Post Market views - April 5, 2023 - Reliance Securities

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

Indian equities ended higher despite weak global cues. Nifty was up 0.9% while broader markets out-performed the main index with Nifty Mid Cap ending flat and Nifty Small Cap gaining 0.7%. Majority of sectoral indices ended in green. Nifty FMCG gained the most at 1.4%, followed by Nifty IT and Nifty Fin Services which were up by 1.2% and 1.1% respectively. Nifty PSU Bank and Nifty Auto were the major laggards which lost 0.8% and 0.6% respectively.

U.S equities edged lower after fresh economic data suggested the labor market is slowing. Both the S&P 500 and Dow Jones dropped 0.6% each while the Nasdaq ended 0.5% lower. The health of the economy, and the resulting future path of interest rates, remains a key focus for investors. Job openings fell to 9.9mn in February, the lowest since 2021, down sharply from January's downwardly revised 10.6mn. Moreover, data showed that manufacturing activity declined for a fifth consecutive month. The yield on the benchmark 10-year Treasury note dropped to 3.35%, from 3.430% on Monday. Hiring data for March is expected on Friday, which will give investors more information on the labor market's health.

RBI's interest rate decision is due tomorrow. Consensus expectations are of a 25bps rate hike. Market will also take cues from the tone of the governor's speech and the RBI's revised forecasts for GDP growth and inflation for FY24. Investors also await the earnings outcome of the March quarter which will start trickling in from next week. While the Indian economy still has some macroeconomic bottlenecks, overall it has been resilient despite the turbulent global environment. However, rising COVID cases have raised concerns. Additionally, impending recession in the US, higher crude prices along with the prospect of a below normal monsoon could act as headwinds for the Indian markets.

Source : Equity Bulls

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