Mr. Mitul Shah - Head of Research at Reliance Securities.
Indian equities ended lower despite positive trajectory in global markets. Nifty was down 0.4%. Broader markets ended in red as Nifty Mid Cap and Nifty Small Cap were lower by 0.1% each. All of the sectoral indices ended in red except Nifty Pvt Bank (+0.2%) while Nifty Realty ended flat. Nifty PSU Bank (-1.2%), Nifty FMCG (-0.9%) and Nifty Media (-0.8%) were the major laggards.
Wall Street stocks advanced powered by gains in tech, while Treasuries rose after fresh data pointed to a cooling US labour market that would support the case for a pause of interest rate rises by the Federal Reserve next week. The S&P 500 closed 0.6% higher. The Nasdaq Composite rose 1% while the Dow ended 0.5% higher The yield on the 10-year note ended lower at 3.72%. Data showed the number of new applications for unemployment aid rose to 261,000, the highest level since October 2021.
The RBI monetary policy committee held the repo rate unchanged at 6.5%. It also remained focused on withdrawal of accommodation. RBI revised down the inflation forecast for FY24 from 5.2% in April policy to 5.1%, amid recent dips in inflation readings. Inflation print is expected to remain above 4% target for this fiscal year while there are upside risks to food and commodity prices from potential supply cuts. Meanwhile, the monsoon arrived over Kerala yesterday with a week's delay. The markets will closely track its progress over the rest of the country. The US FOMC and the ECB meetings are scheduled next week.