Post Market views - Oct 11, 2022 - Reliance Securities

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

Domestic equities closed lower following weak global cues. The Nifty fell 1.5% while broader markets under-performed the main indices as Nifty Mid Cap and Nifty Small Cap declined 1.7% each. All sectoral indices ended in red. Nifty Reality was the major laggard which was down 3.1%, followed by Nifty Metal and Nifty Media which plunged 2.2% and 2% respectively. Meanwhile, the market await the CPI inflation data for further cues which is set to be released tomorrow.

U.S stocks ended lower, continuing a stretch of volatility as concerns about Federal Reserve tightening, escalation in the Ukraine war, and China-trade policy continue to distress markets. The S&P 500 turned lower after opening with slight gains, shedding 0.75%. The Dow Jones Industrial Average edged down 0.3%, while the Nasdaq Composite fell 1%. The market is factoring federal-funds rate to touch above 4.7% in the near term. The market is looking for U.S. inflation data release on Thursday as another important indicator for monetary policy.

Central banks across the world are in the midst of inflation firefighting and many are rapidly raising their policy rates. RBI may have to keep up with the monetary policy tightening. Further rate hike of 35 bps is expected in Dec '22. The depreciation of the rupee is less than all other currencies led by strong macros of India. The Indian economy has held up well with strong macros amid weak global cues. Despite the monetary policy tightening by Central Banks across the globe, rise in inflation seems inevitable. The market will track 2QFY23 earning season while stock specific action based on results and management commentary are the key monitorable in the coming weeks.

Source : Equity Bulls

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