Mr. Mitul Shah - Head of Research at Reliance Securities.
Indian equities started off the week on a negative note as the Nifty fell 0.3%. Broader markets out-performed the main indices as Nifty Mid Cap and Nifty Small Cap were down 0.2% and 0.1% respectively. Sectoral indices ended mixed. Nifty PSU Bank (+1.6%) and Nifty IT (+1.1%) were the major gainers while Nifty Media and Nifty Metal were the major laggards which were down 1.4% and 1.3% respectively.
U.S. equities closed higher on Friday, following first batch of earnings from big banks. On Friday, S&P 500 gained 0.4%, Nasdaq was up 0.7%, while Dow Jones added 0.3%. Although some banks beat expectations and also set aside more money to cover potential losses on loans. JPMorgan, the biggest bank in the U.S reported a rise in profit in the fourth quarter. At the same time, it warned it is expecting a mild recession and set aside $1.4bn for potential loan losses. The market continued to analyze consumer-price index data, which showed inflation pressures eased in December for a sixth consecutive month. The yield on the 10-year U.S. Treasury note rose to 3.452% from 3.446% on Thursday.
The earnings season will pick up pace in the coming weeks as major companies are set to announce their earnings. The market will follow the management commentary for further cues. India's retail inflation eased to 5.72% YoY in Dec '22 as against 5.88% in Nov '22 aided by an easing of food prices which account for nearly 40% of India's CPI basket. Food inflation for Dec'22 eased to 4.19%. IT services companies till now, managed to exceed Street expectations on revenue growth. However, companies warned about delays in decision-making by clients.