Post Market views - April 11, 2022 - Reliance Securities

Mr Mitul Shah, Head Of Research at Reliance Securities.

Domestic equities ended lower, tracking weakness across Asian markets, whilst investors await the onset of the corporate earnings season. Nifty declined 0.6%. Nifty Midcap gained 0.6%, while Nifty SmallCap was largely flat. Sectoral indices ended mixed with Nifty Media and Nifty Reality increasing the most at 1.6% and 1.1% respectively. Nifty IT was the major laggard which dipped 1.4%, followed by Nifty Fin Service and Nifty PSU Bank which were down 0.5% and 0.3% respectively.

For the week US equities closed lower, with Down jones lost 0.3%, S&P 500 fell 1.3% while Nasdaq decline 3.9%. Fresh commentary from Fed officials remained in focus, as another set of speakers offered a mixed set of commentary on the policy path forward. Fed President is looking at 3% and 3.25% on the Fed funds rate in the second half of this year, implying more aggressive, front-loaded interest rate hikes in the near-term. The commentary at least temporarily helped equities to pause their latest bout of volatility from earlier this week, and kept Treasury yields steadier after a steep march higher. The benchmark 10-year yield jumped to 2.72% for its highest level since 2019.

Markets continue to face challenges, as the Russia-Ukraine war has stimulated a sharp rise in energy prices across the world and aggravated the supply chain and logistics issues. In addition, FED is preparing to take a more rigid monetary policy stance and shrink its balance sheet in an attempt to curb inflation. On the other hand, India's central bank has kept the repo-rates unchanged at 4% despite fears of rising inflationary pressures, whilst also downgrading the growth forecasts to 7.2% for FY23. Meanwhile, China's largest city, Shanghai, is facing food shortages amid raging COVID outbreak. Undoubtedly, the unprecedented economic damage due to the Russia-Ukraine crisis is likely to dictate the near-term market sentiment.

Source : Equity Bulls

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