Mr. Mitul Shah - Head of Research at Reliance Securities.
Indian equities closed higher following positive global cues while the market prepare for the upcoming earnings season. The Nifty gained 2.3%, while Nifty Mid Cap and Small Cap were up 3.1% and 1.8% respectively. All sectoral indices ended in green. Nifty Pvt Bank was the major gainer, which climbed 3.2%, followed by Nifty Metal and Nifty PSU Bank which were up 3.1% and 3% respectively. Meanwhile, India's exports contracted by 3.52% to $32.6bn in Sep'22 against $33.8bn in the same month last year. The trade deficit widened to $26.7bn.
U.S. equities closed higher, providing some relief to the market. The Dow Jones climbed 2.7%, the S&P 500 added 2.6% while Nasdaq rose 2.3%. The benchmark 10-year Treasury note ticked down to 3.650% from 3.802% Friday. Meanwhile, the manufacturing PMI dropped to 50.9 in September from 52.8 in August, the lowest reading since May 2020. OPEC and its allies are weighing a production cut to bolster prices. The market sustained deep losses for the first nine months of the year as central bank officials have increasingly made clear that interest-rate increases and monetary tightening will continue.
Markets are awaiting 2QFY23 earnings results for further cues, which will start from next week. The central banks globally are in the midst of inflation firefighting as many are rapidly raising their policy rates. The RBI raised its key repo rate by 50 bps to curb rising inflation. RBI may have to keep up with the monetary policy tightening and a further rate hike of 35 bps is expected in Dec'22. India in all likelihood to prevent recession while US and Europe headed towards it. The market given positive response to the commentary on India's growth impulses and projection of 7% GDP growth with 6.7% inflation for FY23.