WEEKLY TRENDSETTER (July 22nd ,2022)
| 2022 | July 8 | July 15 | Ch % |
| NIFTY | 16220 | 16049 | -1.05 |
| BANK NIFTY | 35124 | 34682 | -1.26 |
| USD/INR | 79.29 | 79.85 | 0.71 |
MARKET REVIEW–The week was broadly in a range and only a late flourish on Friday arrested some of the losses. The rupee was more in focus as it was nudging an all time low of 80 against the dollar. Despite the rupee weakness the same did not help IT counters which were witnessing the selling brunt on the back of subdued June quarter results.
INTERESTING MUSINGS
Asian nations mull over settling trade in local currencies
The dollar’s strength over the past few months has awakened Central bankers to the vulnerability of over dependence on dollar. In fact, China has already started trading with Russia without using dollars. The dollar’s share in global foreign exchange reserves fell below 59 % in the fourth quarter of last year, extending a two-decade fall, according to the IMF’s currency composition of official foreign exchange reserves data. Going ahead it will be interesting to see if the move breaks the stranglehold of the dollar on world trade because of which countries like India which is heavily dependent on crude imports have seen a double whammy with the dollar uptrend and the crude shooting above $100 and sustaining for the last few months.
Tech companies on a cost cutting mode
The last few months slide in stock prices of tech companies in India has raised alarms as not anytime in the past has this bellwether industry seen a selling pressure when the dollar is gaining strength. The reasons are due to a possible global recession or a slowdown which even Accenture in its quarterly results had indicated. The growing trend of layoffs by tech majors like Twitter, Microsoft, Google Netflix are further proof of the slowdown. While amidst this perceived gloom over the industry Indian tech companies have already reached attractive valuations and could catch the attention of investors seeking value. The June quarter results have so far been on expected lines though the management commentary of companies has been optimistic. With the rupee at an all-time low against the dollar, the tide may turn for the better in the next 6 months.
MARKET OUTLOOK
Some technical cues are as follows going by market trends: –
NIFTY-The index was under pressure right from the beginning of the week and threatened to breach 15800.However, some positive global cues came to the rescue as bears scampered for cover. Indications are that early part of the coming week should be positive but levels of 16300-400 have to be decisively cleared and sustained. For the immediate short term 16000 should hold.
BANK NIFTY-The index showed promise but fizzled out as higher levels were not defended by the bulls. The result season could prove decisive for the index but levels of 35300-500 could again prove difficult to sustain.
SCRIPS TO WATCH OUT
Larsen &Toubro (1685)-The scrip has seen good short covering around levels of 1620-40 levels and could see further advance to levels of 1730-40. The 200-dma at around 1750 could act as a strong resistance. Buying could be considered for a modest appreciation.
Cummins (1128)-The scrip has seen good delivery-based buying and has broadly out-performed the market. Levels of 1200 could be expected in the coming weeks.
Have a great trading week!
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam