Mr. Mitul Shah - Head of Research at Reliance Securities.
Domestic markets closed higher on positive global cues. The Nifty increased 0.7%, while Nifty Mid Cap and Small Cap rose 0.4% and 1.2% respectively. All sectoral indices ended in green. Nifty Media was major gainers which climbed 2.8% followed by Nifty Metal which gained 1.7%. Oil surged on the possibility that OPEC+ may decide to trim production and as Europe's energy crisis worsened after the Group-of-Seven nations endorsed a plan to try to cap the price of Russian crude.
U.S. equities closed lower for the week, with S&P 500 was fell 3.3%, the Nasdaq tumbled 4.2%, while the Dow Jones shed 3%. The yield on the benchmark 10-year Treasury note continued its streak of weekly gains and settled at 3.19%. The U.S. economy added 315,000 jobs in August, largely in line with estimates. The positive momentum in monthly jobs report will not alter the Federal Reserve's course on interest rate hikes. Meanwhile, energy prices have recorded some of their biggest swings in history while electricity prices surge. Brent crude lost 6% to end at $93.02 a barrel. The market increased their rate hike expectations from the US Fed's monetary policy meeting later this month to 75 bps.
India's GDP data for Q1FY23 came in at 13.5%, but still lagged the consensus estimate of 15.2%.Moreover, Unemployment rate in urban areas eased to 7.6% in Q1FY23 from 8.2% in the trailing quarter. India's GDP growth is expected at 7% in FY23, although challenges remain in the form of the global slowdown, geo-political uncertainties and policy tightening. The RBI is likely to opt for slower pace of hikes in forthcoming meeting. The RBI has already hiked the repo rate by 1.4% in three consecutive actions since May this year, in response to the high inflation which has been consistently breaching upper end of RBI's tolerance band. India's retail inflation may be moderating after hitting a peak recently.