Post Market views - April 21, 2023 - Reliance Securities

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

Indian equities ended flat ahead of key earnings with Reliance Industries due to report its 4QFY23 results today evening followed by ICICI Bank tomorrow. Nifty Mid Cap and Nifty Small Cap ended in red, down 0.4% and 0.3% respectively. Most of the sectoral indices ended in red. Nifty Realty and Nifty Metal were the biggest laggards tumbling 2.1% and 1.4% respectively followed by Nifty Auto, down 1.0%. Nifty Media was the primary gainer, up 1.3% followed by Nifty FMCG which ended 0.9% higher.

The U.S. stocks slipped after a number of disappointing first-quarter earnings reports. S&P 500 fell 0.6% while the tech-heavy Nasdaq Composite slid 0.8%. The Dow was down 0.3%. Meanwhile, Tesla dropped ~10% after the group reported that price cuts had driven its profit margin even lower than already reduced forecasts. Other major companies like AT&T also witnessed lower than expected earnings. Moreover, American Express and Blackstone were among the other big groups reporting disappointing results highlighting the challenges facing the US economy. The 10-year yield ended at 3.53%.

The 4QFY23 earnings season will pick up pace in the coming weeks. Meanwhile, mixed signals are emerging from the US, Europe and Chinese economic data. Inflation although declining, continues to run high in US and Europe. Initial signs of recession are emerging from the US jobs data and the TCS and Infosys management commentary. In India, inflation has eased while growth is steadily picking up pace led by accelerated govt capex and PLI investments. Services exports are strong offsetting the slowdown in the merchandise exports and boosting India's forex reserves. In the coming weeks, investors will parse the earnings outcome of the March quarter and closely follow the management commentary for further cues.

Source : Equity Bulls

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