GENERAL SECTORIAL OUTLOOK Oil and Gas • The refining Margins | Equitech Wealth 🎯🙏

GENERAL SECTORIAL OUTLOOK

Oil and Gas
• The refining Margins are at life highs and will continue to remain positive for standalone refineries like MRPL, CPCL and Reliance (whose GRM are at 20 year highs)
• Crude oil continues to remain at Life Highs impacting the margins for OMC's. BPCL, HPCL, IOCL stock prices remain at 52 week lows.
• Private fuel pumps in multiple states have either reduced the sales / shut down pumps on account of retail price capping by the Government causing retail fuel disruptions.
•ATF price rises will impact Airline Operstors.
• Natural Gas prices saw a approximate 22% fall. This can prove beneficial for the otherwise hammered down stocks like MGL, IGL and GUJGAS.

Cement
• High Capex plans as announced in the earlier few week, Entry of Adani group with Holcim Aquisition, approaching Monsoons and muted domestic demand keeps the Cement companies under pressure.
• Fitch Ratings has reduced the capability utilization of Cement Companies to 65% of capabilities negatively impacting the stocks.

Sugar
• Sugar stocks remain in focus as government caps Export limited to control sugar price inflation.

Fertilizer and Agrochemicals
• Capex plans across the above space between the FY23 to FY25.

Other Important News impacting the Markets

Negative :
• Indian funds in the Swiss Banks jumps by 50%. Now over 30,000 crores.
• GDP forecasts cut for the Financial Year 2023.
• Wholesale Price Index spikes to record highs in India.
• Consumer Price Index spikes to highest levels in Switzerland.
• US Markets have entered the Bear Markets.
• Data showed that SIP investments have fallen to a 12 month low.

Positive
• The FOREX reserves maintained by the RBI would help India counter the global volatility.
• advance tax collections rises by 48% for Indian corporates for April to June Quarter.
• Exports rise by approximately 21% in May 2022.
• May CPI has cooled down to 7.04% on Month on Month basis from its life highs in April 2022.
• India's factory outlook jumped to a 8 month high in April 2022.
• As per the RBI India is better placed to handle stagflation worries as compared to other global economies.

FUTURE OUTLOOK OF MARKETS

• Last week the upper cap given on Nifty50 was 16600 with an open view on downside. NIFTY50 LOST 1000 points subsequently.
• Now 16000 looks a very strong resistance for 6 to 9 months.
• Markets expected to be range round with a negative bias.
• Every rally in the markets would be sold into on broader basis.
• Large Cap stocks (BluChips) look at very attractive valuations. Staggered buying SHOULD be initiated in them.
• A relief rally can be anticipated in the Nifty 50 and BankNifty in the first half of the coming week as per Technical Setup.
• Avoid volatile and news based stocks. Midcap and Small Cap Stocks. High Volatility is expected.