Week Ending 24th November 2023

Dear patrons, the week gone by was lackluster on the indices with focus shifting to stock specific action. The benchmark index participants were in a consolidation phase and midcaps along with small caps were in the limelight with both indices making life time highs.

Globally also it was a lack luster week, with almost all markets trading in a range. On news front as well, there was no event which made headlines. Something is surely brewing in the equity markets across the globe and by all means it looks like it is going to be good for investors.

Foreign Institutional Investors had a muted participation last week barring last trading session where they turned aggressive buyers. Domestic Institutions have been buyers through the last week. Coming week being truncated and expiry week as well, should see volatility spiking up and swift movement in both directions can be seen.

Let us look at what exactly the indices did last week and try to anticipate what is in store for the next week.

We had stated last week that Nifty has resistance around 19850-19900 levels and support around 19300. The Nifty made a low of 19380 and a high of 19875. For the coming week Nifty has support around 19600-19700 failing which, it may drift towards 19400. Nifty may surprise on the upside though, owing to expiry week. Short covering along with fresh buying may lead Nifty towards new highs.

BankNifty, which was sedate for the first half of the week managed to hold its head above the crucial 43400 mark and looks set for an up move with resistance around 44000. Closing above 44000 should open doors for further up move towards 45000. BankNifty appears to be a strong candidate for short covering next week on account of monthly expiry.

Traders need to be nimble footed as moves could be swift on either side. Mantra remains the same for investors though, keep accumulating good quality stocks.

Stay Invested!!!

“The intelligent investor is a realist who sells to optimists and buys from pessimists.”~ Benjamin Graham

P.S.: This communication is for educational purpose only and does not recommend buying or selling any stock or index. Trade at your own risk.

Week Ending 17th November 2023

Dear patrons, the Indian markets are on a role for last few weeks holding ground and being resilient to the financial as well as geopolitical situation around the globe. In the week gone by indices on the NSE and BSE posted decent gains and ended UP almost 1.5%.

Rise in the markets can mainly be attributed to the fall in inflation both in India as well as the US. Drop in inflation in the US was a substantial 0.5%, highest, for a long time. India CPI also came down from 5.2% to 4.87%. Easing inflation augurs well for the equity market as the pressure on interest rates will also ease and we may see higher liquidity in the system prompting investors to switch to risk ON mode. 

Back home, we are consistently witnessing robust growth in the economy, the results season being a testimony to rise and rise of the Indian economy. Rise in economy is the booster to the propulsion of the equity markets towards newer highs.

Let us now look at what transpired in the last week and try to figure out what lies in store next week.

As we can see, Nifty rose in the last week owing to good inflation data. Nifty has strong support in the 19350-19400 zone and resistance in 19850-19900 zone. Closing above the resistance zone should propel the Nifty to newer highs in near future. In case of any adverse event a close below 19300 may lead the Nifty towards 18900, which should act as a very strong support and we are unlikely to witness levels below 18900 in near future.

BankNifty on the other hand was hit by the new RBI regulations on personal loans, where the risk weightage was increased from 100% to 125%. The move by the RBI is likely to impact the earnings of many Banks as well as NBFCs adversely. The steps taken by RBI, although look to be negative for NBFCs particularly, should lead to cleaning up of the personal finance business and reducing risk to the overall economy. BankNifty has strong support around 43400-43500. Close below 43400 opens doors for further downward movement. 44000 should act as resistance and a close above 44000 should lead the BankNifty towards 45000 and beyond.

In the meanwhile keep accumulating good stocks and keep booking profits as well. Ample opportunities are available in the markets to make good profits.

"Far more money has been lost by investors trying to anticipate corrections, than lost in the corrections themselves.” ~ Peter Lynch

P.S.: This communication is for educational purpose only and does not recommend buying or selling any stock or index. Trade at your own risk.

Adani, Hindenburg and India

We are all aware about the report published by professional short selling firm Hindenburg against Adani group. The said report has resulted in fall of share prices by more than 80% from recent highs. All Adani group shares have borne the brunt of this report. What this fall in share price has done, is that it has managed to dethrone Gautam Adani, Chairperson of the Adani group from top ten billionaires in the world from the position of 2nd rank. Is this a conspiracy against India or just another strategy in the market?

Well, from the looks of it, it may look like a strategy but actually it is deep hatred ingrained in the western society for a brown man getting into an elite club, of which, only white skinned had the monopoly. Adani was not only a member of the elite club, but he threatened to dethrone the number one. 

Secondly, India is taking huge strides in becoming a developed nation from a so called third world country. This growth is not very well digested by the developed world. Huge amount of Foreign Direct Investments are on their way to India. India is likely to become the world’s manufacturing hub, replacing China. India has already taken over the UK as the 5th largest economy and is likely to be among top 3 in the next decade. This growth has been largely driven by Indian businesses like Adani group. Once one breaks the back of growth in businesses, the economy is automatically affected resulting in job losses, lower income and overall stagnation or downward movement of the GDP.

No doubt Adani group has debt, so do all the businesses. No business or country can effect growth without debt. If we look at the debt by countries in comparison to the GDP, we find that India is ranked 17th in overall debt with close to 20% debt to GDP ratio, whereas the US has close to 120% debt to GDP ratio while Singapore tops debt to GDP ratio among top 20 countries with a whopping 470% debt to GDP. When we look at individual companies we find that although Adani has debt, it is not the biggest debt company in India. Also, of the total debt owed by Adani around 25% comes from Indian banks and rest from overseas bonds and loans from foreign entities. Adani group is estimated to have a debt of around $ 30 billion, which is nothing compared to the top debt owner TOYOTA having close to $ 186 billion debt. Adani doesn’t feature in top 30 in the list. As far as Indian companies are concerned NTPC alone has almost the same debt as the entire Adani group. To add to that Adani Enterprises, the flagship company of the Adani group has been consistently clocking profits for last four quarters. YoY company went from loss to profit in Q3FY23.

Why single out Adani then? The answer lies in the growth of the company outside India. All of this started the day, the company acquired coal mines in Australia. And to add to it, the group acquired various ports and mines across the world from Sri Lanka to Israel. The question of whether the group has government backing or not does not arise here. If government backs Adani group, it is the duty of the government of the day to back any Indian business in growth and going global. No one has ever uttered a word when China backed its companies with low interest loans, subsidies and all other support and flooded the world with cheap Chinese products. Why should anyone cry foul if any Indian company is backed by its government.

Let us come to the old, opinionated, rich and dangerous George Soros. Soros is a degenerated rich man finding solace in someone else’s misery. He is that contemptuous person who made his fortune by selling his own ilk to the butchers of the Nazi forces. This wily old degenerate has the audacity to lecture us on democracy, which is thriving and prospering in India. We know what democracy is and how it works. A third rate scum like Soros has no business lecturing us on it. His failed attempts for a regime change in India has rattled the wily bastard. This is the reason he has chosen Adani shoulder to fire against India and Indian democracy.