Post Market views - March 16, 2022 - Reliance Securities

Mr Mitul Shah, Head Of Research at Reliance Securities.

Domestic markets closed higher on the back of broad-based buying, despite the unresolved Russian-Ukraine conflict and even as investors keenly await on the outcome of US Fed policy for raising interest rates. Nifty gained 1.9%. Nifty MidCap and Nifty SmallCap were up by 2% and 1.1% respectively. All sectoral indices ended in green. Nifty Reality increased the most at 3.8% followed by Nifty Metal (+2.6%) and Nifty Pvt Bank (+2.3%).

U.S equities closed higher as oil prices slumped more than 7% to ~$95 per barrel. The Dow Jones advanced 1.8%, while the S&P 500 rose 2.1%. The tech-heavy Nasdaq surged 2.9%. The 10-year U.S. Treasury yield rose to 2.16% to hit its highest point since July 2019. The Federal Reserve's two-day meeting to decide on the interest rates will end on Wednesday. The market expects Fed to raise interest rates by 25 bps, marking its first increase since 2018. Moreover, the Fed will also release Summary of Economic Projections, showing the thoughts on possible interest rates and economic growth for the year.

The electoral wins will reassure markets about the central leadership maintaining a stable policy outlook. Even so, the Russia-Ukraine conflict and inflationary pressures are assessing the market sentiment. The key event for this week is US Federal Reserve rake hike decision. The current elevated inflation warrants policy action. However, the Russia-Ukraine war is stoking economic uncertainty. It has to be seen if the US Fed and Bank of England will stick to their monetary policy tightening and rate hike plans.

Source : Equity Bulls

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