Post Market views - March 23, 2022 - Reliance Securities

Mr Mitul Shah, Head Of Research at Reliance Securities

Domestic equites closed lower amid surging energy and commodity prices while central banks aim to curb inflation more vigorously. Moreover, investors continue to focus on the Russia-Ukraine war and rising coronavirus infections in China. Nifty declined 0.5%. Nifty Midcap was up 0.37%, while Nifty Smallcap fell 0.39%. Most sectoral indices ended in red except Nifty Metal (+1.1%) and Nifty Pharma (+0.3%). Nifty Auto was the major laggard, which declined by 1.1%, followed by Nifty Fin Service which fell 1%.

U.S. equities close higher with S&P 500 gain 1.1% and Dow Jones jumped 0.7%. The Nasdaq was up ~2%. The 10-year Treasury yield climbed to 2.37%. Moreover, the Fed will begin quantitative tightening worth $9trillion from its balance sheet. Volatility in global markets to persist as investors still keep a close eye on the Ukraine-Russia crisis, with Ukrainian officials claiming that the port city of Mariupol is under continuous bombardment with Russian forces redoubling their efforts to capture it.

Markets continue to witness 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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