Post Market views - April 6, 2022 - Reliance Securities

Mr Mitul Shah, Head Of Research at Reliance Securities.

Domestic equities moved in tandem with U.S markets to close lower, fuelled by investors' expectation of a stricter interest rate hike by FED. Nifty lost 0.8%, while broader markets outperformed the main indices with Nifty MidCap and Nifty SmallCap gaining 0.6% and 0.1% respectively. Most sectoral indices ended in red except Nifty Metal (+1.4%) and Nifty PSU Bank (+1.9%). Nifty IT, Nifty Fin Service and Nifty Pvt Bank were the major laggards which dipped 1.63%, 1.59% and 1.28% respectively.

U.S equities dropped as Federal Reserve Governor, Lael Brainard, commented on FED's possibility of aggressive monetary policy tightening and a faster reduction of its balance sheet. The Dow Jones Industrial Average fell 0.8%, the S&P 500 lost 1.26%, while the Nasdaq Composite dropped 2.26%. The yield on 10-year Treasury notes was up 13.1 bps to 2.54%. U.S. crude oil prices declined 1.3% to $101.96 a barrel. Moreover, investors continue to closely observe the developments of the Russia-Ukraine crisis as the western countries prepare to expand sanctions to include a ban on all new investments in Russia.

Markets continue to remain jittery as investors try to gauge the effects of Russia-Ukraine war, whilst simultaneously mulling over the possibility of FED raising interest rates even further to curb inflation. Additionally, rising oil and commodity prices are threatening supply-chain and logistics by disrupting shipping and air freight. The Chinese economy continues its battle with rising coronavirus infections. While the world awaits the resolution of the Russia-Ukraine crisis, over near-term, devastation due to the war and additional sanctions on the Russian economy, would have menacing effects on global and Indian equities.

Source : Equity Bulls

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