Post Market views - March 22, 2022 - Reliance Securities

Mr Mitul Shah, Head Of Research at Reliance Securities.

Domestic equities closed higher despite no significant de-escalation of the Russia-Ukraine crisis, surging crude prices and Fed's hawkish tone. Moreover, investors also expressed concerns over rising COVID cases in China and economic costs due to the country re-imposing restrictions in certain regions. Nifty gained 1.2%. Nifty Midcap and Nifty Smallcap were up, 0.3%. Sectoral indices ended mixed with Nifty IT and Nifty Pvt Bank increasing the most at 2.1% and 1.3% respectively. Nifty Reality was the major laggard, which declined by 1.1%, followed by Nifty FMCG which fell 0.7%.

On the global front, Fed chair Powell's remarks on the possibility of more aggressive rate hikes impacted the market sentiment. Moreover, oil prices and Treasury yields pushed higher as investors refocused on risks from Russia-Ukraine crisis. The Dow Jones fell 0.58%. The S&P 500 lost 0.04% while the Nasdaq dropped 0.4%. The yield on benchmark 10-year Treasury notes rose to 2.31%. The war in Ukraine has further intensified as the country challenged a Russian ultimatum that its forces lay down arms in Mariupol, while the European Union aligning with the U.S, considered a possible energy ban against Russia.

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

Keywords

RelianceSecurities PostMarketViews NiftyMidcap NiftySmallcap