Mr. Mitul Shah - Head of Research at Reliance Securities.
Indian equities closed higher with Nifty gaining 0.9%. Broader markets under-performed the main indices as Nifty Mid Cap was down 0.1% while Nifty Small Cap was flat. Sectoral indices ended mixed. Nifty Reality (+1.2%) and Nifty FMCG (+1.2%) were the major gainers while Nifty PSU Bank and Nifty Media were the major laggards which were down 1.8% and 0.9% respectively. Meanwhile, data shows that India is likely to produce 34.3mn tonnes of sugar in 2022/23, down 4% from the previous forecast, after sugar cane yields in key producing states were hit by adverse weather.
U.S. equities and bond markets were shut on Monday to mark Martin Luther King Jr. Day. The market rallied last week on healthy earnings and expectation of small 25bps rate hike in the next FED meeting. This week will bring results of Goldman Sachs, Morgan Stanley, other corporate heavyweights such as Netflix and United Airlines. The market is also looking for the commentary from World Economic Forum, the annual gathering of global executives, world leaders and billionaires in Davos, Switzerland.
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 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%. Meanwhile, India's IIP grew 7.1% YoY in the month of Nov'22. IT services companies till now, managed to exceed Street expectations on revenue growth. However, companies warned about delays in decision-making by clients. Most companies scaled down hiring stoking revenue growth slowdown concerns.