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Market Commentary
Post Market views - April 26, 2023 - Reliance Securities
Posted On : 2023-04-26 16:11:39( TIMEZONE : IST )
Mr. Mitul Shah - Head of Research at Reliance Securities.
Indian equities ended slightly higher despite weak cues in global markets while investors await a fresh batch of earnings reports. Nifty was up 0.3%. The Nifty Mid Cap and Nifty Small Cap were up 0.2% and 0.5% respectively. Most of the sectoral indices ended in green. Gains were led by Nifty Realty which was up 1.4% while the Nifty FMCG (+0.7%) and Nifty PSU Bank (+0.5%) were among the other gainers. Nifty Metal (-0.4%) was the primary laggard. Meanwhile, increasing risks from El Nino, heavyweight oil cartel's surprise output cut and banking risks in some advanced economies remain the key near-term overhangs.
The U.S. stocks retreated as a steep sell-off in First Republic shares reignited fears over the health of the banking sector. The benchmark S&P 500 lost 1.6%, its biggest daily decline in more than a month, while the technology-heavy Nasdaq slid 2.0%. The Dow also ended 1. 0% lower. However, Q1 earnings from tech giants Alphabet and Microsoft beat consensus estimates in after-market. The benchmark 10-year yield dipped 10bps to 3.39%.
The markets are in the thick of the earnings season both in India and globally. Sample of 70 companies to have reported their 4QFY23 results so far shows revenue growth of 9.7% YoY and PAT growth of 12.7% YoY. Investors will closely analyse the quarterly numbers and the management commentary on the demand scenario in the economy. Commodity prices including Brent crude prices will depend on the extent of the recessionary conditions in the US and recovery in China. The Fed Reserve is likely to hike interest rates by 25bps in its next meeting in early May. Bond yields in India have cooled down following the pause in rate hikes from the RBI which lowers the borrowing costs for the government as well as corporates. The decline in the dollar index and the stable macros have also led to the rupee strengthening to 1 month high.