Mr. Mitul Shah - Head of Research at Reliance Securities
Domestic equities closed higher following positive global cues. The Nifty rose 1%, while Nifty Mid Cap and Nifty Small Cap increased 1.6% and 0.8% respectively. All sectoral indices ended in green. Nifty PSU Bank was the biggest gainer which climbed 4%, followed by Nifty Media and Nifty Reality which were up 2.1% and 1.7% respectively. Meanwhile, the Cabinet has approved minimum support price hike for all mandated Rabi crops for marketing season 2023-24. The MSP for lentil (Masur) has seen the highest increase of Rs500/quintal. Rapeseed and Mustard has been increased by Rs400/quintal.
U.S. equities closed higher as markets gear up for another batch of strong earnings. The S&P 500 rose 2.7%, the Dow Jones added 1.9%, while Nasdaq climbed 3.4%. The yield on the 10-year Treasury note edged up to 4.012%, from 4.005% on Friday. Yields have risen for 11 consecutive weeks, driven by the Fed's campaign of interest-rate increases
Earning season started with majority of IT companies declaring the healthy numbers and a positive outlook is emerged in the corporate earnings season. Meanwhile, Russia war on Ukraine has raised the geopolitical tensions even further. Ongoing festive season has led to improved auto sales with strong PV and CV sales. However, Investment and corporate capex are yet to pick up in a big way. Inflation continues to remain sticky, both, in the domestic and the US economy despite the earnings season which started on positive note. India's growth remains strong and expected to be one of the fastest growing economies in the world, while global recession and downgrading of growth persisted for major economies. India's growth trajectory is supported by the improvement in capacity utilisation, revival in credit growth, strong corporate balance sheets, upbeat consumer and business confidence. We expect the market to remain range-bound in the coming weeks, while stock specific action based on results and management commentary to follow.