Post Market views - March 21, 2022 - Reliance Securities

Mr Mitul Shah, Head Of Research at Reliance Securities.

Domestic equites declined after a strong rally over past few sessions. Investor sentiments took a hit as reports suggested that Europe might put a ban on Russian oil imports. Moreover, Russian interest repayments are due this week, which may affect the markets in the near-term. Nifty declined 1%. Nifty Midcap was down by 0.3%, while Nifty Smallcap gained 0.2%. Most sectoral indices ended in red except Nifty Media (+0.4%) and Nifty Metal (+1.4%). Nifty FMCG declined the most at 1.8% followed by Nifty PSU Bank (-1.4%) and Nifty Auto (-1.3%).

U.S. equities rallied on Friday to post a fourth consecutive day of gains. The index also posted its first weekly gain in three - four weeks as the markets favourably took the Federal Reserve's measured first move on raising interest rates. Dow jones gain 5.5%, S&P 500 added 6.2% while Nasdaq jumped 8.2% for the week. WTI crude prices rose to hold above $107 per barrel, while the 10-year Treasury yield held above 2.15%. The Fed opted for a 25 basis point rate hike and charted out a route towards six additional rate hikes later this year, which helped provide clarity on the future monetary policy path and removed an overhang of uncertainty.

The market around the world continued watching developments on the Russia-Ukraine war, which is disrupting shipping and air freight. Markets also monitored a recent wave of COVID-19 infections in China. Both the RBI bulletin and the finance ministry's monthly economic review talked about potential trouble spots in the economy, going forward. Market may remain volatile due to the Russia-Ukraine crisis. Trend in global equities, the movement of rupee against the dollar and crude oil prices will dictate trend in the near term. The Indian economy is in good shape given the underlying stellar corporate earnings momentum, improving asset quality of the banks and levers are in place for capex cycle revival. DII participation can revive the markets gradually once prevailing clouds of uncertainty disappear. However, over near term, war issue would have high negative bearings on global equity markets including Indian equities.

Source : Equity Bulls

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