Post Market views - August 23, 2022 - Reliance Securities

Mr. Mitul Shah - Head of Research at Reliance Securities.

Indian equities closed higher despite weakness in global markets. The market is expecting hawkish comments from FED chair Jerome Powells at Jackson hole symposium on Friday. Nifty increased 0.5%, while broader markets out-performed the main indices as Nifty Mid Cap and Small Cap rose 1.2% and 1.1% respectively. All sectoral indices ended in green except Nifty IT (-1.8%). Nifty PSU Bank gained the most at 2.3% followed by Nifty Auto and Nifty Metal which were up 1.8% and 1.4% respectively.

U.S. equities ended lower on fears of additional sharp interest-rate increases by the Federal Reserve. The Dow fell 1.9%, the S&P 500 dropped 2.1%, while Nasdaq slid 2.5%. The yield on the benchmark 10-year Treasury note rose to 3.035%, from 2.987% on Friday. Despite a multiple headwind like rising interest rate, monetary tightening and volatile commodity costs, the Nifty has outperformed global markets since Dec'21. While DII have started selling, FIIs bought worth Rs445bn so far in Aug'22 into Indian equites. The earnings season has ended with strong revenue growth while pressure continued on the margins due to commodity inflation. We expect FII to remain net buyers as valuations are comparatively reasonable while India's growth is high compared to other emerging nations. Though near-term negatives in terms of concerns of depreciating rupee, widening trade deficit and volatility in global crude prices continue to exert pressure on economy and equity markets, we expect strong economic rebound, normalized commodity prices, inflation within a targeted range and better visibility in 2HFY23E.

Source : Equity Bulls

Keywords

PostMarketViews Nifty Sensex RelianceSecurities