Mr. Mitul Shah - Head of Research at Reliance Securities.
Indian equities ended higher amid positive trend in global markets. Nifty ended 0.7% higher. Broader markets also ended higher as Nifty Mid Cap and Nifty Small Cap were up 0.3% and 0.7% respectively. Most sectoral indices ended in green. Nifty Realty was the major gainer which was up 3% followed by Nifty Metal and Nifty Bank which were up by 2.4% and 1.2% respectively. Nifty Media (-0.9%) and Nifty Pharma (-0.6%) were the major laggards.
U.S. equities rallied, reversing their morning declines, after 11 of the nation's biggest banks deposited $30 billion to prop up First Republic Bank. The S&P 500 added 1.8%, the Dow Jones gained 1.2%, and the Nasdaq advanced 2.5%. JPMorgan Chase, Citigroup, Bank of America, Wells Fargo and other banks were in talks to deposit billions of dollars of their own money into First Republic Bank as the First Republic stock has come under pressure in recent days amid concerns in the broader financial system. In the bond market, the yield on the benchmark 10-year Treasury note traded at 3.580% from 3.492% the day before. Meanwhile, the European Central Bank raised interest rates by 50bps to 3.5%. Many investors had been betting that the ECB might unveil a smaller, 25bps rate increase.
Globally, the crisis in the US banking system has roiled markets with the banking sector coming under pressure across markets on fears of contagion. The US CPI though lower, remains well above the Fed's 2% target. This coupled with the stronger than expected February jobs report implies continuation of the rate hiking cycle. The India Feb CPI at 6.44% was lower than 6.52% seen in January, but higher than consensus estimates of 6.30%-6.35%. The Feb WPI cooled down further to 3.85% from 4.73% in Jan and was also lower than the estimates. The WPI data suggests that some respite can be expected on the manufactured goods inflation in CPI in the coming months.