Post Market views - Jan 20, 2023 - Reliance Securities

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

Indian equities closed lower following weakness across global markets. Nifty shed 0.4% while broader markets under-performed the main indices as Nifty Mid Cap and Nifty Small Cap were down 0.8% and 0.6% respectively. Most sectoral indices ended in red. Nifty Bank (+0.4%) and Nifty PVT Bank (+0.4%) were the major gainers while Nifty Media and Nifty Consumer Durables were the major laggards which were down 1.4% and 1% respectively.

US equities closed lower on poor economic data and corporate-earnings reports. The S&P 500 and Dow Jones fell 0.8% each while Nasdaq shed 0.96%. The yield on the 10-year Treasury rose to 3.396%, up from 3.374% on Wednesday. Markets began 2023 with healthy gains led by optimism that the Fed may soon begin slowing the pace of its interest-rate rises and by the end of China's severe pandemic restrictions. But in recent days that upbeat mood has started to fade, with concerned that the lagged effects of the Fed's rate rises are beginning to take their toll.

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% in Dec'22 led by an easing of food prices which account for nearly 40% of India's CPI basket. India's IIP grew 7.1% YoY in the month of Nov'22. IT service companies 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.

Source : Equity Bulls

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