMENT: Some forward statements on projections, estimates, expectations, outlook etc are included in this update to help investors / analysts get a better comprehension of the Company's prospects and make informed investment decisions. Actual results may, however, differ materially form those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, Impact of competing products and their pricing, product demand and supply constraints. Investors are advised to consult their certified financial advisors before making any investments to meet their financial goals.
The bank has substantially strengthened its collection system and would help in supporting asset quality going forward. The bank expects to maintain NIMs and CASA in coming quarters. According to the management of the bank, credit quality remains top quartile on the back of disciplined lending practices. The bank has delivered strong bottom line with key gains in Net Interest Income, Fee Income and Net Interest Margin. Net Profit improved substantially registering a growth of 29% and it helped deliver RoA of 1%+. Thus, it is expected that the stock will see a price target of Rs.122 in 8 to 10 months time frame on target PBV of 1.25x and FY23 BVPS (Book Value Per Share) of Rs.97.21.
The company is doing well and Q2FY22 has been a good quarter for the company due to adoption of innovative technological tools, self-reliant model, strong brand, on time delivery, robust balance sheet, presence in major cities, availability of sufficient liquidity and huge land bank for future growth. Moreover, Real estate sector is expected to perform better due to all time low housing loan interest rates, inherent demand for housing, various tax exemptions under income tax, CLSS (Credit linked subsidy scheme) scheme & other government benefits. Thus, it is expected that the stock will see a price target of Rs.997 in 8 to 10 months time frame on current P/BVx of 3.25x and FY23 BVPS of Rs.306.65.
The stock closed at Rs 40.85 on 28th January, 2022. It made a 52-week low at Rs 31.90 on 28th January, 2021 and a 52-week high of Rs. 48.20 on 18th October, 2021. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 39.28
Short term and medium term bias are looking positive for the stock as it is trading in higher highs and higher lows on charts. Apart from this, it is forming an “Inverted Head and Shoulder” pattern on daily charts which is bullish in nature. Last week, stock tried to give the breakout of same but couldn’t hold the high levels due to market’s volatility and ended with positive bias so follow up buying may continue for coming days. Therefore, one can buy in the range of 39- 40 levels for the upside target of 47-49 levels with SL below 36 levels.
The stock closed at Rs 790.25 on 28th January, 2022. It made a 52-week low of Rs 510.00 on 01st February, 2021 and a 52- week high of Rs. 864.70 on 08th June, 2021. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 722.04.
As we can see on charts that stock has rebounded sharply from recent lows and formed rounding bottom pattern on weekly charts and trading higher. On the technical indicators front such as RSI and MACD are also suggesting buying for the stock so follow up buying is anticipated from the stock from the current levels. Therefore, one can buy in the range of 775-782 levels for the upside target of 850-880 levels with SL below 735 levels.
Disclaimer : The analyst and its affiliates companies make no representation or warranty in relation to the accuracy, completeness or reliability of the information contained in its research. The analysis contained in the analyst research is based on numerous assumptions. Different assumptions could result in materially different results.
The analyst not any of its affiliated companies not any of their, members, directors, employees or agents accepts any liability for any loss or damage arising out of the use of all or any part of the analysis research.
SOURCE: RELIABLE SOFTWARE
Charts by Reliable software
After Indian markets began February series on negative impression as both Nifty and Bank Nifty wiped out all its gains to end marginally lower in Friday's session. Nifty ended the week just above 17100 mark while Banking index closed below 38000 mark as traders were seen cautious before the Union Budget due next week. From the derivative front, call writers added hefty open interest at 17300 & 17500 strikes while marginal open interest seen adding at 17000 put strike. Implied Volatility (IV) of calls closed at 20.59% while that for put options closed at 21.22%. The Nifty VIX for the week closed at 21.07% and is expected to remain volatile. PCR OI for the week closed at 1.64. From the technical front, Nifty has strong resistance at its 100 days exponential moving average which is placed at 17350 mark. However, Banknifty is looking much promising on charts as compared to Nifty as index can be seen trading above its short and long term moving averages on daily charts with formation of higher bottom pattern. For upcoming week, we expect that tug of war among bull and bears is likely to keep Indian markets on volatile path as Nifty is likely to trade in broader range of 16800 to 17500 levels.
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**The highest call open interest acts as resistance and highest put open interest acts as support.
# Price rise with rise in open interest suggests long buildup | Price fall with rise in open interest suggests short buildup
# Price fall with fall in open interest suggests long unwinding | Price rise with fall in open interest suggests short covering
Turmeric futures (Apr) witnessed lots of volatility and closed in red for the third consecutive week. During the week it recovered well after touching 4- week low levels. It is expected to trade higher towards 10700 with support at 9700. According to market sources, the export demand is improving which is supporting the prices. Currently, prices are up about 57% y/y on expectation of lower production and anticipation of higher demand in coming season. New season turmeric is arriving in the market and expected to increase as the season progresses. Now the weather is cleared but the arrivals have delayed by two to three weeks due to wet weather in Dec-Jan. The production could be lower in Karnataka by about 20-25% due to disease. In the first 8-months (Apr- Nov) of FY 2021/22, exports down 22% to 1,02,126 tons Vs last year but higher by 7.2% compared with 5-year average for the same period. Jeera futures (Mar) trade higher for the 5th consecutive week to climb over 3- year high last week and given signs of corrections. We expect the prices to trade in a range of 18700 – 19950. The arrivals increased as prices have improved over last one month. Strong demand from domestic and overseas buyers amid forecast of lower production supporting the market sentiment. Currently prices are higher by 43% y/y on reports of drop in area and improving domestic demand. In 2021/22, area under Jeera in Gujarat is only 3.07 lakh ha Vs 4.69 lakh hac last year and according to 2nd advance estimates production expected to fall by 41% to 2.37 lakh tonnes Vs 4.0 lt last year. In Rajasthan also area is down about 30% mostly losing to mustard seed. As per Govt. data, exports of jeera for Apr-Nov down by 20% Y/Y at 1.61 lakh tonnes compared to 2.02 lt last year. Dhaniya futures (Apr) are currently traded at 7-years high levels and closed in green last week. It is likely to trade higher towards 10600 with support at 9800. Currently prices are higher by 65.5 y/y and up 16.5% in Jan 2022 due to lower acreage compare to normal while market expecting production loss due to cold wave in north India. Area under coriander in Gujarat as on 24-Jan is pegged at 1,25,444 hac which is 145% area compared to normal area but less than last year 1,41,004 hac. As per govt. data, exports have been down 13% during Apr-Nov period to 32,900 tonnes Vs 37,765 tonnes last year but 10% higher compared to 5-year average.
Bullion has declined more than 3% since hitting its highest price in 10 weeks on the back of safe-haven buying driven by Russia-Ukraine tensions. The dollar rallied after robust U.S. economic data strengthened the case for an interest rate hike by the Federal Reserve in March. The drop in gold prices is a continuation of Wednesday's selloff as markets further digest Fed Chair Jerome Powell's comments on raising rates. U.S. economic growth accelerated in the fourth quarter to post its best performance in nearly four decades in 2021. Further hurting safe-haven gold's appeal for overseas buyers, the dollar soared to its highest levels since July 2020. Gold prices will drift lower in 2022 and 2023 as central banks raise interest rates, lifting bond yields and making non-yielding bullion less attractive. The U.S. two-year yield, which reflects interest rate expectations, surged to 1.208%, a nearly two-year peak. China's gold jewellery demand is expected to be supported by stable gold prices in 2022, an official of the World Gold Council (WGC) said, despite fears of slowing economic growth in the world's top consumer of the precious metal. In terms of gold investment, demand for bars and coins are expected to rise as precious metals divisions of Chinese commercial banks will continue to push sales of physical gold products. China's gold consumption last year rose by over a third from 2020, led by an uptake of gold jewellery, as its economy rebounded from the coronavirus impact. On COMEX prices may continue to trade in the range of $1780-$1830. Ahead in the week, prices may continue to trade in the range with sideways to bearish bias 46300-48900 and silver may witness higher volatility where it may take support near 59000-63000.
Oil rose, touching $90 a barrel for the first time in seven years, supported as tight supply and rising political tensions between Russia and Ukraine added to concerns about further disruption in an already-tight market. Oil prices edged off their gains in post-settlement trading, retreating with other risk assets like equities after investors interpreted U.S. Federal Reserve Chairman Jerome Powell's comments in a press conference on expected interest rate hikes as somewhat hawkish. Russia has amassed thousands of troops on Ukraine's border, fanning fears of an invasion. Energy market prices rose on worries that Russia's gas supply to Europe could be interrupted. U.S. Secretary of State Tony Blinken said the United States will make sure global energy supplies are not interrupted if Russia takes action. U.S. President Joe Biden said he would consider personal sanctions on President Vladimir Putin if Russia invades Ukraine. Separately, Yemen's Houthi movement launched a missile attack on a United Arab Emirates. Global political tensions have added to worries about an already tight energy market. OPEC+ is having trouble meeting monthly production targets as it restores supply to markets after drastic cuts in 2020, and the United States is more than a million barrels short of its record level of daily output. Ahead in the week, prices may continue to trade with positive bias where it may take support near 6300-6900. Natural gas futures are finally breaking out to the upside from its month-long support base. The Weather in the U.S. is expected to be warmer than normal for the next 6-10 days but turning cooler than average over the next 8-14 days. Ahead in the week, prices may continue to witness higher volatility in the range of 285-345.
Base metals may trade in range with positive bias but profit booking at higher level cannot be denied on boosting the dollar as prospects of a series of U.S. interest rate hikes this year may weigh on sentiment. The dollar climbed to its highest since July 2020, making metals priced in the U.S. greenback less attractive to global buyers. An early rate hike from the U.S. central bank could trim liquidity in financial markets and slow recovery in the world's biggest economy. But prices may get support from low inventories of the metals. Nickel inventories in LME-registered warehouses have fallen 65% since April last year, while those of aluminium and copper have dropped 56% and 60%, respectively. Copper may trade in the range 750-775 levels. Chile's Senate on Thursday pushed forward an amended version of the country's mining royalty bill, which would raise tariffs on firms operating in the world's top copper producing nation despite being watered down amid industry pushback. The Chilean Copper Commission has maintained its projection for 2022 copper prices at $3.95 per pound, as prices trend moderately down following a surge last year. Aluminum may move towards 255 with support of 240 on persisting supply concern. Aluminium may continue its rally on worries over supply from major producer Russia because of the Ukraine crisis. Nickel may trade of 1680- 1800. While metal supply is at risk of tightening in more than a decade, demand could rise if Russia invades Ukraine — although Moscow has repeatedly denied that it has no such intentions. Zinc can move towards 310 with support of 290 levels. Lead can move in the range of 184-192 levels.
Cotton futures (Feb) traded in the tight range 37110 – 36330 but closed positive for the second consecutive week. It is expected to trade sideways in the range of 36300 – 37500 with positive bias. Indian cotton prices are trading near record highs as growers prefer to hold on to their produce to fetch better returns. Current domestic prices are high 77% y/y and jumped about 10% in last one month due to concerns over production, slow arrivals, better domestic and exports demand. The CAI has reduced its crop estimate for the 2021-22 season by 12.00 lakh bales to 348.13 lakh bales Vs 360.13 lakh bales earlier while domestic consumption increased by 10 lakh bales. USDA also cut production in India to 27.5 million bales from 28 million bales while in the US - largest exporter, production was cut by 3.61% to 17.6 million bales. Guar seed futures (Feb) closed higher for the fourth successive week on improving demand as the exports are improving. It is expected to trade higher towards 6700 levels with support at 6100. Currently, prices are up 63% y/y on expectation of lowest production in last 5 years, multi-year lower stocks and improving export demand. In Nov, Guar gum exports are higher by 33% y/y at 24,150 tonnes while exports in 2021/22 (Apr-Nov) are up by 44.4% y/y at 2.09 lakh tonnes. The arrivals of guar seed are improving as the prices are slowing recovering since last three weeks. Moreover, the export demand for Guargum also will improve in next few weeks so as the crushing demand for the guar seed. Castor Seed (Feb) jumped to 7-weeks high last week on improving physical demand from the industrial users like lubricant, paints and soap industries on expectation of lower production in 2021/22. The prices are likely to trade higher towards 6700 with support seen at 6250. The prices have recovered in 2022 and currently higher by 46% y/y, as production of castor expected to be lowest in last three years. Gujarat agriculture department’s second advance estimate cut castor seed production by 1 lakh tonnes to 13.02 lt compared 14 lt in the first estimate. Last year production was 13.45 lt. Prices were down in Dec as Castor oil exports during Sep-Nov down by 16% at 1.39 lakh tonnes compared to 1.65 lt last year. Similarly, castor meal exports fall by 16.5% during (Aug-Dec) y/y.
Health Insurance is a growing sector that offers security during an unprecedented illness. It covers medical and surgical expenses
that arise due to an infection. The primary purpose of medical insurance is to protect one from shooting medical costs that can
deplete one's savings during troubled times. But the major drawback of the current health insurance policies is that they are not
value-based and more comprehensive. With comprehensive medical policies, patients need to pay for facilities they do not even
use. Thereby causing a steep increase in monthly premiums. Many individuals who have availed of health insurance plans do not
even completely know what facilities they can avail themselves of from the plans they have taken.
What if a value-based health insurance system could be brought about?
Value-based health insurance is an innovative approach to mitigating rising health insurance costs. Most health insurance providers offer a comprehensive plan in India than a value-based one. Most health premiums in India make the insured pay for all the facilities they don't use. But, with value-based health insurance, one can only pay for the plans they use.
Insurers, health care payers, and researchers can analyse the cost and the patient's health outcome to compute the price of a given service. Such customised pricing offered in medical products and charges will benefit the insured. Thus value-based insurance is devised to be more patient-centric, just like value-based health care. Therefore the value-based insurance design understands that not all healthcare services provide the same value, and some are more effective than others. Hence, seeking coverage based on the services used, the resources invested, and the value provided can drastically lower costs.
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Value-based health insurance design will provide patients and providers with high-value services. Eliminating cost-sharing for unutilised services can cut off certain costs, thereby reducing the net worth of care. This s is why many countries are quickly dopting value-based health insurance.
No matter how comprehensive one’s insurance plan is, the policyholder has to copay a certain amount to avail of the insurance benefits. This is difficult even for the higher income groups as the charges of good treatment are not affordable. Therefore it is even more unimaginable for lower-income policyholders.
Comprehensive health insurance levies higher premiums, which is mostly good, but the user is not using all the features he pays for. Additionally, health insurance premiums increase with age. There is a significant difference between taking a health policy at 30 and 50, and this is because the premium rates go up based on the increased risk.
Health insurance plans are primarily similar across all providers. It is not customised according to one's individual needs. This forces people with no other option than to buy a comprehensive plan though they don't require all the features mentioned in it. For example, while paying for a comprehensive program covering all Ayurveda, Unani, homoeopathy, and allopathy treatments. A person might use any two of the features offered, and they might not use the other two, yet he pays for all 4. with policyholder centric insurance policies, one has to pay only for the value he has used.
Even the high earning individuals cannot afford to copay hospital bills, given the rise in high-value medical treatments. Eliminating copays with value-based insurance can help low-income individuals use high-value services.
Value-based insurance policies do not have to worry about the higher premium costs burning a hole in their pockets. They can just pay for the value they have used. Health benefit plans can also reduce illnesses, focusing on maintaining and improving health.
When the focus is on providing value to patients, health care quality is improved. With plans offering more on disease preventive measures, the patient is also satisfied with the healthcare plans offered to them.
Good quality healthcare always benefits society. With value-based health insurance plans offering premium health care to the policyholders, the overall costs are naturally reduced.
When plans are offered to focus on illness prevention, the parents are encouraged to follow healthy habits. According to the patients ' profile, the insurance providers can recommend customised plans that provide solutions to reduce poor habits such as overeating, smoking, and excessive alcohol consumption.
The insurers provide annual health check-ups for all customers to be familiar with your medical issue and can detect a problem early on. These are the numerous benefits of having health insurance.
Value-based insurance recognises that not all healthcare services offer patients the same degree of value, and certain health services are more efficient than others. Value-based insurance plans were intended to encourage employees to use more effective and valuable assistance in the past.
Increasingly Popular in Public and Private SectorEmployee health care benefits designed as per value-based design concepts have become increasingly popular. These valuebased models have mostly emphasised chronic illnesses that require additional or recurrent medication.
Perks of Value-based Insurance go Further than Cost SavingsAccording to the research, patients' persistence disorders of asthma, diabetes, and depression medications are improved when co-pays are eliminated. The study showed many employees seeking high-value preventative therapies and that removing cost barriers can enhance employee health beyond addressing chronic disease.
With slight increases in tests and immunisations for illnesses such as colorectal, breast, and cervical cancers and influenza and HPV, the movement is shown to be in the correct direction.
Better Health ResultsMore employees willingly see their primary care provider by eliminating co-pays for primary care appointments. While this resulted in a substantial rise in expenses for the employer as more people visit the emergency department, the company's emergency costs are mitigated by fewer inpatient hospital admissions.
Costs of health care can be calculated in a variety of ways. While it's too early to assess the long-term impact, it's worth noting that the employees had better health outcomes, which results in lower costs over time.
With emerging health care needs in the post-pandemic era, the requirement of insurance needs has risen suddenly; people are looking for more and more health insurance providers who can facilitate customised treatment options as per their needs.
If a person is looking for COVID health insurance and not getting it, as many COVID policies come with many unwanted options, then it becomes a problem. Hence, in the post-pandemic era, the need for value-based insurance has risen and become more vital than before. People are looking for specific insurance where they don’t want other additional insurance benefits.
Young people are more inclined towards buying health insurance. Owing to the digital era we are in today, there should be more online plans for health insurance as the demand for the availability of online customised value-based insurance plans is rising day by day. Suppose we want to incline young people towards buying health insurance. In that case, we have to facilitate valuebased health insurance options as young people are becoming more prudent about their funding and spending.
The health effects of value-based insurance design are less well studied, but they appear void or favourable. Valuable evidence on the health effects of value-based insurance plans shows reduced cost-sharing for preventive medications.
High-value medications with established safety and effectiveness would obtain public coverage under a value-based insurance strategy. A well-designed value-based insurance policy would assure universal access to high-value therapies while maintaining the income of consumers and shaping the benefits of value-based copayments.
Under Value-Based Insurance Design, medications that do not provide acceptable value for money or lack evidence of value for money can be rectified. Customers can anticipate a value-based insurance approach to enhance the use of higher-valued medicines while decreasing the usage of lower-valued drugs. It assists in creating a healthier economy since it is affordable; high-quality healthcare is always beneficial to society. Overall costs automatically decrease when value-based health insurance policies provide quality health care to consumers.
Patients may face significant financial challenges due to cost-sharing, limiting prescription medication use. On the other hand, cost-sharing can be used to help finance a medical plan, direct patients to cost-effective medicines, and motivate medicine producers to price their products at levels that indicate a better price.
It is about time we start looking into keeping future national pharmacare programme expenses under control while providing access to a varied range of medicines and encouraging the use of medications that add the most value to the medicare system. In the wake of the times when employments are sparse and young blood is struggling to make ends meet, insurance must come as a relief and not added burden. In view of such needs, it becomes imperative to adopt value-based insurance design concepts.
Insured must only pay for what they need a shield for and buy, and not for other unwanted insurance benefits.
For all the Insurance need please visit to our website – www.smcinsurance.com
Credits:
Writer Name - Ms. Deeksha Dudeja (i-write India)
GOLD MCX (APR) contract closed at Rs. 47900.00 on 27th Jan 2022. The contract made its high of Rs. 49790.00 on 16th Nov’2021 and a low of Rs. 45919.00 on 30th Sep’2021. The 18-day Exponential Moving Average of the commodity is currently at Rs 48071.41. On the daily chart, the commodity has Relative Strength Index (14-day) value of 46.028.
One can sell near Rs. 48050 for a target of Rs. 47300 with the stop loss of 48400.
NICKEL MCX (FEB) contract was closed at Rs. 1714.00 on 27th Jan’2022. The contract made its high of Rs. 1803.00 on 20th Jan’2022 and a low of Rs. 1525.20 on 29th Dec’2021. The 18-day Exponential Moving Average of the commodity is currently at Rs. 1653.26. On the daily chart, the commodity has Relative Strength Index (14-day) value of 62.479.
One can buy near Rs. 1680 for a target of Rs. 1750 with the stop loss of Rs 1645.
CASTOR SEED NCDEX (FEB)contract closed at Rs. 6478.00 on 27th Jan’2022. The contract made its high of Rs. 6518.00 on 27th Jan’2022 and a low of Rs. 5764.00 on 29th Dec’2021. The 18-day Exponential Moving Average of the commodity is currently at Rs. 6236.61. On the daily chart, the commodity has Relative Strength Index (14-day) value of 64.219.
One can buy near Rs. 6350 for a target of Rs. 6700 with the stop loss of Rs. 6180.
CRB was inching towards 270 levels despite hawkish Fed Statements. The safe-haven U.S. currency got a boost after U.S. Federal Reserve chair Jerome Powell hinted at imminent interest hikes. Oil rose on Wednesday, touched $90 a barrel for the first time in seven years, supported as tight supply and rising political tensions between Russia and Ukraine added to concerns about further disruption in an already-tight market. Russia has amassed thousands of troops on Ukraine's border, fanning fears of an invasion. Energy market prices rose on worries that Russia's gas supply to Europe could be interrupted. Russia is also one of the world's largest oil exporters. Inventories in US rose in the latest week, with crude stocks up by 2.4 million barrels, against expectations for a modest decline. Gasoline inventories rose to their highest in almost a year - a needed salve for the market. Gold extended losses -- after falling the most in two months -- as a more hawkish-than-expected Federal Reserve underscored the central bank’s aggressive approach to tackling inflation. Bullion edged lower as Fed Chair Jerome Powell didn’t rule out raising interest rates at every meeting to rein in the quickest inflation in a generation. Gold futures settled down $36.60, or 2%, at $1,793.10 an ounce. It was the first time since Jan. 11 that the benchmark gold futures contract had gotten below the $1,800 psychological support. Short-term U.S. yields rose to 23-month highs and the dollar strengthened on Thursday. Base metals saw some appreciation, only nickel and lead saw profit booking from higher side. Nickel’s biggest supply squeeze in more than a decade is drawing attention from LME, as plunging inventories mean buyers are forced to pay massive premiums for immediately available metal. The global nickel market saw a deficit of 3,000 tonnes in November, compared with a shortfall of 1,600 tonnes a month earlier, data from the International Nickel Study Group (INSG) showed. Aluminium rose on worries over supply from major producer Russia because of the Ukraine crisis. Soaring electricity prices in Europe have triggered cuts in energy-intensive production of aluminium.
Turmeric prices dropped earlier on new crop arrival in South India; however it recovered from the low later on. Jeera prices appreciated further on reports of drop in area and improving domestic demand. In 2021/22, area under Jeera in Gujarat is only 3.07 lakh ha Vs 4.69 lakh hac last year. Dhaniya futures (Apr) traded near 7-year high levels due to lower acreage compare to normal while market expecting production loss due to cold wave in north India. Cotton continued to trade up on concerns over production, slow arrivals, better domestic and exports demand. The CAI has reduced its cotton crop estimate for the 2021-22 season by 12.00 lakh bales to 348.13 lakh bales of 170 kgs. each from its previous estimate of 360.13 lakh bales of 170 kgs.
Rising interest rates in the United States have an obvious effect on the world's economy. In the aftermath of the 2008 Financial Crisis, the Federal Reserve implemented years of quantitative easing to stimulate economic recovery, slashing rates to a near-zero, where they remained for the next six years. The idea was to spur investments, along with consumer spending, and drag the America economy out of recession. In the years that followed, the economy did begun to recover, and, as a result, the Federal Reserve has indicated that it will raise interest rates once again. Historically, rising interest rates have gone hand-inhand with an appreciating US dollar. This, in turn, affects economic facets domestically and around the world—particularly the credit market, commodities, stocks, and investment opportunities.
On December 15, 2021, US Federal Reserve has signaled to intensify its battle against the hottest inflation in a generation by shifting to end their asset-buying program earlier and signaling they favor raising interest rates in 2022 at a faster pace than expected. Now on January 26, 2022, the Federal Reserve has affirmed that it is likely to hike interest rates in March and reaffirmed plans to end its bond purchases that month in what U.S. central bank chief Jerome Powell pledged will be a sustained battle to tame inflation. However, the pace of subsequent rate hikes or how quickly officials will let its massive balance sheet decline left undecided.
Why rates are projected to rise
Interest rates- the cost of borrowing- have been at record lows since the start of the pandemic in 2020, when the economy plunged into a sharp recession. The Fed slashed its key short-term Fed funds rate to near zero and ramped up its bondbuying program to revive the economy. Now the Fed is now pivoting to a less simulative policy to cool the spiking inflation caused by pent-up demand and supply chain disruptions. US Consumer Prices Rose 7% in 2021, Fastest Pace since June 1982. At the same time, the nation’s jobless rate fell to 3.9%, moving the job market closer to the Fed’s goal of maximum employment.
Commodity market when Fed starts raising rates
Oil, gold, cotton and other global commodities are priced in US dollars, and a strong currency following a rate increase would increase the price of commodities for non-dollar holders. Economic stimulus usually lifts gold higher as the metal is considered a hedge against inflation and currency debasement. This combination of slower growth and higher inflation should generate investment demand for gold. Even more aggressive rate hikes may end up being positive for gold as it will further raise the risk of a policy mistake from the Federal Reserve as it increases recessionary risks.
A signal by the U.S. Federal Reserve to tackle inflation before it derails the U.S. economy boosted the crude prices. The FOMC policy decision was the right amount of hawkishness that allowed risk appetite to remain healthy and supportive for economic growth, which is also positive for oil demand. However, bullion and energy has remained supported on safe-haven demand amid a standoff between Western powers and Russia over concerns that Moscow may invade Ukraine.
Citing factors such as global and US inflation worries, a rate-hike cycle being adopted by central banks could trim liquidity in financial markets and slow recovery in the world's biggest economy and the industrial metal prices would face a downward pressure globally. The high prices of metals have been already killing the demand in India, China and parts of Asia, besides South-East Asia.
Rupee is likely to continue its losing streak for fourth straight day amid Fed rate hike prospects weigh domestic currency. Ahead of union budget due next week, rupee is likely to remain vulnerable over fiscal deficit target for FY23. Technically USDINR likely to face steep resistance around 75.40 while supporting stands at 75.04 for the day. Meanwhile the pound fell close to 1-month lows in reaction to the Fed meeting yesterday. The Bank of England meets next week where a move to tighten monetary policy would sure up lower support. Technically we will remain slightly bullish in GBPINR towards 101.40. While Euro dropped further versus the dollar to the lowest levels since June 2020. The move is predicated by sustained dollar strength and dovish comments from ECB policy member Kazimir on inflation. USDJPY continues to climb this week amid a flatter treasury curve. Nearby resistance in the upper bound is 115.50 which is the last resistance before highs of 116.35; the yen’s weakest point since 2017.
USD/INR (FEB) contract closed at 75.3875 on 27-Jan-21. The contract made its high of 75.5525 on 27-Jan-21 and a low of 74.6000 on 24-Jan-21 (Weekly Basis). The 21-day Exponential Moving Average of the USD/INR is currently at 74.7356.
On the daily chart, the USD/INR has Relative Strength Index (14-day) value of 58.88.One can buy at 75.00 for the target of 76.00 with the stop loss of 74.50.
GBP/INR (FEB) contract closed at 101.0300 on 27-Jan-21. The contract made its high of 101.4450 on 24-Jan-21 and a low of 100.8600 on 25-Jan-21 (Weekly Basis). The 21-day Exponential Moving Average of the GBP/INR is currently at 101.0350.
On the daily chart, GBP/INR has Relative Strength Index (14-day) value of 47.53. One can sell at 101.00 for a target of 100.00 with the stop loss of 101.50.
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| 24th JAN | US and UK order embassy staff to leave Ukraine |
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EUR/INR (FEB) contract closed at 84.4275 on 27-Jan-21. The contract made its high of 85.5000 on 25-Jan-21 and a low of 84.3850 on 27-Jan-21 (Weekly Basis). The 21-day Exponential Moving Average of the EUR/INR is currently at 84.5950.
On the daily chart, EUR/INR has Relative Strength Index (14-day) value of 35.64. One can buy at 83.75 for a target of 84.75 with the stop loss of 83.25.
JPY/INR (FEB) contract closed at 65.4900 on 27-Jan-21. The contract made its high of 66.0000 on 24-Jan-21 and a low of 65.4225 on 24-Jan-21 (Weekly Basis). The 21-day Exponential Moving Average of the JPY/INR is currently at 65.2110.
On the daily chart, JPY/INR has Relative Strength Index (14-day) value of 48.38. One can sell at 65.50 for a target of 64.50 with the stop loss of 66.00.
The initial public offering (IPO) of Vedant Fashions Ltd, which owns ethnic wear brand Manyavar, will open on February 4. The initial share sale will conclude on February 8, according to the red herring prospectus (RHP). The public issue is purely an offer-for-sale of 3,63,64,838 equity shares by the promoter and existing shareholders. The OFS comprises sale of up to 1.74 crore shares by Rhine Holdings Ltd; up to 7.23 lakh shares by Kedaara Capital Alternative Investment Fund- Kedaara Capital AIF I, and up to 1.81 crore shares by Ravi Modi Family Trust. Since the IPO is entirely an offer for sale, the company will not receive any proceeds from the public issue. The company, which filed its preliminary IPO papers with Sebi in September, obtained its observation letter on January 18. In Sebi parlance, its observation implies its approval to launch the IPO. In Sebi parlance, its observation implies its approval to launch the IPO. Vedant Fashions' "Manyavar" brand is a category leader in the branded Indian wedding and celebration wear market with a pan India presence. The company’s other brands include Twamev, Manthan, Mohey and Mebaz. As of September 2021, the company has an extensive retail network with 546 exclusive brand outlets (EBOs), including 58 shop-in-shops globally — 11 overseas EBOs across the United States, Canada and the UAE, having a large Indian diaspora.
Adani Wilmar, one of the leading FMCG food companies in India, on January 25 mobilised Rs 939.9 crore from 15 anchor investors ahead of its IPO launch. The issue will open for subscription on January 27.The company in its BSE filing said it has finalised allocation of 4.08 crore equity shares to anchor investors at a price of Rs 230 per share, the upper price band. Marquee investors invested in the company through anchor book including Government of Singapore, Monetary Authority of Singapore, Jupiter India Fund, Volrado Venture Partners Fund, Societe Generale, Cohesion MK Best Ideas, Winro Commercial and Dovetail India Fund. Among others, HDFC Mutual Fund, Nippon Life India Trustee, Aditya Birla Sun Life Trustee, and Sun Life Excel India Fund also participated in the anchor book. Adani Wilmar is planning to raise Rs 3,600 crore through its public issue which is entirely a fresh issue. The offer comprises shares worth Rs 107 crore for its employees and Rs 360 crore worth of shares for shareholders of the company. The price band for the offer, which closes on December 31, has been fixed at Rs 218- 230 per share. Employees will get shares of Adani Wilmar at a discount of Rs 21 per shares to final issue price.
Airport service aggregator platform Dreamfolks Services Ltd has filed preliminary prospectus with capital markets regulator Sebi to mop-up funds through an initial share-sale. The initial public offer (IPO) is entirely an offer-for-sale of up to 21,814,200 equity shares by promoters -- Liberatha Peter Kallat, Dinesh Nagpal and Mukesh Yadav, according to the draft red herring prospectus (DRHP). The public issue will constitute 41.75 per cent of the post offer paid-up equity share capital of the company. Dreamfolks facilitates an enhanced airport experience for passengers, leveraging its technology-driven platform. The company's assetlight business model integrates global card networks operating in India, credit card and debit card issuers and other corporate clients, including airline companies, with various airport lounge operators and other airport related service providers on a unified technology platform. It facilitates consumers' access to the airport related services like lounges food & beverages, spa, meet & assist airport transfer, transit hotels or nap room access, and baggage transfer services. Equirus Capital and Motilal Oswal Investment Advisors are the book running lead managers to the issue.
Emcure Pharmaceuticals has received regulatory approvals for its draft red herring prospectus and will shortly be filing the RHP for the Rs 5,000-crore initial share sale, which will hit the market soon after the Budget. The IPO consists of a fresh issue of up to Rs 1,100 crore by the company, which will be used as growth capital, and an offer for sale by promoter shareholders -- founder, managing director and chief executive Satish Mehta who owns 41.92 per cent and by son Sunil Mehta who holds 6.13 per cent. Other promoter groups/persons who are participating in the OFS collectively own 33.55 per cent, and global private equity major Bain Capital owns 13.09 per cent in the Pune-headquartered pharma major which is the 12th largest player in the country. The company will utilize Rs 947 crore from the proceeds of the issue to repay/prepay debt which as of March 2021 stood at Rs 1,252.6 crore, the merchant banking sources told PTI on Thursday, adding the issue will hit the market early next month. Emcure is one of the market leaders in HIV antivirals, gynaecology and blood-related therapeutic areas, and had a domestic market share of 51.53 per cent, 11.85 per cent and 10.26 per cent, respectively, as of March 2021, according to a Crisil report.
Automobile dealership chain Landmark Cars Ltd has filed preliminary prospectus with capital markets regulator Sebi to raise Rs 762 crore through an initial public offering. The public issue consists of a fresh issue of equity shares aggregating to Rs 150 crore and an Offer For Sale (OFS) of up to Rs 612 crore, according to the Draft Red Herring Prospectus (DRHP). The OFS comprises sale of shares worth up to Rs 400 crore by TPG Growth II SF PTE Ltd, up to Rs 62 crore by Sanjay Karsandas Thakker HUF, up to Rs 120 crore by Aastha Limited and up to Rs 30 crore by Garima Misra. The Initial Public Offering (IPO) also includes a reservation for subscription by eligible employees. Proceeds from its fresh issuance worth Rs 120 crore will be utilised for payment of debt and general corporate purposes. TPGbacked Landmark Cars is a leading premium automotive retail business in India with dealerships for Mercedes-Benz, Honda, Jeep, Volkswagen and Renault. Landmark Cars, otherwise known as Group Landmark has a presence across the automotive retail value chain, which includes sales of new vehicles, after-sales service and repairs, including sales of spare parts, lubricants and accessories, and sales of pre-owned passenger vehicles.
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Navi Mutual Fund has launched the Navi US Total Stock Market Fund of Fund. The fund will invest in Vanguard Total Stock Market ETF, which is one of the largest passively managed US-based ETFs. The Fund’s Expense Ratio will be 0.06% per annum. However, the fund house has said that the expense ratio is not permanent and is subject to change from time to time within the overall permissible expense ratio of 1.00%. The NFO will open for subscription on February 4 and will close on Feb 18. This is the third passively-managed scheme launched by Navi Mutual Fund this year. It launched the Navi Nifty Next 50 Index Fund and Navi Nifty Bank Index Fund in January, both of which are low cost index funds. The fund house plans to launch three more funds by the end of March.
Motilal Oswal Asset Management Company launched Motilal Oswal Nifty200 Momentum 30 ETF and Motilal Oswal Nifty200 Momentum 30 Index Fund. The new fund offer (NFO) of the scheme will close for subscription on February 4. These schemes replicate the performance of the Nifty200 Momentum 30 index. The Nifty200 Momentum 30 index selects the top 30 companies with the highest six-month and 12-month ‘momentum’ as defined in the index methodology. The constituents need to be part of the Nifty 200 index and should also be available for trading in the F&O segment with a minimum listing history of one year. On a historical basis, Momentum has been one of the best performing factors, generating sizable excess returns. Some of the strongest returns for momentum have traditionally been generated in bull-markets and expansionary business cycles, Motilal Oswal AMC said.
Capital markets regulator Sebi has advised DSP Global Innovation Fund of Fund (FoF) to limit its overseas investment to ETFs only and wait till Reserve Bank of India enhances the $7 billion limit set for mutual funds before investing in active funds. Sebi advised us that DSP Global Innovation Fund of Fund should initially invest only in overseas ETFs until the limit of $7 billion is increased in consultation with RBI," said a note by DSP MF to investors. The fund house is hopeful that the regulator will increase the limits soon, and it will be able to invest in line with its original design. DSP Global Innovation Fund of Fund, where the NFO is currently open, was to invest in a mix of global active funds and ETFs that in turn invest in innovation and technology-driven companies. About 30% of its corpus was to be invested in two ETFs namely, iShares NASDAQ 100 UCITS ETF and iShares PHLX Semiconductor ETF, with the balance 70% in four actively managed funds - BGF World Tech Fund D2 USD, Nikko AM ARK Disruptive Innovation Fund, Morgan Stanley US Insight Fund and Bluebox Global Technology Fund.
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